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?
ask ko lng sana kng maganda ba ung gamitin ung core 2 duo ba pro at gigabite na mother board for internet cafe. as well mura kasi sa amin ung nabanggit……….. pls pwd ko sana malaman!!!!!!!!! !! riply pls
@jojo
u should invest more on video card, u must hav a discrete GPU not build-in…
suggested specs:
CPU: minimum: athlon/p4 2.2ghz up
recommended: any dualcores amd/intel
GPU: recommended: gforce8600gt up, gforce9500gt up (latest ATi/nVidia GPU price range at P2,500~3,500) can be a decent performer..
RAM: DDR2 1GB up
HDD: 80GB up
Display: 16″ LCD for less power consumption/less eye-stress than CRT..
@jojo
u should invest more on video card, u must hav a discrete GPU not build-in…
suggeste specs:
CPU: minimum: athlon/p4 2.2ghz up
recommended: any dualcores amd/intel
GPU: recomended: gforce8600gt up, gforce9500gt up (latest ATi/nVidia GPU pricerange at P2,500~3,500) can be a decent performer..
RAM: DDR2 1GB up
HDD: 80GB up
Display: 16″ LCD for less power consumption/less eye-stress can CRT..
LOCATION+EXCELLENT SERVICE+BUSINESS STRATEGY is the most important s lahat, pro dpat affordable ung rental rate(P30=2hrs)..dpat mganda ung performance ng unit for competition..
im also an cafe owner at the same time technician d2 s subd nmin s palawan, kaso specialize ko ay more on gaming, so i started a 6units+1server last november and i make sure n ung units ko ay built for gaming coz un ang target kong cus2mers.
during 1st weeks mdyo knti lng ang cus2mers pro s klaunan many are keep coming back dahil sbi nla mas way better ung overall performance ng units ko kc competitors q..be aware of laggy connection kc un ang pnkahate ng mga cus2mers, if balak u mg-open ng 20units gawin u 12units=gaming at 8units=multitasking and get a dual ISP para 1 for gaming & 1 for the other set pra maminimize u ang connection traffic…
GL^^
That is good Juliet. I’m planning to have the same thing too. I will start with 5 computers (+1 server). The only thing is my place is really residential not near to school but it is near to major road. How much do you pay your staff?
Hi,
I just opened a computer shop with a partner last August. So far, it is a good business. It will really be the location, the service, and your business strategy on how to beat the competition.
In the area where we opened our shop, it is near a school and most of the residents are University students. We started with 6 pcs (+1 server) last August and now we have 10 pcs (+1 server). The money we used to buy the new pcs came from the earnings of the internet shop.
I would agree with the previous comments that there are challenges in this business so you must have a good business strategy and you must be willing to experiment with your market. And ofcourse, like what I always say to our staff, it is our service and the way we deal with these people that will create the big difference.
I believe we have managed to make our “suki” feel that they are already part of a family. That they have Ate’s and Kuya’s who even remind them to finish their assignments first before playing. That the parents feel that we are their partners. Sometimes, we even ask them until what time we can admit their kids.
On the other hand, our shop is for additional income only. My partner and I still work and we closely manage the shop. Ofcourse, our staff there is someone we could really trust with money.
We are planning on setting-up another internet shop in the province. The hourly rates are much higher and there are still much fewer shops.
Last, I have a question re the membership thing? How do you do it? Do you give like a card or something? I’m planning of trying this out. Please give me your suggestions.
Thanks much!
advantage. easy to start with. easy to maintain. you are the master of your own domain. because you own.
disadvantage. it gest borig specially if your shop is dead. just apply for a job. atleast u have a monthly income. stable
i will try this business because it is east to start with. a place, computers, and there you go you have urself a business.
dis advantage and advantage of this business?
@ jake .. short cut ko na ung need mo para makapag open ka…
1. BUSINESS PERMIT:
a. barangay clearance
b. mayor’s permit
c. NBI
2. INTERNET CONNECTION (DSL)
3. COMPUTERS / COMP TECH
4. BUDGET
5. TAGABANTAY (di mo kakayanin yan 24/7 haha!)
6. PRAYERS !!
gudluck….
-MoxSapphire
@ jake…
jake you need to consider ung place syempre…
better kung wala ka na babayaran na rent, kasi advantage mo na agad yun sa mga competitors mo kung meron man.. kasi kahit mag 15/hr ka ng rent ayos lang un…
you need also business permit..
unahin nio sa barangay nio (barangay clearance)
then sa municipal (or city hall)
then kung kaya pa ng budget sa NBI (optional)
magtanong tanong ka n lang jan sa area nio kung anu mga requirements sa mga papers…
GOOD may mga units kana kaso did you consider yung mga specs ng pc m? saan mo ba gagamitin, sa games or pure web browsing?
kapag sa games kasi you’ll need a high processor , the lowest processor I recommend is the dual core processors available in the market… around 2.4 ghz.. then also the video card.. I also recommend 512 mb memory of video cards PCI-E..
kung pure internet naman pde na ang Pentium 4… taasan mo n lang ako RAM.. upto 1gb…
mag windows XP kana lang as your OS kasi kung vista mejo di pa stable and it needs high specs..
you should also take the risk kasi ang internet cafe naman ay hndi rin stable (pana-panahon lang din)
may mga araw na down or may mga araw na malakas ang negosyo…
if your investment is around 200 thou, expected ROI is 1 yr…
dpending syempre sa net income mo monthly…
nasa strategy mo n yan on how you can invite customers and gain their loyalty…mplan different marketing strategies like promo’s freebies, discounts so that customers will more likely to go to your cafe…
You can also plan to have a sideline business like foods… especially if your customers will be more like to be GAMERS !! kasi hndi na tatayo yan sa PC hahaha!! xD
pde ka magtinda ng mga snacks / burgers / cup noodles / soda / etc. etc…
If you do not have technician to do the networkings on your cafe well, you should have .. hire one !! better if kakilala mo ung tech …. para may trust.. kasi di mu alam pde nila palitan specs mu eh pag di mu kilala… saka mataas maningil hahaha…
TO ALL INTERNET CAFE OWNERS / MANAGERS
let’s just pray na maging successful ang business natin and work hard… double or triple our efforts.. kasi alam naman ntin na mejo mahirap ang business na to… marami kalaban !!
GUDLUCK to all of us and Godbless !!
-MoxSapphire
Hi guys, I’m a manager of an internet cafe and bago lang ito… ngaung 2009 ko lang sya open ,, my dad and I are partners for this business and I hope mag click sya d2 sa meycauayan, bulacan.. although alam ko na mdami competitors I still believe na magiging successful ang business namin…
I have 12 pc’s and 1 server so mkakapag 5v5 ang mga gamers and may mkakapg surf pa ng net like the ladies na mahilig mag friendster, etc etc…
dota, cabal, counter-strike ang madalas na nilalaro sa area namin and some other online games… Ready for Crysis warhead / assassin’s creed / starcraft 2/ red alert 3 and GTA 4 …
wala din me rentals kasi sa hauz namin itinayo ung business. Actually ung old hauz namin kasi lumipat na kami, mga 2 houses away lang. para tipid na din sa rental..
ang balak kong rent fee ko is 15/hr sa una then mag raise ako ng 20 /hr kapag may mga regular customers na ko…
and syempre may membership din ung cafe ko at magppapromo ako sa mga members…
mejo high-end na din kasi mga kinuha ko na pc’s and server ko para makapag multi-task…
eto nga pala specs ng computers built for gaming ang MS applications..
sa WORKSTATIONS:
Intel Core 2 Duo 3.0 ghz
Gigabyte p35 Motherboard
2GB DDR2 RAM pc800
1GB Geforce 9500GT 128bit, DDR2
500w Hec raptor PSU
160GB HDD SATA
19″ LCD wide Viewsonic monitor
w/ a4tech KB
logitech optical mouse
a4tech headset
all w/ webcams
sa Server:
Intel Core 2 Quad 2.4 ghz w/ G-Power 2 Cooler
Gigabyte p35 Motherboard
2GB DDR2 RAM pc800
1GB Geforce 9500GT 128bit, DDR2
500w Hec Raptor PSU
500 GB HDD SATA
22″ Viewsonic monitor
5.1 altec lansing speaker
a4tech KB
logitech optical mouse
webcam
internal DVD Super multi drive (lightscribe)
internal memory card reader 15 in 1
…my capital is around 400thou sa units and 10thousand sa renovations ng place..ksama na tables and chairs..
I plan to have an aircon , mga 1.5 HP lang siguro or 1HP ..para mkatipid sa power .. actually ang habol ko lang naman is maging conducive ang place.. di naman need ng sobrang lamig dba?
ROI: maximum of 2yrs…
hingi ako mga opinion / idea and pieces of information sa inyo guys.. any reactions? comments? thanx in advance…
sana maging successful lahat ng business ntin … i’ll pray for it …
balak ko mag tyo ng netcafe ano bang paraan or anong manga kailangan,pra makapag open? isa po akong OFW at may sampong unit na ako biniliko ko sa abroad,sana manga bro.mabigyan nyo ako ng advice
omg i want to start this biz [ net cafe ], nut now i am tottaly confuzed. anyway thanks for all of you guyz. your comment helps a lot
150pcs . omg. ang lufet naman nyan. wow. 20 units lang sa akin >_<
d2 samin kahit hindi tabing school astig ang kitaan 150 pc 3rd flor puno araw araw 40pesos 3 hrs
dinadayo kahit malalayong lugar pa at hindi ka pa
maiinis sa unit na gagamitin mo… bago lang to
pero pumatok pa din kahit may katabing com shop
nag lipatan lahat ng suki nila dahil sa napaka
mahal na singil…
yeah. actually 21 lahat pc ko kasama server. and yes, licensed po lahat os ko. kc need ko yung update ng microsoft eh. dami kc bugs pag di ko ma update yung OS and u cant update it pag pirated os mo, lalo na yung gameguard na epal at yung bot ng cabal (cabalrider) nag error pag peke os kc di na update. ^^ nasa tyaga lang yan at pagbibigyan mo naman customers mo paminsan minsan. halimbawa naglaro sila ng DOTA 5×5 tapos nag time yung isa and ala pang extend. pagbigyan mo na lang hanggan matapos yung laro kung walang papalit sa kanya diba. ^^
mr. ned, talaga lahat licensed ang OS ng 20 PCs? baka ireport kita sa Microsoft Philippines!hehe!
kilala kita alam ko ang location ng shop mo! hehe!
dare me!
putah, ang tumal ng internet cafe business ngayon, magpapasko pa naman! Malapit na naman ang business renewal permit sa January 2009, nilalangaw pa rin ah!
hay naku, nakaka depress talaga ang present economic crisis!
in my opinion and experience. having a net cafe with 20 units is still profitable lalo na pag nalagay mo sa exact spot like mine is. 15 / hr but if want to be a member u can avail a 12/hr and per minute basis when u log in. kc bugyan ko sila ng username and pass to log in anytime they want to play. minimum purchase of 120 php though (10hrs)and especially if the units ur have rocks . i mean literally rocks. mga competition ko d2 are amd athlon lang at pentium 4… guess what mine is.. 6 quad core, 10 amd 64×2 5200+ and 4 core 2 duo all with 8500gr ddr2 vc @ 2Gb 800mhz. 160Gb nga lang memo and 15-17′ lcd monitors. so all my clients can play dota, friendster, bot ragna/sro/cabal, autoclick ran and conquer and my gay clients can edit modify pics burn/rewrite cds while listening to mp3s/mp4s all at the same time and they love it kc di nag hahang pc. and they come every day because of this. and i troubleshoot my own pcs. oo nga pala, di nag lang aircondition shop ko kaya I bought some cpu fans like cyth for the quads kc madali lang mag overheat cpu with the stock fans kc di aircon shop ko. 20 pcs still manage to get around 1.3k the least to 3k a day 9am-12mn.
( licsended po yung OS ko ah 32bit Wxp. di pa ako nag upgrade vista, loko2x kc vista, dami pro conflict or error)