Putting up an Internet Cafe biz in the Philippines? Better think twice!

by • April 19, 2011 • TechnologyComments (9)2296

 

I am writing this article for the sake of those people who are planning to engage in the most popular and “known” to be easiest type of business to put up nowadays – the Internet Cafe.

 
Cybercafés once populated the streets of the metro. Most of them are commonly found in most malls and commercial areas particularly near schools. Their presence gave birth to the availability of computer access and internet technologies for the common Pinoy. Most of these establishments’ targets are students who don’t have their own PC or other similar devices to aid them in their studies or leisure activities.

 
The arrival of DSL (Digital Subscribers Line) High speed connections made digital computing far more attractive and entertaining. The emergence of various high-tech devices even made the World Wide Web a fascinating place for Juan and Pedro to spend their time.

 
I did engage in this type of business as I have mentioned before on one of my previous articles. I did earn a decent amount of money for quite some time while managing my own internet cafe business. But after six years of operation, I finally decided to give up and look for other income-generating solutions that are more compensating and rewarding.

 
I am not forcing nor misaligning our readers into not entering this kind of business since the success of each business may depend on various factors. But for the sake of this article, here are the points that made me decide on closing down my business:

 
SATURATION
When the prices of computer parts and internet services started to become cheaper and be made available to every Filipino household, Internet Cafes started to sprout like mushrooms out of nowhere. This made the competition even harder. Even government agencies did not have rules or guidelines for putting up one nor agencies to monitor pricing and operation. Establishing an Internet Cafe is just like putting up a sari-sari store (small type of convenience store).

 
PRICE WAR
Price has always been a deciding factor for some customers to frequently visit your place. But due to the emergence of numerous Internet Cafes, pricing your services is a difficult one. An Internet cafe owner will eventually be forced to lower his prices just to be competitive in the market until it finishes him off and soon the rest will follow. I was even forced to remove some of the perks and features just to cope with the competition.

 
COMPENSATION
Even if most people see that owning an Internet Cafe is worth the investment, now I can say that it is not. Sometimes I thought that I was saving enough money for my future but in the end I just realized I was saving it just for my business to survive. Most of the money that you’ll get will be allocated in paying for the utilities that you have consumed throughout the course of your operation. You will save some fair amount of cash but I can say it is NOT worth the time and money. Hard work is not equally compensated.

 
TAXES
The city where I established my business on was not that helpful. For every year that I have operated my business, I always pay a higher tax rate even though I did not make good income for the previous year. Our local government even implemented different ordinances every time we renew our license forcing us to pay additional amounts. It is only during this time that I have proven that our government is indeed swimming in an endless sea of corruption.

 
There are other reasons why I say that the Internet Cafe is no longer a good business venture. Though where I failed some may be successful. Factors like location, market availability, number of available stations for rent and the services that you offer may change the game. But as long as there are no proper rules, laws or any institution that will monitor and support the operation of internet cafes, I will think twice before I open one again.

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9 Responses to Putting up an Internet Cafe biz in the Philippines? Better think twice!

  1. Cocoy says:

    Thanks for the info. I am currently conducting a feasibility study putting up this kind of business. You really made me think twice. :)

  2. xarki says:

    The I-cafe industry is becoming a band wagon. There is no solid regulating body present so everyone can put up this kind of business that it is not as competitive as a few years ago.

    I closed mine because of the LGU’s unjustified collection of business taxes coupled with unfair competition at my place. No one near my vicinity operates legally (that is with business permits & software licenses). Plus the very low price of service that would surely kill every I-cafe that will be put up. Estimates confirms that an I-cafe nowadays will surely run for 3-6 months then will eventually close down due to bankruptcy.

  3. dciresons says:

    I currently have an internet cafe and Yes i agree with your post. It’s been 5 yrs. that i’m operating this kind of business but still no progress.. I am really tired and i want to quit. :(

  4. xarki says:

    If you decide on bailing out, make the decision as soon as possible so you would still have time to work on the remaining resources that you have.

    I have at least earned enough savings during my shop operation and I have sold the remaining furntitures and equipments that before they totally lose their value and use the money for other possible income generating ventures.

    Now I have more peace of mind as before and more opportunities ahead of me.

    it is necesary to know when it is time to raise the white flag.

  5. Gener says:

    Internet Cafe Biz is dying so i l left my website ulop.net and started other businesses that is better and money maker than the so called “computer shop”

  6. xarki says:

    Yes! I am familiar with ulop.net. I too was once a member of that Icafe owner forum boards.

  7. Find a suitable location for your venture which are likely to attract stable as well as casual customers. Locating near a school may attract younger customers or locate near other cafés or small shops to catch pedestrians in the area.

  8. Hi, i believe that i noticed you visited my weblog thus i came to go back
    the favor?.I am attempting to to find issues to improve my site!I guess its adequate to use
    a few of your concepts!!

  9. Thanks for finally writing about > Putting up an Internet Cafe biz in the Philippines?

    Better think twice! | PinoyGigs.com < Loved it!

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