Been receiving a couple of emails lately (mostly from OFWs but there’s one from a Chinese/Taiwanese company) asking if there’s still some good business to be made with internet cafes in the Philippines. From accounts of friends and people who’ve been into the net cafe business as well as what we’re seeing in every mall and street alley, there’s some mixed reaction.
Five years ago, the prospects were better; way better. I myself was thinking of opening up one back then. My excitement was immediately doused after doing the math.
Just like any other brick and mortar businesses, there are so many extraneous factors that’ll affect your likelihood of success in the internet cafe industry:
- Location. Pick a good spot and you’ll hit a gold mine. Pick the wrong one and kiss your money goodbye.
- Competition. Most business-minded people think of competition as a race to charge the lowest prices in order to win customers. While it’s good for the customers, exceeding the lower boundaries can drive you and your competitors to bankruptcy. One cannot expect to recover a Php500,000 investment if hourly rentals go down to as low as Php10. It goes without saying that in this industry, there are no customer loyalty; just cheaper rentals.
- Quality/Consistency of Broadband Connectivity. For places that don’t have many options for bandwidth providers, this could spell trouble if your only source of connectivity conks out more frequently than you get brown-outs in your area. A backup DSL might be a good solution but many consider the extra cost to be not worth it.
- Software Licensing. Many people who go into the net cafe business don’t factor in the cost of software licensing in their capital. Either they think they can get away with a few pirated copies or go open-source full-time. Still, there’s the class of ever-popular network games like Starcraft, WoW and CS which cost an arm and a leg to get a per-PC license. Maybe that’s why MMPORG pay-to-play model is more popular in this side of the globe.
- Expected ROI. While previous half-decade old records saw a return-of-investment in just over a year, lower rentals due to fierce competition and over-saturation of net cafes have driven the ROI further back to as long as 3 years (that’s if you’re lucky enough). To sustain a business that long and derive your income from that sole business could easily drain you of energy and personal savings.
There’s also the question of how many PC units should a net cafe operate in order to realize profit. A friend, who runs a net cafe for about 3 years now, says you need at least 15 units to survive and get decent income. Does that mean others operating below that number are doomed to fail in the long run?
However, the growth and expansion of Netopia’s franchise around the country says there’s still good money to be made from the internet cafe business. Does that mean people wanting to venture into that industry should look into franchising? What do you think — given the opportunity and capital, do you feel a net cafe business in the Philippines is still a lucrative one?
Lots of great info here. Thanks for sharing
mga tsuy, may alam po ba kayo abot anti piracy team na nagre-raid sa mga cafe at sa anti-piracy law? ano po ba ginagawa nila sa cafe na pirata ang OS at mga games? kinukuha po ba nila ang mga cpu at may multa ba sa cafe? matanong ko lang kasi pirata OS ko sa cafe eh..takot ako sa magiging mangyari.
Hi Michael,
Back when I was still operating an internet cafe (2005) this news of BSA and Anti-piracy of the Philippines came out and made a lot of noise in the internet cafe industry. Though, there are news that NBI and local authorities don’t raid internet cafes, there were still rumors that some unscrupulous group are doing so. You can check http://www.bsa.org for more info.
But one of my goal right now is to upgrade the internet cafe industry in terms of uniting the icafes in order to better negotiate lower prices or better terms of such licenses (group deal. We all know how costly the licenses are, and if you haven’t really planned out this expense in your over-all business plan… chances are you will not be able to impose higher or profitable rental fee to your customers because of factors like competitions and the suicidal mentality (price war) of icafes prevalent here in our country. But if you have considered this, I assume that your rental fee is not 15 pesos in a very competitive location… you’ll be more like Netopia. You can visit my http://www.icafeproject.com for mor info (shameless advertising
Thanks Abe)
- Chazper
PayMyCafe Internet Management Software for FREE. Packed with valuable features. Plus, you get paid by using the software through ad revenue sharing. For more info, visit and download at http://www.paymycafe.com . Available only for Philippine Internet Cafes.
Hi to all internet cafe owners, 10-08-2011
im planning to have my own internet cafe “40 units PC and 15 units PS3″ i already have my own place Location Cavite City i just need some advice from Experienced Owners..
correct me if im wrong
my idea is like this i have 55 units all together with ps3 and PC on AC Internet Cafe
Lets say 40 units are used for 1 DAY =
15 Pesos per/UNIT x 40 UNIT = “600 Pesos”
“600 Pesos” x 8 HOURS only = “4,800″
BUT im Planning to Operate my Internet Cafe 24/7
so 4,800 x 23 days = “110,400″
BUT im Planning to Operate my Internet Cafe 30 days a month…
“110,400″ is that Right or wrong?… REPLY asap PLS thank You…
Hi, in my own experience that computation is not going to happened, only 50% average is my income based in overall operation.
Honestly, your computation is way off. You have 40 units, how many of those units will be use in an expand of 24 hours?
Do you think there is a market between 9PM and 8AM in your area? Will someone be really using your internet cafe between 9PM to 8AM? Not to mention all 40 of them.
[...] Several months ago, we finally closed our little internet cafe business. I wrote about the viability of the net cafe business many years ago and actually started one about 2 years ago. Despite its eventual failure, I learned [...]
I am already planning to start a computer/internet shop in my own house as a starter. My only problem is the connection, we are in the province. However, I see many laptop owners in our town who have connections. Would it be difference for those in the cafe? The reason I want to start in our house is because I do not have enough to rent on the urban. But since I am just starting, do you think this is possible? Thanks!!
@jun0865.
Sir thanks for your help sa ating mga kababayan wu r planning to put up that business .. 1st time ko magbasa ng comment sa site nato and i found out na ung mga comments mo ang very informative.. im planning also to put up one but still studying all the options tsaka do’s and dont’s.. keep up the good work. i may also seek your help in the near future.. mabuheyyy…
year 2004, at that time i put my internet cafe and did not take time to close.
Now 2011, I am still convince that it is not a good business if you will only do the same strategy & thinking..isn’t it that we have the highest electricity rate in Asia & computer prices, including internet connection is getting cheaper n cheaper.
But there is still hope…ummm..that I can not share here,if you like email me at pilengr_tw@yahoo.com, I can tell you the secret. You will be surprised you did not taught of that..always think out of the box..bye bye..
would be better to just franchise an internet cafe?
in our time now internet cafe business is not advisable for the reason that many internet cafes existing to our area and anytime you can log in using phone or home/residential. the internet ay sobrang abot kaya na ngayon. i am a owner also of a internet cafe. base to my experience 1months to 6 months or up to 1 year your cafe have many customers coz its new and the material is very new. but afterward ang mga tao ay mg magnenet sa mga cafe na bago. at isa pa kung makikita ka ng kapitbahay mo na malakas ang cafe mo they also put up a cafe na mas marami pang pc kaysa saiyo. and the price is very low. dito sa davao ng P10/hr kami pero ang new open cafe is P5/hr or P10=3hrs. kung dadalawin mo ang davao mostly ang rate ng internet dito is P5/hour.
that is called suicidal rate,i tell you it will not last 6 months and say goodbye,if they will not pay for obligations like dsl connection,electricity and mostly taxes,maybe they can survive,i started ng icafe way back 2002 here in bicol,25/hr then now stick to 15/hr.yun mga katabi namin ay mga 6 months sarado,lugi sa bayaran at utang sa renta at wala maibayad katulad sa amusement tax,ganon talaga ang mga pinoy gaya gaya lang,thats life lyfe
ganian din po ang situation dito sa amin d2 sa la union..since 2005 na ang negosyo na ito na namana ko sa kapatid ko and in those years marami ang nagtangkang magpatayo din malapit sa aking negosyo.ang pagkakaiba lang namin sila nagrerenta at ako ay hindi..tama yung sabi ng isa kanina na kung saan bago dun sila pupwesto.ang advice ko lang, alagaan nio ang mga loyal customers nio.hangang 2 mos lng mahigit yung mga nagpapatayo d2 malapit skin at nagsasara na din sila.ngayon may bago ulit comp shop at mas marami pa atang units kesa sa akin na 12 units lng.ang masama pa dito sa sitwasyon ko ngayon ay kamag anak ko pa ung huling nagpapatayo ng comp shop..putek ang yayaman na nga aagawan pa kami ng ikinabubuhay..ang edge ko lang, marunong akong mag ayos ng computer samantalang sila ay nagpapaayos lng.patience lang..sa una mawawala mga customers mo, wait mo lng tumatagal ng konti..
hello po, mag tatayo din po kasi ko ng com shop malapit sa school and madami ding mga tao may mga ibng com shop din dito pero ang na pansin ko lahat sila walang aircon and maliit lng yung space nila yung sakin 40 sqm and ang unit ko is 12pc . di ko pa alam kung kikita ba ito kasi 1st business ko po ito , pede nyo po ba ko pakitaan ng worse senaryo about sa kita about sa kita ? lahat ng pc ko ay bago and mabilis salamat po
hi guys , magbibigay lang po ako ng opinion.. 3 years na po ako nag ooperate ng shop and ROI ko is 1yr and 6mos (1 1/2 yr).. 12 units ko plus 1 server..
mganda mag negosyo ng internet cafe or gaming shop lalo na kapag ito tlga ang hilig mo.. dpat marunong ka mag maintain ng computer pati na rin ang environment. iisipin mo din ang LOCATION kung san mo itatayo ang shop mo .. iwasan mo magtayo sa very saturated places, kasi mahirap mkipag compete lalo na kapag mas maganda yung specs ng pc ng ibang shop kesa sayo.
pana-panahon lang tlga ang business,, minsan malakas minsan mahina. kaya kapag dumating ung time na mahina ang negosyo mo dapat hndi ka mawalan ng pag-asa agad agad… darating yung time na lalakas yung negosyo mo . mag isip ka lang ng paraan kung pano ka ulit mkakahikayat ng customers. maglagay ka ng promo rate or any sideline business bukod sa rent ng pc..
kung gaming shop ang gagawin mo mag invest ka sa specs ng pc mo at accessories, yan kasi ung babalik balikan ng players e.. kapag maganda pc pati monitor tiyak yan babalikan yan ng tao.. consider mo din ung internet connection.. i prefer DSL para stable.. wag ka kukuha ng broadband (signal-based) kasi madali yan mag fluctuate at hndi yan pang gaming..
kung may pwesto ka na sarili mas mganda yun kasi wala ka na iisipin na RENT.. bawas na yun sa operational expenses mo.. so kahit mahina ung shop mo wala kang iisipin na monthly rent kundi kuryente na lang at internet..
about sa piracy naman, hmmm depende cguro yan sa location.. kapag nasa commercial area ka, example nasa mall or nasa city tlga may risk tlga na ma-raid ka pero sa panahon ngaun bihira naman yun.. kung nasa private place ka naman like subdivision ok naman mag-install ng pirated OS at games for starters,, then kapag naka bawi bawi ka na ng investment mo palitan mo na lang ng original OS at games ung naka install sa pc mo..
dapat lagi kang updated sa games or applications para alam mo kung ano ang mga iinstall mo na games at apps na patok sa panahon..
sikap at tyaga .. wag mawalan ng pag-asa .. yun lang po …
Hi…I would like to know how you make money online? Do you write articles and stuffs?do you blog? Thanks
I just opened an internet cafe here in Makati. I did not put an aircon. It is doing good so far. Though rates in the area are ranging from 12-15, I stick to the 15 pesos per hour rate. The only edge that I have why I am getting customers are my computers because they are really good for gaming and I got a 5mbps internet. My shop is even a spot now for gaming. Players from other places like Taguig and Pasay are coming to the shop to play with the regular players in my shop.
Since I have a laundry shop located few blocks from my computer shop, I also receive laundries here. And I also have a pizza store in front of my shop.
In other words, you must have other “add-ons” business if you will put up a computer shop so that you can also earn froim the other add on businesses.
just want to know how u make money online. been searching for quite sometime now but i am unfortunate to locate one. tenks
Goodbye Internet Cafe… 20/hr, 15/hr & 10/hr my business is piso net piso/3-5 min, anywhere basta matao patok sa masa lalo na sa metro manila ngayon ng lagay na rin me sa imus cavite and the income is best the costumer is consistent and the key of that is sa piso makakapag FB ka na makakagames ka na makakapag search kana and infact ang bata pag may piso ihuhulog nya na lang sa piso net to games, d gaya sa internet kailangan may 10 pesos ka pa or 15 or 20 pesos para makapag internet…
Based on experience.
Computer shop depends on Location, Connection and the skills you have doin’ this kind of business. You must be happy on what you are doin with and everything follows. If this business was not your specialty then maybe after 6 months alam mo na!
Nasa diskarte lang yan, wag na wag kang mag tatayo ng comp shop sa alam mo namang walang makukuhang customer. Make sure na maganda ang connection mo, wag mong tipidin. Kasi yan ang babalikan ng customers. Maganda din na marunong ka sa mga side line or add on for example dapat marunong ka sa mga typing jobs, printing inlcuding discounts on your regular customers. Once na maganda ang serbisyo mo hindi ka iiwan ng mga customers. Lakasan lang ng loob ang pag tatayo ng computer shop, nasa sayo yan kung paano mo didiskartehan.
im selling my computer shop in makati near PRC for 150K only. it has 13 units with assorted spec, with lcd or led monitor, 2HP AC panasonic, complete setup and operational for 5 years. rented premises has 2 floors with 2 bedrooms and a living room on the 2nd floor. if interested call me at 09156458651 for appoinment. rush sale po ito habang hindi pa naka-enroll ang mga kids.
how bout yung Coin operated internet machines or PISOnet, balak sana namin ng kuya kong mag umpisa ng ganitong negosyo, since hindi na kailangan ng shop for this units, just like videoke, huhulugan lang piso and then star kana for chatting. balita ko malakas daw ang kitaan nito sa market specially pag marami kang PC, convenient and much apordable ito compare sa typical internet cafe shop, any suggestion po thanks much.
Twitter: merlvennb
says:
ask ko lang if anong on_line games ang patok ngayon sa mga gamers aside from DOTA, cross fire and Shaiya…
The text is promising, will place the site to my favorites..!