The availability of free Wi-Fi in public spaces means internet cafes are dead, right? Wrong! There's a healthy market for internet cafes catering for specialist audiences, like gamers and remote workers looking for attractive and welcoming hotdesking facilities. These spaces enable groups of players to get together, turning the isolation of gaming on the internet into a communal experience. They also provide a space where remote workers can network with other self employed and freelance workers in their local area.
Of course, you'll need to invest in a strong, stable, and fast connection, as well as top-notch hardware – but there's a lot more you need to know about starting up an internet cafe.
- Research your target market
- Establish your customer profile
- Decide what services your internet cafe will offer
- What food and drink to sell
- Estimating income
- Buy an existing internet cafe
Research your target market
Estimating demand
Before investing in any business, you'll need to ensure there's enough demand. Opening a gaming cafe in a small village probably won't work, but in a large town or city, it could.
Spend time understanding your audience and establishing potential. It probably helps if you're a gamer yourself and understand the demands.
Areas, where an internet cafe may still be suitable, include cities with large student populations and those cities popular with tourists. Internet cafes are often used by remote workers looking for somewhere inviting to work, those who can't afford the monthly costs of an internet connection or those visiting your town or city.
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 that may benefit from an internet cafe?
- Are there local residents who commute into work a few days a week but spend the rest of the week working from home who might appreciate a welcoming and attractive co-working space?
- Are there other cafes, pubs, and food outlets in the area that will provide competition?
As well as the members of the public that you have targeted as potential customers for your internet and gaming services, you may also aim to attract passersby to stop just for food or drink. If this is the case, make sure potential customers know that they can buy food and drink without using your internet or gaming services.
Develop a business plan
Every business needs a business plan! Business plans are detailed documents that help you to define and design all aspects of your business. It will help you:
- Define your audience
- Predict demand
- Forecast profit
- Clarify start-up and ongoing operational costs
- Inform your pricing strategy
- Support your marketing strategy
Investing time in developing a business plan is critical in helping you to invest your money intelligently.
Why will customers choose your cafe
There are various strategies that you could use to try to attract customers to your cafe. 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
- access to the latest games
- 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
- relaxing and ambient music
- a welcoming exterior and a relaxing interior - gamers, in particular, will stay for several hours so you'll need to provide them with 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:
- which games are the most popular and how regularly you would need to renew them
- what opening hours would suit customers best. For example, gamers may want to play late into 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
Understand legal and tax issues
Running a cafe isn't easy, and as the owner, you have rules and responsibilities you must adhere to.
Establish your customer profile
Your market
Your target market is likely to include:
- 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 cafe.
- older people. Many in this group want to learn new skills. You may decide to run courses that can introduce this type of person to the internet and computing in general
- freelancers. Self-employed people and freelancers in the creative industries might appreciate working in a shared space where they can meet and network with other like-minded people.
- passers-by stopping just for food. Depending on the size of your cafe - and whether you intend to offer food - you may try to encourage people to use your cafe without taking advantage of your internet and gaming facilities
- 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 an hour's gaming for a reduced fee.
You may choose to run a membership scheme where people pay an annual fee in return for reduced prices.
Decide what services your internet cafe will offer
A traditional internet cafe is unlikely to be a successful and profitable business, so you'll need to offer something extra.
An internet cafe provides a place for people to relax, unwind, and access the internet. As well as providing customers with access to the internet and online gaming, any café is only as good as its tea, coffee, and food so that's a great place to start. Other ways to expand your offer can include:
- networked gaming – enable groups of gamers to play together
- organising events such as gaming sessions or e-sports tournaments
- offer other computer services, such as repairs and data recovery
- deliver creative IT courses – help people of all ages get the most out of computers and cloud software
- enable venue hire, for example for website launches or focus groups
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 cafe, including:
- set up your own website
- create a Google Business profile
- advertise locally
- engage local gaming groups
- target students through local colleges and universities
- develop a strong social media presence
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 hot and cold drinks - possibly because you don't want to go to the trouble and expense of fitting out kitchens and employing waiting staff. However, serving food may attract more customers, including those that are not interested in using the computers
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
- whether their will be a separate eating area. You may feel it is too risky to allow customers to eat and drink at a computer terminal, in which case you might only sell 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 fit a fully functioning catering kitchen
- whether you are licensed 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
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 services along the lines of:
- Networked gaming - from £5.00 per hour
- a flexible hotdesking space from £25 per day
You might decide to run a membership scheme where gamers pay a set annual fee and then receive a discount on the standard hourly fee.
If you serve food and drink, you may decide to price items in line with your competitors and other non-internet cafes in your area.
It's a good idea to visit other cafes in your area to get an idea of what they offer and how much they charge for them. Many cafes are diversifying and offer events including live music evenings, book clubs, board game evenings and themed nights.
Internet access and online gaming is unlikely to generate enough income to cover your costs and overheads. But creating an attractive and welcoming cafe with a working space where remote workers and freelance creatives can work all day could mean you have regular customers in the daytime before the gamers come in during the evening.
Estimating income
Your weekly income from customers using your internet cafe services will be affected by:
- the number of computers you have
- any charges you make for gaming/hotdesking
- the number of other seats (aside from those at a computer terminal) in your cafe - referred to as 'covers'
- how long you are open for each day
- the average 'spend' per customer
Example of maximum possible weekly income
Note: all of the figures are for illustrative purposes only
- your cafe has room for 10 people using computers and 10 other diners
- computer usage will be charged at £5.00 per hour
- each computer user will stay for an hour and spend an additional £3.00 on food and drink
- each non-computer user will spend an average of £5.00 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 £80 per hour from computer users and £100 per hour from non-computer users, meaning that you would earn £1,800 for a ten hour day or £12,600 for a full week.
However, in practice it is extremely unlikely that your cafe 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 cafe
- the level of local competition and how that will affect your business
- inevitable quiet periods throughout the day
- 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 gaming headphones, 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 internet cafe
You might decide to buy an existing internet cafe 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. It's also quite possible that the cafe is used on a regular basis by people using the hotdesking facilites 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
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 a genuine trading and financial position, so that the price you pay for the business is not too high.
