want to open up an internet cafe not sure where to start

PlutoinCapricorn

I have seen the Easy Internet cafes in London close one by one: Stelios said that they were his most expensive mistake. They got some income from advertising on the PCs I think.

I used to use them a lot, but not since I got internet access at home on my laptop.
I occasionally also used a cafe when on a short break, but not since I discovered that I could get free access in a library. And now that I have a little netbook and mobile broadband, I don't need anything else.

Tourists who want to check their email and young men who want to access adult sites seem to be the main customers for internet cafes now, and many places offering internet access do this as a sideline.

j0annepsi

I don't want to rain on your parade, but IMO you'd be better off opening a chocolate teapot shop!

Take a look at internet cafes in your area. In my area most are charging between 50p-£2 per HOUR for internet access. People don't use internet cafes in the same volume that they used to. Laptops and broadband connections are so cheap that almost anyone can afford to get online at home.

I really cannot see this being a viable business.

jamespir

thanks for the peoples help and advice i think i will just stick to the cafe idea and see how it pans out

PolishBigSpender

And you think that 3000 pounds (half of which is a loan which needs repaying, don't forget!) is enough to open a cafe?

Go away, get a job in catering and get some experience. Just because you think "cor blimey, people can't get a cup of tea in town" doesn't mean much - the kind of clientele that would ask Greggs if they sold tea are going to be very price sensitive, especially in this economic climate.

People often go into new businesses (that they don't have experience in!) with their own money and succeed. But they do their homework, and crucially, they have deep pockets to make sure that they can stomach a loss. I can give you plenty of examples - LD Lines are currently trying to find the 'magic formula' with cross channel ferries. But they have exceptionally deep pockets and don't care if they lose a few tens of millions Euro in the process.

paulwf

If you can get it right the hot drinks market can be very profitable. A cup of tea that you can sell for £1 upwards costs around 10p (inc cup, sugar, milk etc) and coffee that sells for £1.50 upwards around 20p. Pastries, crisps and other snacks can have 100% markup.

Despite the recession the cafe market is still buoyant, as I've witnessed in my town by a largish Costa opening this year and being packed every day. The recession is making people be much more choosy so you have to get the formula right, but in general people still have money for small cafe purchases, unlike large spends in restaurants which are suffering much more.

I think setting up in a town "off the radar" to Starbucks, Costa, Prets etc can give you a huge advantage over towns that are larger but are saturated with competition. However you still need to be objective and make sure there is a decent footfall in the right age demographic and that they have some spending money.

If I was in your situation I would be looking to open a very small premises in the right location. I've seen these work in many different towns...they are lock up "huts" with just room for one person, a coffee machine, sink and fridge. The outgoings are small as you basically have a handful of power points and water to the sink and that's it. Use your mobile to make calls and there is no need for broadband. You'll have room to make all the usual hot drinks and sell soft drinks from the fridge and crisps and pastries...there won't be room for much else.

OP in your first post you used the word "cheap" a lot, the coffee market can be very brand and image led so you need to get away from that thinking. You need to create a quality image even though your overheads will be low. Don't skimp on getting a good logo created which can then be used to produce good signage, uniforms and branded cups. It will make you look like a top class brand (with top prices) even though you are saving money elsewhere.

Your biggest expense will be a coffee machine and grinder, expect to pay over £2000 ex VAT. You can lease units to spread the cost, or there are even some deals where you can get free rental if you are locked in to buy a certain coffee brand. I would be wary of locking into a brand as the strategy of creating a quality image will only work if you back it up with a good machine and excellent coffee.

I think £5,000 before VAT could get you up and running if you are prepared to run it yourself for longish hours 6 days a week to start with. It would be very dependent on getting the right unit in the right location though.

Chew_Barker

Become a window cleaner mate.
When I started a thread questioning the level of finance needed to start up as a sole trader, all the responses were positive that it can be done for very little money.
Although I don't think the people that replied completely understood the question :rolleyes:

Slinky

Next time you go to the library, have a look for The Undercover Economist by Tim Harford.

It's an interesting book about economics, but for you it has a really relevant study on coffee shops, pricing, location, adding to customers spend etc

Would be well worth reading.

jamespir

PolishBigSpender wrote: »

And you think that 3000 pounds (half of which is a loan which needs repaying, don't forget!) is enough to open a cafe?

Go away, get a job in catering and get some experience. Just because you think "cor blimey, people can't get a cup of tea in town" doesn't mean much - the kind of clientele that would ask Greggs if they sold tea are going to be very price sensitive, especially in this economic climate.

People often go into new businesses (that they don't have experience in!) with their own money and succeed. But they do their homework, and crucially, they have deep pockets to make sure that they can stomach a loss. I can give you plenty of examples - LD Lines are currently trying to find the 'magic formula' with cross channel ferries. But they have exceptionally deep pockets and don't care if they lose a few tens of millions Euro in the process.

thanks for your advice sir alan :rotfl::rotfl::rotfl::rotfl:

PolishBigSpender

jamespir wrote: »

thanks for your advice sir alan :rotfl::rotfl::rotfl::rotfl:

If that's the kind of attitude you have towards people who tell you uncomfortable truths, then you won't last ten seconds in business.

jamespir

PolishBigSpender wrote: »

If that's the kind of attitude you have towards people who tell you uncomfortable truths, then you won't last ten seconds in business.

great buisness eye/link seem to think otherwise