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?
Tanong lng po kung ok lng bang mag tau ng internet cafe khit smart bro ang gamit? Ano ba advantage and disadvantage nito?
sa mga gustong magtayo ng icafe with less than 10 PC, ang suggest ko sa inyo wag nyo nang ituloy kasi malulugi lang kayo. hindi kayang i-cover ng income nyo ang inyong mga expeses.
Rick, hindi rin ako naniniwala na effective kaya lang sabi ng partner ko na nagtry effective daw kaya sige try namin sa shop. anyway, yung mura lang naman ang bibilhin namin.
@marc
can you breakdown the expenses for 7 units cafe + 1 server using CRT monitors.
At pwede na ba ang 999 ns smart bro para sa 7 units gaming, youtubing, FB?
@jesse
magkano ba budget mo for the start up?
kasya na kaya ang 60,ooo to start with 6 pc’s?
60,000??? nope. nagbabago ang trend every year. i suggest na mag budget ka ng 13k per pc. pwd na syang pang gaming, hindi laggy kahit gamitin mo sa high specs na games like “left for dead 2″. mag search ka around metro makakakita ka ng ganung price. saka dapat, ikaw din mismo marunong mag troubleshoot, mapa hardware or software para dika na mag ha hire ng tech.
@Mottaka
Here’s my estimate for initial investment. yung repair and rent depende sa pwestong makuha mo.
PC 19,000×8 = 152,000
Aircon (2hp pwede rin 1.5) 23,000
Router 2,500
Hub 3,000
Telephone 1,500
Internet (no to plan 999) 4,500
Tables & Chairs 1,200 x8=9,600
Repairs 10,000
Business Permit 7,000
Advance Rent & Deposit 10,000×3= 30,000
Total 243,000
Ito yung projected income & expenses.
No. of PC 7
Daily Usage (hrs) 7
Daily Sales (hrs) 49
Rate per Hour 20
Daily Gross Income 980
Monthly Gross Income 29,400
Less: Expenses
Electricity 5,940
Water 500
Rental 10,000
Telephone 1,500
Internet 4,500
Salaries 12,000
Supplies 1,500
Amortization – Bus Permit 583.33
Depreciation – Hardware 6,488.89
Total Expenses 43,012.22
Net Income (Loss) (13,612.22)
Add: Depreciation 6,488.89
Amortization 583.33
Net Cash Inflow(Outflow) (6,540.00)
Sana makatulong ito sa you.
@jun & marc
Salamat sa info na binigay niyo nakatulong ito sa pag papalano ko na magtayo ng Icafe.
Hope makatulong di to sa iba na plan pumasok sa ganitong biz.
sobrang napaka mahal na ng price ng isang pc mo pati na ang mga peripherals. 19k??? makakakuha ka ng pc na aabot lamang ng 13k kasama na lcd monitor, at kayang magpatakbo ng highspecs na mga game ng dika gagastos ng ganun kalaki, kahit sa mga router at switches. isama mo narin ang mga utp cables, crimping tool, rj45 connector, mouse, KB, at headset o speaker. sugesstion ko: bumili ka by piece. yung bubuuin mo nalang. kung may kakilala kang makakatulong sayo, mas mabuti. punta ka ng gilmore, sa may sanjuan, dyan sa aurora. tpos pasok ka sa gilmore IT center, yung store na FOXCOM, mura ang mga prices ng pc nila dun. pati narin sa PC Gilmore. MAghanap kalang ng mga type-G na router, mura lang yun. dimo kelangan ng type-N kagad, dahil mostly, pag tpye-N ang gadget na kokonek sa router, may backward compatibility ito. Nasa 1.6k lang, pati narin yung switch. yun table mo, ipa pakyaw mo sa karpintero, para madaliin nila yung gawa. yung sakin napagwa ko ng 3k lang bayad. Pero pang 12 units. Kung may alam ka ng konti sa physics, dmo na kelangan mag aircon para di masira mga PC mo sa overheating. maku2ha mo yun sa design ng mesang ipapagawa mo. pati narin sa design ng lugar na pagtatayuan mo ng shop mo. ceiling ska exhaust fan lang, ok na. Kung alam mo rin gumawa ng common ground para mapatakbo mo ng 110 lang lahat ng monitors mo, pati printer, mas maganda. less ang expenses mo sa kuryente. mas maliit ang wattage, mas maganda. sa loob naman ng shop mo, gumamit kalang ng mga ELI na ilaw, yung mga tipong 12 or 9watts. maliwanag na, matipid pa. may ibat ibang kulay narin yun. yung sakin nga, 4watts lang eh. paghandaaan mo lang yung Bus permit, kasi dun ka mapapagod kakalakad ng mga kekelanganin.
^
kung surfing lang ang service at office suites, feasable ang Intel Atom based + ITX mobo + 65watt ITX powersupply/brick.
Advantage nito:
-longer upgrade (since web surfing & office suites ang usage, di madali ma outdate yung parts mo)
-lower power consumption (65watts +- vs 350+- watts ng average pc)
Only disadvantage lang IMO di ito compatible for gaming.
Sample
Net PC
3,200 Intel Desktop Board D945GCLF with Integrated Intel Atom Processor
1,100 1Gig DDR2 533
=======================
P4,300 excluding monitor, keyboard & casing
Kung tungkol sa casing magpa sadya ka nalng built-in sa cabinet yung mounts para tipid sa casing & iwas nakaw(kung mabigat yung cabinet at secured yung lock)
ska para dik bumili ng licensed OS, mag ubuntu kana lang. hehehe
@jun0865
ano ba ang mga compatible na OL games sa ubuntu? di ba hindi pwed some games ng windows sa ubuntu?
parang maganda yung mag patakbo lang ng 110 lahat ah, panu kaya yun?hmmm…
salamat grabe dami useful na info binigay mo, kung pwed lang kita bayaran, babayaran kita sa mga advice mo lol
@ICdeadpipol
parang napakababa naman ng price mo ng intel atom? san bang store meron ganyang price ang intel atom? kasi nagtingin ako around 8k yung atom eh..
110 and 220 volts power supply have the same power consumption(power=volts x ampere), kahit ibaba mo ung volts ganun prin consumption coz ung ampere nyan ay tataas(so power still the same), and the disadvantage of using 110V is you need to use bigger wires so additional cost un(ung size ng wire is nakadepend kc sa ampere, the higher the ampere the bigger the wires), in summary hindi ka makakatipid sa 110V mas gagastos kpa coz you need to use bigger wire….just for clarification…
“power”=volts x ampere??? ang alam ko ganito ang formula eh: watts= voltage x ampere. kya hindi ko alam kung saan mo nakuha yung formula mo at anong ibig mong sabihin sa “power”. try mo to. 110~240v-1.8A. i check mo ang pagkakaiba ng wattage.
sa ubuntu, i download mo yung program na wine. deb file yun. subukan mo kung gagana alinmang OL game na pang windows. ang wine sa linux, eh parang DLL file ng windows na nakakapag run ng windows program. Tandaan: wag mong i du dualboot ang linux sa windows. mostly, may conflict pagdating sa GRUB. pag inerase mo ang linux OS mo, masisira ang booting sector ng windows dahil nagboboot yun sa GRUB. pag linux, linux lang. pag windows, yun lang. open office, messenger, browser, meron lahat ang ubuntu so no need to worry pag pang browsing lang. sa games, diko pa alam pero may mga games sa windows na compatible sa linux. try mo muna i install ang wine, tpos mag install ka ng alinmang windows game na gusto mo i try sa linux kung gagana. ita try ko naman kung pwd ang OL nextweek since super busy ako ngayon.
same lang un, magkaiba lang term na ginamit natin pero same prin un. power is also watts. watts kasi is a unit of energy but the exact term nyan sa engineering is power tlaga(energy ika nga). to prove my point, gumamit ka ng ammeter(device use to measure ampere). at 110V kunan mo ng ampere ung lets say PC mo at imultiply msa sa 110V para makuha ung power. and then at 220V kunan mrin ng ampere ung PC at imultiply msa sa 220V and you will get tha same power or watts(ung power na makukuha msa 110V and 220V is the same), try it its a very good experiment….
“try mo to. 110~240v-1.8A. i check mo ang pagkakaiba ng wattage.”
u can not directly multiply 1.8A to both 110V and 220V, dahil magkaiba ampere ng bawat isa. usually ung ampere ng 110V is mas higher compared to 220V kaya ung wattage nila ay iba din,
so another way to confirm na iba ung wattage ng 110v sa 220v is to put it in actual test kung ung metro mo is digital, mron dun na nkaindicate sa ibaba ng digital panel na KW(kilowatt)un ung actual consumption ng device in kilowatt nga lang(equivalent to 1000watts). at 220V tnganan mo ung value ng KW, then at 110V tnganan m ung value ng KW which is the same lang ung dalawa, of course to enable to use 110V u need to use transformer(220v>110V step-down), never ever use grounding coz its risky(ur life and ur device)
This advise not to use grounded circuits is totally incorrect. It is dangerous and bad advice. Always use ground electrical installations. It protects you from the risk of shock and protects your hardware. I am sorry to say the writer is misinformed. I suggest he get a copy of the Filipino electrical code and study it thoroughly.
The secondary reason for always using grounded or polarized plugs and receptacles is that it keeps you from crossing the neutral/common leg with the power/hot leg which crossing is what produces the shocks and shortens the life of the equipment. There are polarized plugs and receptacles when one wants to use 2 pin electrical circuits for lights and other permitted uses; otherwise use 3 pin grounded.
To install a grounded electrical service you can buy a special grounding rod at your builders supply and pound it in the ground close to your distribution panel (service entrance panel) Wire this grounding rod to a ground buss in your electrical panel Then run a third ground(green) wire to all your receptacles boxes and install 3 pin receptacles.. Black is hot (Power, Load) White is common or neutral and green is ground or earth.
Religiously using standard color coded wiring avoids mistakes and frees you from having to use a meter at each receptacle to verify the polarity.
This is a short and overly simple explanation but it should give you some insight.
Glad to see a few voices of reason here. I generally try to keep out of the way of discussion as much as possible, because I all to often sound like the “know it all” foreigner … and I live here in the Philippines and learn every day that I really don’t “know it all”.
But really, guys and gals, to give people advice on life-critical items like currenyte, when you obviously don’t know the subject goes beyond ‘free speech’. As has already been pointed out here, please read and understand the rules of your own country, let alone international standards.
One of the reasons my wife and I are planning to build our own home is the abysmal state of wiring here,even from allegedly “good” builders. Ohm’s law and other facts of electrical behavior do not follow national boarders, and you can’t invent the “Filipino way” of doing things and still expect your electrical equipment to live.
In my four years here I am amazed at how short the life of many electrical devices is, mainly because of “pwede na” style wiring, lack of grounding, undersized wiring, ATBP.
The Philippines is actually paying a heavy, but hidden, tax in that poor wiring is not only unsafe, but causes early failure of many appliances, such as computers.
Again, sorry to butt in with my big foreigner mouth, but advice such as not using grounded circuits is too scary not to speak out about … if you are going to make a big investment, such as in an Internet cafe, for your own sake, learn the rules of your own country and do it right … you will be paid back many times over.
“Kung alam mo rin gumawa ng common ground para mapatakbo mo ng 110 lang lahat ng monitors mo, pati printer, mas maganda. less ang expenses mo sa kuryente. mas maliit ang wattage, mas maganda”
hey, we have some misunderstanding here…what i am refering about grounding is the above statement of jun0865 on how to get 110V out of 220V(one line from 220V and the other line from ground)which is very dangerous.
of course electrical circuit needs to grounded for safety, but not using grounding on 220V to get 110V
hopes this clears,
Using 220v and ground does not give you 110v. Please stop writing about this subject you are going to get someone electrocuted and/or their electrical equipment destroyed.
Thank you.
I think Dave will have a heart attack when he reads your latest comment.
“Kung alam mo rin gumawa ng common ground para mapatakbo mo ng 110 lang lahat ng monitors mo, pati printer, mas maganda. less ang expenses mo sa kuryente. mas maliit ang wattage, mas maganda”
hey, we have some misunderstanding here…what i am refering about grounding is the above statement of jun0865 on how to get 110V out of 220V(one line from 220V and the other line from ground)which is very dangerous.
of course electrical circuit needs to grounded for safety, but not using grounding on 220V to get 110V
of course you can get 110V out of 220V using ground but as i’ve said its very dangerous coz its not stable(the volts varies)and as youve said may get you electrocuted thats why i write to warn them.
im doing this several times on the job but only in emergency cases when there is no 110V source and only in a short period of time due to the risk involve. i think you wont believe if we can get 220V out of 440V using ground, we did this also several times during our emergency repair when there is no nearby 220V for our welding machine, but one of my guys stays on the circuit breaker if something happens
and lastly,what do you think the writer meant with the below statemement, coz you can only get 110V using transformer and nothing else as philippines is a 220V country. pls take note of his term “common ground”
“Kung alam mo rin gumawa ng “”common ground”" para mapatakbo mo ng 110 lang lahat ng monitors mo, pati printer, mas maganda. less ang expenses mo sa kuryente. mas maliit ang wattage, mas maganda”
Current Issues ng mga Internet Cafe sa amin or sa inyong lugar: NOON at NGAYON
PRICING:
* Noong 20/hr kami tapos pagdating ng summer ay nag PROMO silang lahat at ginawang 15/hr. Pagbalik ng pasukan ay hindi na nila maibalik sa 20/hr. Ang dahilan ay baka wala ng pumuntang customer sa kanila.
* Ngayon: Meron na akong nakikitang 12/hr, 10/hr sa mga ibang IC para makaakit ng ibang customer thinking na pupuntahan at pipilahan sila. Wala ng loyal-loyalty ngayon. Kung saan ang mura at mabilis ang net ay doon pupunta ang customers.
PRINTING:
* Noon: Php5.00 to 4.00 ang printing namin dahil wala pang continuous ink sa mga printer. Bumibili lang kami ng generic ink at kami na ang nagre-refill. Kahit papaano ay kumikita kaming lahat.
*Ngayon: Piso na ang printing mapa long or short coupon bond at sa color printing naman ay Php6.00 na dahil sa continuous ink na binebenta ng mga refilling ink shop. Meron pa akong nakita .80 centavos per page. Hindi na naisip ng mga may-ari na palugi na sila.
SCANNING:
* Noon: 10-5 pesos per document or picture. Kumikita pa rin kami noon.
*Ngayon: 10-5 pesos per pasada. Meaning, kahit ilang pictures ang pwedeng ilagay sa scanner ay same pa rin ang charge dahil isang pass lang yun.
CD Burning:
* Noon: We charge 50-30 pesos per CD burn.
* Ngayon: Libre na ang burning kung nagrent sa iyo. 15 pesos kung walk-in.
Solutions:
* Create an association that all members shall agree that their floor price will be a minimum of Php20.
* No more promo when you charge per hour or per minute.
* Lets all buy licensed OS and other office software. Makakamura tayo pag marami ang bibili.
All this solutions failed. Why? Eto ang mga sagot nila:
1. Nasa 2nd or 3rd or nth floor kami or nasa sulok ang IC namin. kung same lang ang price namin sa first floor or bungad ay di na kami pupuntahan ng mga customers.
2. Business is business, ako ang may ari at ako ang magdidikta ng price ko at wala na kayong pakialam.
3. 2-6 lang ang units ko kaya hindi na ako bibili ng mga OS na lisence mahal kasi.
**********************************
Tama ang mga comments na nabasa ko.
1. Location is very important
2. Quality of service
3. Speed of your DSL
4. You’re not paying any rent
5. Additional services
6. You do the troubleshooting/PC repair
7. Hands on
8. You have more computers than the other shops (intimidating ang dating)and all units are fast.
9. Your rate is P20- P25 per hour
10. You and your employees are not rude to your customers
If you all have this. Mabubuhay ang IC mo.
The lack of electricity in some parts of Mindanao due to insufficient water to run the turbines has already caused the closure of many I-cafes.
If you want to start a cafe include a diesel generator in cost if you are doing it in a geographic area with frequent power outages.
Gasoline generators are too expensive to run and still make a profit.
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Tama yung sinabi ni Dave Starr. madaming mga appliances ang madaling nasisira kasi walang proper grounding. pero tama din naman si Rick. Yung word ko kasi na ginamit ko eh “common ground” so medyo general.
Doug:
Gaya ng sinabo ni Rick, posible yun. nagawa nya, nagawa ko narin, so may malinaw na ebidensya na pwede kang makakuha ng 110v out of 220v and ground. ginagamit ko yun pag brown-out at kapag may isang terminal na gumagana, nakakagamit parin ako ng mga appliances ko. Pero, tama kapa din sa sinabi mo about proper grounding, gaya din ng sinabi ni dave.
Mabuti nalang at may mga tao pang kagaya nina Dave, Doug at Rick na nagmamalasakit sa ganitong klaseng forum. Kung wala sila, malamang, madami satin ang medyo nangangapa parin sa mga info.
Anyway, meron na ba sa inyo ang nakapag try gumamit ng Linux sa IC? pag naiicip ko kasi, medyo komplikado, although, posible. may mga way para maka pag run ng mga software ng windows to Linux, at may mga software ang Linux na kagaya ng sa windows. Sa tingin nyo ba eh ideal yun, kung mami meet ko naman yung demands ng mga customer?