Internet Café Tips for Investors in the Philippines – Part II (Location)

If you play chess you will understand that no matter how powerful your piece is (ex. Queen), it is useless when placed in a position where its mobility is hindered. With that said, even if you have the best services (high-end computers, skilled people, quality services etc.) but if you are not accessible or visible to customers, you will not survive in the business.

In choosing a location for your business you should determine first who your customers are. For me, I would go with the following ratio:

10% High school students
60% College students
30% others (Working people, Relatives of OFW, etc.)

With that ratio, I would choose a location near Universities/Colleges but it is also near residential areas and businesses. As you can see, this is where major internet café are positioned like Netopia (inside shopping Malls that are near colleges). Although this would mean going head to head with the big players, there are other features that you could employ that they can not. I’m not talking about lowering your price; I’m talking about having your business outside the mall and opening your business early and closing late. This is because shopping malls usually opens at 10a.m. and closes at 9pm. I’ll discuss other setup that you can use in another post.

Well, that is my ideal setup… You may have your own… it depends on your risk tolerance. I’ll discuss the advantages and disadvantages of each location in consideration with your target customers.

Near High Schools
Advantages:
• Rest assured that you have customers whether or not they have school assignments or projects. It is because high school students mainly play games.
Disadvantages:
• Usually putting up an internet café with “gaming” services near schools are prohibited. You should check existing local ordinances. But even if there are no existing local ordinances that prohibits you to offer gaming services near schools… there is always a possibility that they will make one (especially if the parents of addicted students will complain to schools and ask help to your local government).
• Low sales during Saturday and Sundays. But the most dreaded season is when students are taking their long long long vacation!!! Aw! You should have enough savings to pay your bills during those months.

Near Colleges

Advantages:

1. Compared to high school students, it is obvious that this market has greater resources to accommodate their gaming and internet needs and desires J
2. It is more unlikely that there would be any “strict” implementation of any rule/ordinance that prohibits internet café near colleges. Why? Because internet café is more of a need than a want when it comes to college students. They are doing more research and project compared to high school students.
3. Your “other” services will be availed more frequently by college students like printing services, research, encoding, webcams, card, tutorials etc. Unlike highschool setup, hindi na gaming and internet ang bread and butter mo! You earn a lot with these extra services.

Disadvantages:

1. Again, when sem break comes expect a slight decreased in sales. But unlike highschool, you can still survive during vacation as there are summer classes in colleges.

Working People:

I just found a perfect place if you really want to target working people especially people who belongs to the upper mid class of society. You just need to compete with Netopia. The place is at Ayala, behind Glorieta. Their current price is 50 pesos an hour!!! Last time I went there, I was on the waiting line! I guess they have around 30 – 40 computers. Imagine that.

Part I