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Top Three Internet Cafe Location Decision Mistakes

“Just” Personal Preference:

I will put up my business in my hometown. So that everyone I know can see that I’m big time! And besides it would be easier for me to check and manage it… right?

The most common mistake when identifying a location for an internet café is that it should be near one’s crib, regardless of its feasibility in that location.  I was a gamer back then and I have put up my internet café within my hometown so that I can play network/online games and have access to a superfast commercial internet connection whenever I want all day, all week, all month all year! I’ve realized now that it’s a fools paradise.

Do things right the first time. You should never loose site of your goals in putting up a business. You are here to make money first not fame and comfort. Identifying a good business location is crucial to your success because of the considerable large amount of money that you need to put in… you don’t want to relocate after realizing that this is not where you wanted to be in the first place.

Popular – It’s where everyone goes:

What is right is not always popular and what is popular is not always right – Albert Einstein

What I noticed back then when I had my internet café was that every month there’s one or two new internet cafe in our area. It’s like playing basketball but there’s no limit in the number of players… chaotic and suicidal.

In franchising, there’s a rule of limiting the number of  franchisee in an area to protect their share of the market. But this is destroyed if there will be hundreds of investors who will put up the same type of business in that location. That is the downside of laissez-faire, existing businesses are not protected from this situation, unless your government practices positive non-interventionism.

One of the purpose of this site is to ensure the health of the internet café business in developing countries by educating investors that market share should be one of the primary consideration to think of when choosing a brick and mortar business location. When you see that a place is over populated with competitors and market share is small try looking elsewhere.

Some internet café owners are wise in choosing their location. I’ve seen one internet cafe near I.T. companies, an international university, high class restaurants and amazingly he has no competition! Look and you shall find, expand your horizon and get out of your comfort zone. That brings us to my next point.

Cheap Rent:

The cheapness of man is every day’s tragedy – Ralph Wardo Emerson

Cheap rent doesn’t automatically mean profit. If your location doesn’t make your internet café viable, you are basically throwing away your money. Double the damage if it’s your life savings you are investing!

First thing that you should consider in your feasibility study are prime locations and not cheap locations. Cheap locations attracts more competition. Remember that internet cafés can be easily put up by anyone with some money and lots of determination.

High number of competitors >>> decrease market share >>> price war >>> decrease profit >>> bankrupt

Also cheap locations “may” indicates (but not all the time):

  • lower spending habit of potential customers
  • Low visibility to target customers.
  • Low visibility = high risk for theft or crime

Where am I going with this? Your target customers should be middle to upper class people who are on the go, even if they have their own computer / laptop, they are unable to bring it with them because:

  • They are traveling light
  • Want to play network games with friends
  • They are working near your internet cafe and they are not allowed to bring their own laptop at work.
  • They are in school and on break.
  • Other reasons

With this in mind, you should consider accessibility, your place should have a decent parking place in front or there are nearby parking area.

Now after considering the prime locations and you found out that it is not feasible, you work your way down to the next less expensive location then redo your feasibility study. This is not an exact science, it is an art in itself so be patient… don’t rush in.

Friendly Tip

Think like a customer. When was the time you needed access to the internet but you don’t have your mobile internet device with you? Or when was the time you were traveling and wanted to play games (alone or with friends) to kill time but the nearest internet café is a hundred blocks away? Where were you on those times? Determine who your customers are and then search the internet for places where they usually go.