A lot of people are asking if an Internet Café business is still a profitable business here in the Philippines, and a lot of bloggers and iCafe owners gave their opinions through forums, websites and of course blogs. Some may even used surveys, statistics, studies to answer this question in a positive light, full of earning potentials. And then there are success stories and there are those who failed due to the many challenges the industry is experiencing. So which is which? Confusing right?
You might want to subscribe now to avail a free Internet Café Feasibility Study and Business Plan Guide in the Philippines to see the real picture.
If you did your own research, you probably found positive comments like:
“The internet café business is a booming industry in the Philippines!” or
“I’m an internet café owner and I’m earning a net profit of Php50,000 monthly, I am now my own boss!”
Thinking that you will also succeed the same way as them, you’ll probably want to start putting up an icafe immediately in your hometown, resign from your job and withdraw your life savings?!
STOP, LOOK and LISTEN
I tell you right now, don’t get overly excited because you need more than people’s testimonials and self agenda driven advices before you spend your hard earned cash!
On the other hand, you might have seen the gloomy side of the internet café industry. Comments like:
“The internet café business is a dying industry because computers and internet connection costs are getting cheaper and cheaper, they are now affordable to the average Pinoy so the market and profit are getting small ” or
“The competition is too stiff, parang kabute na nagsusulputan ang mga bagong internet café sa isang area kaya nagkakaroon ng price war…. etc.”
Such comments will make you think twice right? Maybe you will no longer pursue putting up an internet café simply because you immediately believed the negative comments of failed iCafe owners, or bloggers who have limited background in the internet industry… and worst advice is from someone who have no background in the process of putting up a business that is designed for success.
You see, no one can rightfully say that a business is profitable or not without doing a feasibility study first! Remember that.
A McDonald store placed in Barrio Matatalaib with a population of 50 with an average daily income of 50 pesos per person will surely not earn profit.
But a decent Jollyjeep (a food stall) in the streets of Makati near 20 private multinational companies, with an average of 100 employees each and with an average daily income of 1000 pesos per employee, has a high probability of earning a decent profit especially if the owner have done his feasibility study and business plan correctly
Feasibility Study. The problem in doing a feasibility study is that a lot of people don’t actually know how to create one. You can download a copy of a feasibility study of an internet cafe, just google it up and you’ll find one. But the problem with these feasibility studies is that they are usually created by college students for the purpose of passing their classes and NOT necessarily applicable to real life investments. Why? Mainly because their assumptions are too optimistic and/or have not undergone verification. One feasibility study I saw in the internet assumed that each of his computer will operate for 12 hours / day… each and every day of the year. Without supporting market demand data, this is a major blunder and a costly mistake if you rely on that for your business decision making.
The correct process of doing a feasibility study (even for students) is to allot some time in your overall workplan an allowance to redo your study and change the major business factors (e.g. location) once you found out that the first one is not viable (see illustration). This is discussed in details for my clients.
Now of course we can not disregard the challenges being experienced by the internet café industry in our country. After all, what business that doesn’t have any challenges? This is where a business plan comes in.
Despite these challenges, there are still those iCafe owners who were able to overcome them. There are those that are enjoying the benefits of the only iCafe in their area and are able to command a Php 50/hour of rental fee (compared to some area with price war @ 10 or 5 pesos / hour!)
What’s their secret? Did they have a business plan? Or was it just luck? Or both?
If I’ll have my way, of course I want both. But really, what we have within our control is the planning and execution part of the business… the rest we leave it to the power of faith and prayers.
To your success! – Chazper