Question

Need advice on starting an internet / gaming cafe

Asked by: frittonweb

Hello all!
This is probably one of the most life-changing and hardest questions i'll ever ask at Experts-Exchange. Please read the whole thing if you're going to answer, I'm assigning a high point value as i want some detailed advice / answers.

I'm a Freshmen in College in Chicago with a home in Michigan. I currently own a fairly well known (back home) website design and network consultation business. I know my fair share about the IT world, the intricate workings of networks, the internet, etc. I feel strongly that college isn't for me, that i'm wasting time and money, my time, and my / my family's money. I have a Michigan Education Trust fund that still has about $20,000 in it if i were to cash it out. I've been heavily researching the internet cafe business. (not so much the generic internet cafe but rather a high end gaming cafe including consols, etc. More explained later). I know i've got what it takes to start one up, and i've dreamed about it for years.

I've looked a little bit into the funding it takes and the time and with that $20,000 from my trust fund plus a little from myself i can start my dream with running cash for a few months. What my ideal business is: In the day time I'd offer a small coffee bar, tables and wireless internet. I'd also offer short (1 - 2 week) scheduled classes on using computer applications. (There is a large population of retired adults that are not quite familar with computers and always tell me they wish someone would just show them a little bit. Later in the afternoon I'd switch forms into more of a gaming cafe with good computers and a normal load of 5 - 7 games installed. What i think would actually make the most profit is about 6 TVs with the differnet consols hooked up. Just as there's lots of retired folk in my town, theres also a great deal of appropriatly aged young people that absolutely love videos games and would pull money out of there parent's pockets to continue playing video games in a social environment. At night I'd offer pre packaged goods such as soda.

I've already signed up at igames.org for a sponsor account that allows me to retrieve sponsor packages for all the new games and plan on regularly scheduling tournements which would attract a large amount of people from nearby towns as well as there is nothing like this in the 4 closest towns. (the closest is about an hour and a half away). I plan on having a street crew out and about in the local high school and around town passing out flyers with coupons for free time to advertise the cafe. I believe word of something like this opening in my town would spread very fast.

My current plan right now is to finish up my last trimester and start this in the summer ready to be opened with school starting. Here's my theory on why i think that would work well. My town is a beach town with quite a bit to do in the summer (lots of tourist traffic) so this would be a slow season for me. I'd take about 2.5 months getting this started then open it a little bit before school is planned to start back up. During the school season, my town's tourist population dies, however the people living there find themselves with not much to do. I think that opening the cafe around 10am, doing some classes, then being ready for an "after school rush" would having me doing quite well. I don't think that it would take me more that 2 months to get the building and everything set up. I've already got a large portion on my business plan done, as well as the other nessesities.

I would take a year off of school to have this started up, and then take it from there and see what happens. I haven't yet talked to many people besides a few of my good friends to get their opinions on this, but i'm fairly sure that my family would support me in my decision. If the business was still successful after the first year, i would hire 2 of my trusted friends that attend school at home to run the place while i attend college, and returning every other weekend or so.

I know that I'm leaving a GREAT deal of information out but i figure i'll comment with more as this goes on.
Please give me any advice that you can on anything, financing, start up, ramifications of stoping school, talking to parents about it, anything about the business of internet and gaming cafes, etc.

Please be critical and blunt. I need to make a decision and this will frankly help a lot coming from professionals and people that may have even done this.

Thanks very, very much.

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Asked On
2007-02-04 at 03:50:47ID22148729
Tags

cafe

,

gaming

,

computers

,

starting

Topic

Miscellaneous

Participating Experts
8
Points
500
Comments
15

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Answers

 

by: frittonwebPosted on 2007-02-04 at 03:51:22ID: 18462698

And yes, if you see this time this was posted, i am and have been loosing sleep over this :).

 

by: lherrouPosted on 2007-02-04 at 07:13:34ID: 18463115

Frittonweb,

$.02: I have not seen a lot of success for internet / gaming cafes in this country. In Europe, they are all over, but I think here in the US internet use and gaming seems to be more of a solitary affair, and also I think a much higher proportion of the population has computers and broadband internet access - hence there's less need.

If you are serious about doing this, the first thing you need to do is learn how to put together a business plan. In that business plan, you'll explore things like how much your costs will really be (startup, rent, wages, replacement of equipment, etc, etc.) and how much you will be able to reasonably charge for services. Only then will you be able to make a reasonable estimate of how much traffic you'll need to pay the bills. If, for example, you find that you'd need to have four "busy" nights a week, but can only reasonably expect to have two (Fri and Sat eves), then you'll end up losing money.

Another idea for you is to take employment at a successful cafe for a few months, so you learn the business. You'll need to observe what they are doing right (so you can mimic it) and where they (and you) can do better.

Cheers,
LHerrou

 

by: nickg5Posted on 2007-02-04 at 14:37:33ID: 18464690

I've been to Asia many times. Internet cafes are big. Very few people have computers at home.
I recently heard there is only ONE in the USA.
Too many people have computers at home, in school, they are in all libraries, and they are so cheap to get.

Now, a cafe where you conduct video game tournaments, that may be worth considering. Don't be surprised if that fails though.
Nowadays, people can play games on their cell phones.

I would think the only thing that might be atrractive would be the tournament angle. If you can get sponsors, all the better.

 

by: quinksPosted on 2007-02-04 at 15:58:01ID: 18464940

Don't.

 

by: frittonwebPosted on 2007-02-05 at 00:40:20ID: 18466440

Thanks for the posts Lherrou and Nickg5, both some good advice. I would deffinetly take a gaming angle towards my cafe and as mentioned before, in the day I'd offer classes to adults to cover late morning and early afternoon traffic. It's not true that there's only one in the USA, take a look at igames.org and you'll see MANY. Just none around me. I'm currently working on my business plan and right now (roughly) expect that I'll need 3 busier days. I think Friday and Saturdays will be big gaming days while sunday could possibly be a big class day. I've come in contact with the highschool's Business Professionals group and talked to their organizer about perhaps using the group members to teach some classes for volunteer hours + free unlimited accounts. I think that if i promote the business right an keep an ever changing flow of all the new games coming in for people to play on some good systems, i would fair quite well. I know a lot of people, myself included that go to gaming cafes just so they can play all the new games without paying the $50 for them and play them on systems that can handle the games much better than the basic run of the mill Dell.

Any more advice?
Thanks!

 

by: MeretePosted on 2007-02-05 at 04:37:34ID: 18467286

Hi frittonweb  I think your ideas a good, your busines venture is really in 3 parts that is a goo stradgety too.
I truely agree about the aging population and computer knowledge, you also may find that aging folks love playing computer games.
Its a great place to meet.
I feel research is your options. read lot and listen to your local folks as that is where your business will run, send out fliers for opinions and feedback. Has a 2way benefit.
I have not run an internet cafe but rather a small resort with the every increasing demands I included a indoor conference center with computers. For multi functions.
And as it wa in a tropical enviroment people from all works of life rented out the hall fro different functions.
For example have you heard of lan parties?
BYOL
Short for Bring Your Own Laptop. Some Internet cafes, especially those that organize gaming tournaments, allow you to bring your own laptop to the cafe instead of using their computers for wired Internet connection
http://www.internet-cafe-guide.com/internet-cafe-glossary.html

This guide covers a huge range and has some very interesting topics that may inspire you on towards more questions.
This should be ab exiting experience and something to lookforward to, with facts and lost of research it will be.
Dont make money the bottom line key to this business but rather do this because it is somehing you love to do.

Quick and Easy
Internet Cafe Guide
http://www.internet-cafe-guide.com/

Chers Merete

 

by: RDAdamsPosted on 2007-02-05 at 08:00:38ID: 18468722

Keep all your research in one place.  (If necessary create a copy to house elsewhere)

Be sure to write a business plan.  Put your ideas down including your projected expenses.   Scout out areas to actually house the project.  Look at other 'gaming' venues that are existing such as pool halls, sports arenas, cafe's etc.  

Be sure to speak with a few local gaming addicts to see what they think of the idea.  

Look at the demographics of your town......you can get this from your local government body.  It will give details as to the ages of the population by percentage.  

Also is the population of your center large enough to support this?  

 

by: masmusPosted on 2007-02-05 at 09:15:38ID: 18469358

frittonweb,

First and foremost best of luck with your business endeavor, if you choose to follow through.

I grew up in Valencia, California. While I was in high school (~5 years ago) about three internet gaming cafes opened up at roughly the same time. I enjoyed meeting up with my friends and playing Counter-Strike at one of these places every once in a while. We got together and competed in a couple of tournaments there, which I found very enjoyable.

Unfortunately, I don't think any of these cafes were successful. You're going to have to try and figure out a reason why its better to pay someone to play on their computer than to play at home on your own computer. Yes, the social aspect may take care of part of this, but I think you're going to need something in addition to that. It was very easy for me and my friends to set up a LAN party at one of our houses instead of going to the gaming cafe. Consider making your gaming cafe a place to hang out, or perhaps consider trying to create a sort of gaming community so that people want to regularly come in just to see what's new, etc. Perhaps having the latest and greatest gaming computers will help, but that can become very costly trying to keep up with those technologies regularly.

Another reason why I think the one I used to go to failed was because the owner's son was giving free playing time to people. I think he was probably 15 or 16 years old, but he thought that hooking people up would make them like him, when in reality he was probably just ruining his father's business. You'll have to make sure that you hire trustworthy and responsible people to run your shop in your absence. They will have to be friendly with customers, but they'll have to tread a thin line and not become too close to the customers where they would rather win the customer's favor by handing out free time than seeing your business succeed.

Also, consider location. Imagine if you could find a nice place for your business like within a shopping center: perhaps Mom and Dad can let there kids play some games while they are in the market shopping for 45 minutes. Perhaps you can find a location that is near a high school so that kids can walk there immediately after school and hang out there until their parents pick them up.

Once again, good luck!
masmus

 

by: redseatechnologiesPosted on 2007-02-05 at 11:44:38ID: 18470568

>>Perhaps having the latest and greatest gaming computers will help, but that can become very costly trying to keep up with those technologies regularly.

I was only interested in reading this, and wasn't going to post, but the above phrase will be frightfully true if you don't do it right.

The way that we used to do it (there was about 10 of us that worked at the same place, which was an OEM builder) was to basically roll out our own hardware every 3 months or so.

Get an account with a local hardware distributor, and build your own machines - when something new comes out, immediately buy it for your machines (within reason obviously) and then sell the old parts as a pre-packaged system.

We did this for about 3 years or so and constantly had the latest gear, for free, or occasionally at a small profit.

One immediate downside that I can see is that you are selling machines to people you are trying to sell computer TIME to.  Then again, if you are running classes with older people, or make the place good enough that the kids will still come in even if they have their own machine at home - that should not be so much of a problem.

Best of luck!

-red

 

by: freebuddyPosted on 2007-02-05 at 12:47:01ID: 18471116

 

by: frittonwebPosted on 2007-02-06 at 20:42:52ID: 18482441

Hey again all! Thanks very much for all of your advice. One good piece of advice thats sticking to me is the talk about "a reason why its better to pay someone to play on their computer than to play at home on your own computer." from Masmus. I think the classes covers a bit of this but also the location. The place i'm thinking about is right next door to walmart so the point of placing it near a shopping market is taken care off. I also thought about it being a computer service center and custom computer build center. Any ideas?

Thanks so much to you all!

 

by: redseatechnologiesPosted on 2007-02-06 at 20:47:58ID: 18482463

>>computer service center and custom computer build center.

If you can, that would help with rolling over your hardware more easily, but this should be something that you are already skilled in.

-red

 

by: MeretePosted on 2007-02-06 at 23:13:58ID: 18483120

I also thought about it being a computer service center and custom computer build center<< you could grow on that, as interest grows in yoru shop and what you offer
word of mouth is a good free advertising, The classes should gather interest in purchasing computers then you can also to be the service center.
being next to a WallMart  can create competition.
Personal touch customer care always wins.

 

by: frittonwebPosted on 2007-03-27 at 17:52:42ID: 18804826

thanks for the split points comment, for some reason i just let that slip. Reassigned points as best I could.

20120131-EE-VQP-002

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