How to start up an internet cafe

Running an internet cafe could be a success if you offer something special to attract customers, like setting up gaming leagues. You'll find all you need to start up and run your own internet cafe in our practical guide.

Research your target market

Estimating demand

It's very important to make sure that there will be enough local demand for your internet cafe. First of all check out any possible competitors to find out how many establishments offer public internet access in your area. Bear in mind that these might also include libraries, universities and colleges that allow public access, as well as other internet cafes. Try to find out as much as you can about how competing internet cafés operate (if there are any in your area). For example:

  • what their opening hours are
  • the speed of their internet connection
  • what software and games are available for customer use
  • whether food and drinks are sold and, if so, on what scale
  • what is the level of computing service they offer
  • how helpful and knowledgeable their staff are
  • whether their premises and fittings are modern and smart
  • what other services they offer

You may find that your area appears to be undersupplied with only a small number of existing internet cafés, or none at all. If this is the case give some thought to why this might be. For example, there may be many local colleges providing free internet connections in students' rooms (to be used with the student's own computer) as well as free WiFi in shared areas or wired internet access from a number of terminals, or your area does not attract large numbers of foreign visitors (traditionally an important market) or does not have large expat communities (also an important market). Don't forget of course that a large proportion of this customer base will also have internet access from a smartphone data plan. Nevertheless, you may feel that regardless of the level of competition and the changes in the way that people go online, your business will succeed because it will offer a mix of services not provided by anyone else.

Target markets

It is a good idea to check out whether your local catchment area contains enough of the type of customer you will be targeting. For example:

  • is there a college and/or student accommodation close by - while students may not use your facilities for general internet access, people in this age group are often keen gamers
  • do foreign visitors come to the area - or are there established communities of people from other countries, such as eastern Europeans. You might be able to get an idea of this by looking at local shops. For example there might be a number of Polish food shops
  • are there residential developments housing the older generation near by (older people may be keen to take introductory computing classes or need some help to go online)

Although you are likely to have many customers who will arrive on foot, you may also hope to attract people from a distance, especially if you offer something that is not widely available, such as a very quick, uncontended internet connection through a leased line that will allow incident-free gameplay. If so, it is worth considering whether:

  • the area is well served by public transport
  • there is ample parking near by
  • the area is considered safe in which to leave a vehicle, particularly if you are planning to offer gaming sessions during the evening and night time

As well as the members of the public that you have targeted as potential customers for your internet, gaming and computing services, you may also aim to attract passersby to stop just for food or drink. If this is the case, try to ensure that these potential customers are made aware that they can buy food and drink without having to also pay for computer time, possibly by placing signs in your window or on the pavement outside your café.

Why will customers choose your café

There are various strategies that you could use to try to attract customers to your café. These might include offering:

  • competitive and user-friendly charging (for example allowing customers to carry over unused minutes to the next session)
  • a range of food and drink that your customers want
  • an atmosphere where people from all age groups will feel equally comfortable
  • excellent hardware and software
  • the fastest possible internet connection
  • convenient opening hours
  • helpful and knowledgeable staff
  • a full range of extra computing services, such as training courses and computer repairs
  • other related services like scanning or photo printing
  • a welcoming exterior and a relaxing interior - gamers in particular will stay for several hours so you'll probably need to provide them with very comfortable chairs

Find out what people want

Talking to potential customers before you open your business can save you from making wrong moves. For example you could try to establish:

  • what the ideal split of PCs and Macs would be
  • what range of services - if any - that local business people would be likely to use
  • which games are the most popular and how regularly you would need to renew them
  • what opening hours would suit customers best. For example, retired people may typically use the café during the day whereas gamers may want to play throughout the night, especially if they have to fit it in around work or education
  • whether they would prefer you to have a licence to serve alcoholic drinks
  • what, if anything, don't they like about existing internet cafes and public access facilities in the area
  • how much they are willing to pay and what pricing system would work best

Research current trends, plus legal and tax issues

Establish your customer profile

Your market

Your target market is likely to include:

  • students. Students without their own access to the internet may want to keep in touch with friends via Skype, social media and email and download music and videos to their own portable devices, as well as taking advantage of any other services you offer
  • foreign visitors. If your local area attracts a large number of foreign tourists, this could be a significant market for you. Not only will they use email but may also want to use the internet to find out information on the local area
  • people from other countries who are staying in the UK for a while. Internet cafes are useful for meeting up with people from similar backgrounds and for keeping in touch with friends and family at home. If you have lots of customers of a particular nationality, you may even decide to tailor your food and drink choices to them
  • gamers. As the quality of online games continues to increase, more and more people are logging on to play them. If your connection is very fast (faster than those available to domestic customers) you may be able to attract groups of gamers to your café. You may also decide to offer networked gaming of popular games, which may or may not be played online. You may decide to open through the night to accommodate this group of customers
  • older people. Many in this group want to learn new skills, use email, browse the web, be active on social media and shop online but are too daunted to attempt it on their own. You may decide to run courses that can introduce this type of person to the internet and computing in general
  • business people. It is unlikely that many business people these days will use an internet café as their primary access point to the internet. However, business people away from the office, at a conference for example, may want to work on documents, send files to colleagues and print out documents
  • passers-by stopping just for food. Depending on the size of your café - and whether you are intending to offer food - you may try to encourage people to visit without using the internet
  • people taking advantage of any other services you offer, like photocopying or printing photos from a digital camera

Special offers and discounts

You may decide to offer special offers and discounts at certain times. For example, to try to attract custom during quiet periods you may offer free drinks or a lunch deal where customers get a sandwich, drink and half-an-hour internet use for a reduced fee. Some cafes charge a reduced fee for internet access in the evenings.

You may choose to run a membership scheme where people pay an annual fee in return for reduced prices.

Don't forget to brief your staff on which customers are entitled to a discount, and how much. Guard against staff offering unauthorised discounts to their friends and relatives.

Decide what services to offer

The range of services that you offer in your internet café may depend on how much you are able to spend and the size of your premises, as well as your own skills and preferences. As well as wired and WiFi internet access, the services offered may include:

  • networked gaming
  • other computer services, such as repairs and data recovery, sophisticated software packages, document printing, disk burning and so on
  • IT training courses. These may be especially popular with older people who want to learn internet skills but are too daunted to tackle it alone
  • fax and photocopying services
  • venue hire, for example for website launches or focus groups
  • food and drink
  • graphic design services

Advertising your services

Whichever services you decide to offer it is essential to make sure that your potential customers know about you. There are a number of things you can do to promote your internet café, including:

  • set up your own website
  • advertise in your local newspaper and any other local publications, such as a leisure guide. If you contact your local paper, they may be prepared to do a story on your new business if you can give them an angle
  • buy an entry in an internet café guide
  • advertise in universities, computer shops and so on
  • leave contact details in outlets like delicatessens which attract customers from other countries
  • make sure that your logo and telephone number are prominently displayed on any business vehicles

What food and drink to sell

You will need to decide what food and drink items you are going to offer. You may decide that you are only going to offer a very limited range - or even no food at all and just a limited range of canned or bottled drinks - possibly because you don't want to go to the trouble and expense of fitting out kitchens and employing waiting staff. However, serving an extensive range of food may attract more customers, including those that are not interested in going online or using the computers for any other reason.

Your menu and drinks list

A number of factors will influence the choice of dishes you will offer your customers and the range of drinks that you will stock. For example:

  • how long you expect the typical customer visit to be. There is not much point offering only a range of hot meals that take time to prepare and eat if the majority of people will only be popping in to check emails
  • whether the eating area will be separate from where the computers are. You may feel that it is too risky to allow customers to eat full meals at a computer terminal in which case you may only sell less messy items, such as sandwiches and crisps if you're not going to have a separate eating area
  • the size of your premises. Your premises may simply be too small to allow you to produce a large number of different dishes
  • whether you will prepare dishes yourself or only sell ready-made products
  • how experienced your cooks are
  • whether you are licensed, and so able to serve alcoholic drinks. Licensing laws allow for 24-hour serving of alcohol, so if you're planning to stay open very late (for example to cater for gamers aged 18 or over) you may find that having a late alcohol licence will help you to attract more customers

It is important that you keep up with changes in consumer preferences and introduce new menu choices at regular intervals.

You might just decide to install a couple of food and drink vending machines rather than offering a full menu.

Pricing policy

Give some thought to your pricing policy, bearing in mind that you must charge enough to cover your overheads, including your own drawings. You may decide to price your computer services along the lines of:

  • Quick email check - £0.50
  • 15 minute session - £1.00
  • 30 minute session - £1.50
  • Hour session - £3.00
  • Photocopies - £0.10 per page
  • Black and white printing - £0.10 per page
  • Colour printing - £0.75 per page
  • Printing from disk or memory stick - extra £0.50 then usual per page rate
  • Scanning - £1.00 per page
  • Faxing - receiving £0.50 per page; sending from £1.00 per page
  • Networked gaming - from £2.00 per hour

All prices included for illustrative purposes only

You may also decide to run a membership scheme where members pay a set annual fee and then receive a discount every time they use a service.

If you serve food and drink, you may decide to price items in line with your competitors and other non-internet cafés in your area.

It's a good idea to visit the websites of existing internet cafes in your area to get an idea of the services they offer and how much they charge for them.

Estimating income

Your weekly income from customers using your internet café services will be affected by:

  • the number of computer terminals you have
  • any charges you make for WiFi access (if you offer this)
  • the number of other seats (aside from those at a computer terminal) in your café - referred to as 'covers'
  • how long you are open for each day
  • how full you are on each day of the week
  • the average 'spend' per customer

Example of maximum possible weekly income

Note: all of the figures used on this page are for illustrative purposes only

  • your café has room for 10 people using computers and 10 other diners
  • internet usage will be charged at £5.00 per hour
  • each computer user will stay for an hour and spend an additional £2.00 on food and drink
  • each non-computer user will spend an average of £2.00 and stay for half an hour
  • you will be open for 10 hours a day

On that basis, if each seat was always filled you would earn £70 per hour from computer users and £40 per hour from non-computer users, meaning that you would earn £1,100 for a ten hour day or £7,700 for a full week.

However, in practice it is extremely unlikely that your café will be at full capacity all day, every day, so to arrive at a more realistic estimate of your income you will need to take into account:

  • the estimated level of demand for your café
  • the level of local competition and how that will affect your business
  • inevitable quiet periods throughout the day - for example, lunchtimes are likely to be much busier than the middle of the afternoon
  • seasonality - during the traditional holiday periods you may experience increased demand

Income from other sources

You might have income from other sources if you offer additional computing services, venue hire or make retail sales of items like camera memory cards, USB sticks and so on.

Remember that in the first few months of trading your income will not be at its full potential as your business is becoming known.

Buy an existing business

You might decide to buy an existing internet café rather than start your own venture from scratch. Buying a going concern can mean that the products, customers, regular sales, staff, premises and equipment are already in place. Also there are established customers - although the nature of many internet cafés means that the majority of customers are one-off visitors, it's also quite possible that the café is used on a regular basis by people of a particular nationality or by gamers looking to take advantage of its excellent facilities

Other matters to consider include:

  • the speed and cost of the existing internet connection

But buying a business can be a hazardous, expensive process unless you have the right skills and experience on your team, including legal and financial know-how. Establish the genuine trading and financial position, so that the price you pay for the business is not too high.

 

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