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How to Start Internet Cafe Business in India?
Internet café or simply cyber café is the place where people hang out to use high speed internet and other computer services including games. You sell your services per minute or per hour. Internet café is becoming popular among teenagers and also tourists. Food and drinks can also be served to the customers.
Requirements for the business
The cost of the business setup depends on the number of computers and the extent of services that you are planning to provide. The basic requirements for the business are
- Client computers
- Internet connection – high speed
- A server computer to control all the client computers
- Other hardware components related to networking
- A stall for selling drinks and snacks
The hardware components would not add much to your budget. The total cost of setup depends on the type of network you are planning to use. If you are planning to opt for wired networking, the hardware components would increase and make the space congested.
It is smart to spend a lot on networking and use second hand computers as people come here just to enjoy high speed internet and not a well equipped computer. High end graphic processors and cards are very essential.
If you are planning to start with less than 5 computers (4 plus one server), 384-512 kbps internet is sufficient. In case of more than 5 computers, you would require more than 1 mbps speed.
Your customers would be students, working people and anyone who is in need of internet services. All internet cafes in your locality would be your competitors. You need to attract the customers with promotional offers and word of mouth. The brand switching is easy and the purchasing power of the customers is very high. The entry to the market is open to all. Thus, there would be a lot of competition from small companies and big companies, as well.
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Profitability of the market
70% of the youngsters own a device through which they can access internet. Thus, people usually are endowed with devices like smartphones, laptops or desktops that restrict their foot prints in a cyber cafe. The internet cafe usage in India was 85% in 2008-2009 and today it is lower than 15%. To gain a market place in this business, you should provide a little more than just internet. Let it be games or graphic design services or anything related to internet that would attract the people. The environment should be pleasing and the computers should be free from virus and spam.
There is always an internet cafe near your business, to steal the dissatisfied customers from you. The niche places for the internet cafe are near educational institution, lodges and hotels where you can find a lot of youngsters. Alternatively, you can find the place where the power cuts are more common and use generator powered internet cafe to attract the bored local people.
Return on investment
Let us consider a tier 3 location where the rent for the spacing would be around 4000 rupees. The internet lease line would be approximately 3000 rupees per month. A second hand computer with all required elements would come around 30,000 rupees. If you are taking up a loan for buying 7 computers (6 client computers plus one server), the EMI would be approximately 7,000 rupees per month (for three years)! The total fixed cost for your set up would come around 14,000 per month.
The electricity used can be assumed as one rupee per hour. You would need 1500 hours to breakeven your fixed cost alone with a browsing rate of 10 rupees per hour. If you open the cafe for six days a week and for twelve hours, it would account for 1800 hours (25 * 12* 6 computers). Thus, only if your cafe is 83% full, you would be at least able to break even.
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The only way to make profit in this industry is to provide other services like scanning (5 rupees per page), printing (3 rupees per page), booking railway tickets, paying electricity bills and so on.
Managing an internet cafe is one man’s job. But, it is always better to have a semi-skilled person for helping you to collect ID, note the time, take print outs and other processes. You can also hire a network skilled person who can take care of the performance of the computer and also help you in the additional services.
- Attract a lot of new customers by providing discounts for the login tickets.
- Add all additional services like scanning, printing, burning CD, faxing and others.
- Add gaming services to increase the foot print of youngsters.
- Using multiplayer games would increase traffic to your cafe.
- Sell small hardware products and accessories like printing paper, mouse, compact discs, pen drive, stationery items, mobile recharge and so on.