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March 25, 2009

Is there hope in the Net Cafe Business?

About a year ago, I wrote about the state of the internet cafe business in the Philippines and why it’s a seemingly losing battle. A couple of days ago, I mentioned that I started venturing into the Internet Cafe with a friend. I got emails asking why I thought the net cafe is still a viable business and here’s my take.

internet cafe businessAgain, I’ll refer you to the points I highlighted in my previous entry — location. If you believe that you have the right location then you’ll have a higher probability to succeed or even just getting back your investment in a short time.

Your goal here is to be able to recover enough of the initial capital in order to re-invest in upgrading your workstations in 2 or 3 years. Otherwise, you get left behind with older and slower PCs that you’ll lose customers (esp. gamers) to nearby competitors that offer better ones for the same rates.

The major driving force with my decision to going into the internet cafe business is different though. What I am looking into are parallel businesses that I can put on top of the net cafe business without incurring additional or too much overhead.

That way, all I need is for the revenues of the net cafe to at least cover rent, bills and wages. Whatever profits I am expecting will come from other side businesses.

What are possible side businesses that one can add on top of an internet cafe? Well, some of them are already being offered in most shops:

  • Gaming cards for pay-for-play games (Level-Up, e-Games).
  • Cellphone reloading for Smart, Globe and Sun Cellular.
  • Photocopying, printing, scanning and CD/DVD burning services.
  • Food and drinks.
  • Photo-ID and photo printing.
  • Custom cellphone uploads (ringtones, wallpapers, games, apps).

You can also offer outsourced services:

  • Computer sales and repair services.
  • Encoding/typing services.
  • Digital Photo services (better than webcam quality Friendster photos).
  • Card Design/Printing (calling cards, invites, certificates, custom greeting cards, etc.)
  • Video conversion/authoring.
  • Cellphone and electronics repair services.

If you add revenues from all these sources, they could be a significant amount on the returns. Of course, you only select the ones that your manpower can handle and your location. The rest can be outsourced. The ideas here are more applicable if you’re located in subdivisions or villages. You can look into totally unrelated combinations too — like a laundry shop and a net cafe, a video rental, a used book store, a car wash service or a 24-hour grocery.

The idea is to share the burden on the rent and bills which usually takes up majority of the operational costs.


56 Responses to “Is there hope in the Net Cafe Business?”

  1. mojtaba says:

    am no spek englesh

  2. Hazel says:

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  3. vertex says:

    i think the most important things for net-cafe business is :

    . the shop name must be not more than 4 characters >> cool & easy to remember ; like core/+plus/Xb!t/town/ … etc.

    . always be defferent , i mean about the atmosphere , furniture , & the lighting of the place ! makes the customers feels they are in defferent world , not just a regular netcafe !!!
    *here is one idea :
    each pc booth have different design than another , the design of the booth telling you a story of fantasy world ~

    . the pc’s should works very excellent full services and no errors and missing application’s makes everything so easy & perfect to handle .

    . make an customers Id card system for charge unit , and each customer collect point’s by hours , reward after reach 50 point a simple gift .

    . i advice the food & drinks service to be very quick clean and in a good shape to handle .

    & always improve & develop ur netcafe shop , care for the customers and always ask them about how you doing in ur business what the like & what they don’t what they miss …

    wish to all success ~

    • Melvin I B. Cruz says:

      i do have a lot of questions actually regarding with this net cafe business. i’m a 3rd year BSBA maj. in Business economics and we have a Feasibility Study subject this same and my question is, is it okay to separate the non-gamer and gamer area ?? pls. e-mail me melvin23bravo@yahoo.com

    • Melvin I B. Cruz says:

      i do have a lot of questions actually regarding with this net cafe business. i’m a 3rd year BSBA maj. in Business economics student and we have a Feasibility Study subject this sem and my question is, is it okay to separate the non-gamer and gamer area ?? pls. e-mail me melvin23bravo@yahoo.com

  4. Glenn Vincent says:

    This seems to be a viable business venture in 2009, but I wonder if you can give us an update for 2012. Are the things and business practices mentioned still applicable for this year? The bottom line is will we be able to make money? Kindly update the article. I am trying to find a good business venture for my son and the article seems to give us the right stuff if only we can be sure of it this year. Did your Net-Cafe that you mentioned that you put up make any serious income? Thanks and Hope to hear from you soon. God Bless!

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Abe is the founder and Editor-in-Chief of YugaTech. You Can follow him on Twitter @abeolandres.

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