Lessons learned from a failed internet cafe business

I Agree with everything. I did and experienced all of them so far… 4 years na shop namin.

Another point to consider is that the number of people going online via internet cafes is decreasing. The number of Filipinos accessing the internet from their homes on the other hand is increasing. From 71% down to 66% for internet cafes while 27% to 35% for home access. (This is from the Yahoo-Nielsen Net Index for 2011 btw)

With the rise of smartphone usage and cheaper netbooks/notebooks/laptops/PCs, I think the market for internet cafes will slowly be shrinking.

Additional competitors of internet cafes are the PISO NET MACHNES sprouting like mushrooms, your one peso can access the internet for four minutes, imagine how affordable nowadays to access the web.

Don’t forget about security. My brother put up an internet cafe a couple of years ago. The shop was robbed after two days of operation. They took everything. I was actually able to trace one computer because I have logme-in installed in each one and one computer was not formatted, although I was able to trace some computers from pampanga to manila before they were reformatted. I was able to get a screenshot of a company in makati paying for online taxes at BIR complete with the business name and address but the NBI was not able to do anything even though my brother has proof. In the end, my brother got frustrated and went to look for the place himself and ask for information. The next day, the computer was wiped clean. To this day, I still have the information. A used car buy and sell company in a building in Makati owned by a Chinese businessman is all I can say.

renting is one factor. lahat ng competitor namin d2 talo at nagsasara kasi haha.. nagrerenta sila kami hinde. samahan mo pa ng mababang singil.

-nakakainis lng sa mga tao pag walang internet or mabagal ay ung pagka-ignorante nila. ANG INTERNET PARANG KURYENTE LNG, PAGKA-WALA…. HIHINTAYIN MO LANG BUMALIK. hindi naman kasi kasalanan nung may-ari kung nawawalan ng internet eh.

thanks for sharing with us. these insights are useful in starting any business in this country of ours.

thanks for this one sir abe.

aside from offering internet surfing etc. why not offer other services like printing, scanning pictures, layouting to augment the income.

The given scenarios are true, but not all situation coincides. Just giving positive support to those who already has.
http://valuable-ideas.blogspot.com/2011/08/its-no-wonder-hes-doing-so-well-look-at.html

whenever someone I know wants to put up an internet cafe business, I always relate to them a comparison of an internet cafe and a lugawan.

you charge 15 to 25 per hour for computer usage while a bowl of lugaw costs the same, but you eat it 10 to 15 minutes.

I also owned an iCafe but we eventually closed it down due to that PLDT in our area is killing our business with FREQUENT DOWNTIMES.

Besides that, our computers were still competitive at 15 pesos per hour. But now customers just either play DOTA as a group or used up all of their time in FB.

MIcrosoft Word is just there for some and especially when printing SONG LYRICS. I think the best a computer shop to have is an all in one service, i learned that I don’t earn that much in rent but I earn A LOT in printing.

Plus the increasing illegal softwares is a threat to the iCafe business out there. All of my PC’s were legitimate windows XP, but my competitors were all WINDOWS 7. How can I compete with that?

Do it again? If not a cafe business… web startup? ;)

Ang malupit na competition eh ung sa mga urban areas, lalo na sa makikitid na kalsada ng manila. nagsusulputan ang mga shops. at mas malupit dito, ung iba nakaJUMPER ang electric connection.

Imagine, wala ng bayad sa rent ng place, kuryenta wala na rin. Kaya kayang kaya nila magbaba hanggang 10 pesos per hour. Patay agad ung mga legal na competing shops.

I worked for several Internet Cafes before but now I think of it as a slowly dying business. Internet packages are so cheap and you can even do facebook at your mobile. PC has become affordable also. Most of the cafes I’ve worked for are closed now. Glad I shifted into social media :D

That’s sad to hear Abe. I also have a small i-Cafe and times are tough. I actually wrote a couple of articles so that entrepreneurs willing to start up have a guide of some sort. But you’re right, the best teacher is still “experience”.

http://gmtristan.com/how-to-start-your-own-internet-cafe-business/

http://gmtristan.com/start-an-internet-cafe-business-in-the-philippines-part-2/

Mahirap talaga ang internet business sa Pinas, medyo dami ng competition..

What happend to the computers you used in the internet cafe?

@iloveboracay saturation is relative to location. University belt, yes I’ll agree with you bro that it’s very saturated. But I know of a prime location that has only one internet cafe. Around it are multinational companies and an international school… it’s charging Php50/hour. Their customers have access to the internet in their office and they can use their mobile phones for surfing, but how come they still hangout in that internet cafe during their breaktime and after office hours? And how come it has no competitors? hmmm…

@Yuga. We have the same experience Abe. All the things you mentioned are true. The typical business model of internet cafe is surely dying. What is needed for this industry is to adapt and evolve to the changing time. When starting, one should be fully aware of the threats and should have a sound strategy to overcome them.

Nowadays, those that are planning to start like a typical carinderia will surely lose. But those that will follow a structured and well thought of business plan like those first class restaurants will have a fighting chance, especially if taking the advice of people who have been burned and became wiser by venturing in this type of business. This is no longer a business that anyone can setup and expect success without careful planning.

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Tips and Guides in starting an iCafe
http://www.icafeproject.com
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I just opened an internet cafe this year and it’s not doing good. I must admit it was a wrong decision as I jump into it without doing much research and study. There are a lot of competitors in the area, though we manage to have regular customers (suki), still the gross income is not enough to pay for the expenses.Plus the problems that arise such as PC crash, connection error etc. which give me much headache. I am not good technically on computers that’s why I still look for a technician anytime there is a problem with the PC and network which means additional expenses. Any valuable inputs to help me survive in this business will be highly appreciated. Or does this mean I should give up?

4 years na ako nag-operate ng internet cafe ko, ang experience ko taas baba ang income kasi minsan may games na gaganahan silang maglaro, minsan naman hindi pero mga alternate lang na buwan pag may ma install na magandang laro babalik ulit ang customer. Talagang sa games lang nagsu-survive ang cafe pero ngayon mga half a year na humina na ang cafe ko, kababago ko pa lang mag upgrade kasi akala ko sa pc spec ang problema pero hindi na talaga bumalik mga customer ko. Marami na ring hulog piso na mga internet at game box sa paligid. Nasa residential ang area ko pero urban na may dalawang university na malapit pero hindi ko makuha kung bakit pakunti-konti nalang customer ko. Balak ko nga mag shift ng business pero hindi ko pa alam kung ano at kung magagamit ko paba ang mga pc ko. Any advice kung ano magandang business na magagamit pa ang mga PC ko.

meron din ako internet cafe, as of now working fine.. ok ang kita.. i maintain my pc’s tumatatngap din kami pc repairs, console repair, electronic repair, celphone repair,repair sa lahat ng gadget,, naexperience ko kc dati nung my competitor ako d2 sa baryo namin my pumasok na mga hulog piso. medyo humina ung net cafe ko.. so i decide to convert my other pc na gawing hulog piso at kinalat namin ol over the place,, lahat ng posibleng pwede nila lagyan sa buong baryo naglagay kami.. well after 2 months haha nadoble ung dati gross income namin… and its my advantage kc ako lng ang my internet all over the place.. kaya napilitan cla mg pull out ng unit… as of now buhay ang business..baryo kc ung lugar namin…

i invite all internet cafe owners to visit us, we can help you rise up and be at the Top! as we will help you with are services, features including battle-lan (interconnection of internet cafe antionwide or worldwide!)..

https://www.facebook.com/widosy

Maipapayo ko lang tatag ng loob, kaalaman sa negosyo, puhunan na hindi tinipid & good customer service. Simula tayo sa tatag ng loob tandaan hindi biro ang puhunan dito hindi din to masasabing tubong lugaw pero bakit dami nagkaka interest sa ganitong negosyo? Dahil sa kabataan, daming bata ano? Siguro dating kading bata na naglalaro ng pa rent kaya akala mo malakas ang kita ano? Pero sa totoo lang maraming namamatay sa maling akala. Pangalawa kaalaman sa negosyo ito ang sandata na kailangan para may laban ka, tandaan pag alam mo panong mag-asembol ng computer, mag network, mag trouble shoot ng may problemang PC sa pag hire palang ng technician malaki na matitipid mo. Ma makakaiwas ka na din sa technician na palit or bawas pyesa. Kelangan din na meron kang plan a,b,c kahit hanggang z! Ito yung mga hakbang na kelangan mong isunod kapag hindi nag work ang plan a, tandaan dahil dati ka din rumerenta alam mo panong maging isang customer ituloy na lang natin ito sa panghuli. Pangatlo puhunan nasabi ko na sa pang-una malaki puhunan ang kailangan dito HUWAG mong titipidin dahil makakaapekto to sa performance ng PC mo sa labanan ngayon hindi na din padamihan pabilisan na ngayon kahit 10 lang at isang server (for other service like Photo Editing, Printing, Typing etc…)as long na kayang maglaro ng gustong laruin ng potential customer mo mabibigay mo. Pang huli ito good customer service tandaan na nasabi ko na dapat may kaalaman ka mas makakabuti kung ex customer para alam mo pano ka makikiharap sa potential loyal mo na customer kahit medyo hustle ang kaharap wag kang mag-susungit matatandaan nila yan at sa malamang hindi na sila babalik ika nga 1st impression last! Kahit pikon na pikon ka na sa customer upakan mo na lang paisip ahihihi!
Ito ang 4 na importante kong mai-share sa 4 years kong pag nenegosyo nito. Sa totoo lang marami din ups & down pero ito survivor padin at nakapag patayo na ng bagong negosyo dadagdag inspirasyon lang 10 lang ang PC ko tamang diskarte lang po! Salamat…

@Joseph survey ka then look if ano bang laro uso sa location then research anong spec requirements nung game don mo malalaman if how much kelangan mong ipuhunan.

i work for the pc supplier since 2007, nakita ko ung market ng net cafe dami nga bumabagsak. pero last month sinubukan ko sumugal with a basic knowledge, inisip ko more on gaming ung install sa kc kung internet lang ung mga phone ngayon accessible sa mga net. halos lahat ng kabahayan ngayon may kanya kanyang computer nma sa bahay. pero mas masarap pa din kc maglaro pag madami kyo ung tipong may kanchawan asaral lan game ba, ika nila di kc nila nagagawa un sa bahay nila.. so far sa 6 unit na meron ako medyo kumikita naman,, bullshit lang kc ung brownout dito sa zamboanga city,, imagine 10 pesos lang per d2.
dami kc adik sa laro,,

Ano sa tingin mo ang viability ng console games cafe, I mean Xbox1 and PS4 for rent per hour din? Naiisip ko lang kasi madami ding mga games na magaganda sa console na alam ko gusto din malaro ng madaming pinoy pero masyadong mahal kasi.