Setting up an Internet Cafe?

ioquatix asks: "Hi there... I am planning (not 100% sure yet) on setting up an internet cafe in Christchurch, New Zealand. However, there are many interesting issues that I must resolve first, such as location, staff, security (thats one of the big ones, unfortunately), and computers. The question I want to ask is, who out there (there is bound to be a few) has set up an internet cafe, and what advice can you give?"

"What kind of set up did you start off with: 10 computers, 256kbit DSL, a dedicated T3 or something else? I am currently looking at 8 computers with some form of DSL (this should be the most cost effective solution). Cable might be available, but it depends on the location.

This internet cafe is primarily aimed at gamers, and I am interested to know how much success small internet cafes have had with bulk software purchases (say X = number of computers (8 to 10), X licenses for Half-Life and X licenses for Starcraft etc). I think I can get into contact with suppliers in Australia, but X licenses may still not be enough to be bulk. What suppliers (in the Australia/Pacific region) have other internet cafes delt with and bought software from? Please pass along any lessons learned if so.

What kind of times are the most popular? Being open all day costs a lot, so I was thinking of being open 5~6pm to about 11pm, seven days a week, and also having an 'all night special' on friday nights. What times do you run your internet cafe? What kind of special all night things do you have? For the readers out there, what times would be optimal for you and what kind of 'specials' would you want?

I am also interested how you deal with security. I have been thinking of basically hiring a bouncer to deal with gatecrashers and such (but this is rather expensive). Is security this much of a problem? I mean, how do you deal with a car of five drugged and drunken idiots intent on (as in smashing window/door down intent) getting some counterstrike goodness (or just seeing what happens when you stick someones head inside a broken monitor)? Do internet cafes attract this kind of person? I was talking to my parents, and they were saying that drunken people just drive around looking for a joint to gatecrash, and being open at 11pm just sounds like trouble to me. So does your internet cafe hire bouncers or some other form of security?

I had thought I would get people to 'register' first, and then book appointments beforehand - perhaps even some sort of video security system on the front door (or maybe even fingerprint ID/keycards). Has anyone tried anything like this and has it been successful? Can you recommend any such systems in existence? Any kind of 'register' before use system will always cause hassles for new users, and put off the casual gamer, which is also a problem...

The security situation also has a lot to do with location. I am currently looking at an area close to the local university, and also a location within the university. Getting a site within university would solve a lot of the security problems (university has its own security staff) so this would help, but I am not sure if there is a space currently for rent.

What kind of system should I run? Obviously most games are only going to run on windows, (and wine is a bitch, and imagine the bitchiness multiplied out against X machines), but I don't want to buy windows licenses (and I also don't want to pirate software) so where can I pick up some second hand windows 98SE licenses for a small cost? Would it be legal, if I was to advertise I will pay $20 for your win98SE license? Or would I be better off buying X licenses for Micro$oft Super Advanced Multigaming iExecution eServer Special Edition?

Anyway, I am not sure I have even thought through all the issues yet, and I am sure there may be something I have forgotten something, but this is just an idea I had, and the figures work out pretty nicely on paper, for a student income ^_^.

If you have any suggestions, please write me! I will be very interested to hear what you think.

Samuel Williams
coolfr3ak@gmx.net
http://utopia5.mine.nu/"

Comments

Re:First thing

[ThePilgrim]

Not sure about Internet Caffes, but I think a Gameing Caffe would go down a bomb.

Switch the games each hour, and allow as many or as few to link together.

Rotate the starting game through the week and have a newbies night.

The sight of 2 dozen game heads should put off even the most drunken thug so security while open should not be a problem.

Keep at least one day a week back for private parties.

The advantage is that you don't need an internet connection, and most modern games will allow you to network them selves together without having to have a disk in every machine.

As to security of the machines them selves.
Don't install a floppy drive and see if you can find some way of padlocking the CDROM drive.

Don't supply speakers, but do supply headphones.

Hope this helps

The Pilgrim

Perhaps not so complicated

[yancey]

An established cafe (as in coffee) here, which happens to be across the street from a university, has just begun offering network access, yet they provide no computers.

The cafe got a DSL line and simply provides ethernet jacks to it's customers for very reasonable prices. The customers pay 4.00 USD to have all-day access and can pay 16.00 USD for all-week access. Students bring in their laptop computers, pay their fee, sit down and plug in.

The beautiful thing is that students can browse the web but can also play net games over the local ethernet and the cafe does not have to pay for expensive computers and the software licenses, only for the DSL line and the network switch and cable and jacks.

It seems to be working out very well. The cafe has noticed that the environment is now more studious with people sitting longer and drinking more coffee. If they spill coffee on the keyboard, at least it is their computer and not yours.

Cyber Cafes

[markwelch]

Darn, I just typed a very, very, very long reply detailing my experiences in several internet cafes in London, and then I did something and lost all that work.

Anyway, my suggestions in a much shorter version:

• Visit as many cyber cafes as you can in as many different environments (tourist, college, city, small town).
• Surf the web to see the web sites offering information about cyber cafes. Often they include helpful pictures showing layout and amenities. They almost always detail the available software, and indicate what other business activities (cell-phone, photo processing, bookstore, coffee) are at the same business. And they will also identify any special capabilities (for me, it was important to be able to plug in my USB camera, install its driver, and download pictures to burn onto a CD-R disc -- which only one cyber cafe in all of London allowed (it was on Edgeware Road).
• As others have suggested, do your market research.
• Consider taking a job in a cyber cafe somewhere for a few weeks (for example, sign on just as the students all quit at end of semester). (Talk to a solicitor/lawyer if you do this, and don't sign any non-disclosure employment agreements!)
• Use common sense. For example, if you sell coffee at the cyber cafe, anticipate problems with coffee getting into the equipment (I know from personal experience that Coca-Cola [TM] is fatal for a keyboard.)
• You recognize that security is an issue. Some cyber-cafes give customers access to just the keyboard and display, not the computer itself (which is on the other side of a wall or in a wooden box), but this makes it pretty hard to save to disk.
• Anticipate some key issues: what if someone wants to upload 400 megabytes of digital images as attachments to email? (The receiving server may reject it, and then the customer will be annoyed after paying you for all that time). What if someone logs in and starts broadcasting spam from your equipment? (Suddenly your IP addresses are all blacklisted!)

Cafe vs Internet vs Games

[Jon Peterson]

Hi,

I worked at in Internet cafe in 1994-5.

First off, if you are serious about the cafe bit, you've got a lot more work to do. You'll need a license to sell food and drink, you'll need hygeine certificates, someone to wash up, and a lot of money for the kitchen fittings, cappucino machine etc. etc.

So, think hard about if you want to offer 'real' food. You might find a refrigerated cabinet with cans of soft drinks and maybe sandwiches etc. is a whole lot easier.

Secondly, the computers. Different users have massively different needs. Take a look at easyeverything in the UK (http://www.easyeverything.com/). They have about 500 terminals in a single building, and they cater for people who want to use the Internet. No games, no paninni, no comfy chairs and sofas. They are open 24hrs. They are dirt cheap. (as in 1 UKPS / 2-3hrs at low demand times).

The cafe I worked in catered for the small time user - people who maybe needed their CV printed, or wanted to check flight prices, and didn't have a PC at home. Those people suck. They often need help to do stuff, they don't hang around long, and they aren't rich.

Game cafe's can work, but think about how much people are willing to pay. Is DSL common / cheap in your area? If so, many may be fine playing at home. Are there lots of kids in the area that maybe can't afford the latest games, but could afford to play a few hours at a time?

I never ran a game cafe (unless you count MUDs, and many of our best customers were kids playing MUDs). However I would guess:

1. Hardware turnover. Gamers tend to be brutal to keyboards, mice and joysticks, but they'll expect them to be in top condition. Likewise, they'll expect monitors in good condition. think about replacement costs.

2. Games eat bandwidth. 8 ppl playing half-life is a load more bandwidth than 8 ppl using hotmail.

3. The cafe I worked in stayed open till 11, and it wasn't a great part of town, either. We never had any trouble at all. Unless you are downtown in a bad area, and maybe placed very near a local kids hangout, you shouldn't have trouble.

4. Insurances costs were massive, and the insurers demanded very expensive locks / alarms to be fitted.

5. Dead time eats your profits very fast. You pay the same rent regardless of what your openning hours are.

6. Technology is the least of your worries, just keep it simple. I'd tell anyone who's thinking Linux and thin clients and anything sexy and clever to head over to the real world, then head over to easyeverything.com to see how to do it properly.

7. People will ask for printing/CD-Rom burning/Floppy access etc so decide in advance how/if you are going to offer it.

8. Don't invest anything in a small business like this that you can't afford to lose. 2/3 of small businesses fail within a year. :-)

Mail me if you want more info.

CyberCafe

[Lando]

I've set up and run a cybercafe in the past so I'll try to provide some feedback for you.

"Pure" cybercafe's do not make money on their computers. Primarily income is made on the food and drinks served at the cybercafe, with the computers are most breaking even...

Generally connection costs will eat any money that you bring in to run the computers.

Internet gaming computers can make money, but most games currently coming out have a prohibition against rental or use in a cybercafe setting. Furthermore, contacting companies to get a cybercafe license you find that there is no such license. Activision for one is a big one that does this... There is a prohibition against use in a cybercafe and contacting Activision itself you discover that Activision doesn't see a market there and has no provisions for licensing to a cybercafe... Activision is just an example, but most companies are like this.

So in general your only choice is trying to either a) operate beneath the gaming company's radar level. ie just giving the games out for use on systems. Or b) hiring a lawyer to help work around the legal issues.

Certain states in the US, treat computer software as a book. As long as you have the licenses you can have people playing the games on your systems. The state will not recognize the eula probition against rent, resale, or cybercafe's. A lawyer is needed to provide at least basic protection.

I recommend not trying to support yourself by operating beneath the radar, therefore if you want to run the cybercafe as a business venture, definately get a lawyer.

That's all I can say about legal issues.

Technical issues:
Internet connection... I feel that the internet connection is very important in a cybercafe... The ability to contact the net and play online games is important. However when you set up this type of connection understand that most firewalls that you place between your machines and the internet are going to block some access to systems... Getting IP addresses for each of your machines rather than using NAT will help this to some degree. When I first set up my cybercafe I went with a full T1 and a C block of ip addresses and did not place a firewall between the systems and the net.... When doing this though, you need to understand that your machines will be compromised/hacked and will require frequent reinstalls. Generally once or twice a week.... In order to do this I set up an inactive partition with a copy of the standard install made with norton ghost... In order to rebuild the system I made a disk that fdisked and set the partition active, installed the drive image and then fdisked the partition inactive... Took about 20 minutes, but was simple enough any of the staff could do it.

In order to keep track of your users time, you can try to do it by hand, which requires a lot of administrative overhead from your staff. Or you can go with an automated system. The one that I used at the type was Cybertime. www.cybertime.com may be the url haven't checked it in a while.... If I were doing it now, I would probably write a small website and stick it in a linux box to act as a router... When people go to log in, they have to go to the website and sign in... The linux box receives their request and rewrites the routing tables to allow access to the web. Basically only routing traffic to the box when someone is logged in...

Other technical considerations... You might want to try setting up some linux boxes, but if your doing games you basically will have to run windows.

Marketing Considerations:
I mentioned before "PURE" cybercafes do not make money the food and drinks are what make money... If you want you computers to make money you need to create a community to use the computer systems. Web browsers don't have much of a community, gamers do... As long as your computers are fairly decent, people will come in to play against and with one another and will draw in their friends..... Rather than try to launch your own cybercafe without a support group especially when you are just starting out, instead try to get your computers installed into a business that already has a fairly good customer base... My cybercafe was installed in a Warhammer gaming store, when people were not playing minitures or RPG games they would generally sit down and play on the computers for a while... I'd highly recommend installing the systems in some type of business where people come to socialize rather than trying to start your own place from scratch.

Games... Games are important.... Diablo, Starcraft and Counter-strike were the games that people came in to play the most.... Basically look for games where teamwork helps out and the games take some time to play. Running your own local servers is also a necessity, which also means that people from the net need to be able to reach those servers, see technical... Generally with 6 gaming systems I made weekly trips to the computer store and bought 2 copies of most multiplayer games... If during the first week the games did well, I would return and buy 4 more copies for the rest of the systems.

Featured games... Tuesday nights were generally slow, because of this, I made Tuesdays a free night where people could come in and just get on the systems for an hour free... If all computer were full, they either waited an hour for someone to get off or could pay, and bump one of the people playing for free.

Thursdays, while not extremely slow, I decided to make featured game night.... Where people could come in and play 1 specific game for free. If they wanted to play a different game, or wanted on a system, they could of course pay....

One other thing... Most people would not sit down to play on a computer unless someone else was already playing... Leaving 1 "free" machine all the time insures that someone will play most of the time... Which will encourage others to sit down and play. When all other computers are in use and a paying customer wants the free computer he gets it.

To paraphase: Try to establish your systems in a location that already has a community.

To increase your computer usage, try to get people involved with the games, by giving away some freebee time on specific slow nights and get your customers "hooked"... If you can get them involved you chances of becoming profitable are greatly increased.

Business Concerns:
First, if you take my marketing advice and install into a location that already is established, just offering computer use you won't have to worry about quite a few things, which will make your life easier.

First Salaries and employees... If you place yourself into an established business, it already has employees of it's own who can take money and add time to various user accounts... Basically these tasks are simple and thus minor training is necessary to get up and running... If a system has problems a reboot will generally fix the problem or at most sticking in the disk to recopy the image. For other problems, the employees can call you to come in an fix... and just stick a note on the computer that it is out of order until you can get in to fix it.

Doing this, you are going to probably have to pay the owner some type of income from the systems...

My advice is a 30/70 split... You will be shouldering all costs, such as new equipment, internet connection, new games etc. And a 30/70 split seems fair in my opinion.

Under this situation bill the owner either bi-weekly or monthly. Your user setup times should show how much time was paid for during the week.

Pricing...

First I recommend selling blocks of time in advance, don't try to get the customers to pay after they use their time and don't refund unused time...

For myself I used the following pricing scheme:
$5/hr
$20/5 hours
$20/ day pass... Basically play all day for $20 this differs from the $20/5hours in that the 5 hours are usable anytime... however the $20/day meant that customers had full access for 10 hours. most people generally paid $20 and played 3-6 hours before having to leave... It generally was not abused

$50/ Week pass Pretty good deal for those users that came in fairly regularly...

$150/Month pass

$600/Year Pass

When I originally started I charged $4/hour but had no internet connection... I was profitable after 3 months(ignoring startup costs) When I added internet I raise prices by $1 hour and it took 5 months building my customer base to the point where the internet connection was paying for itself...

Calculations for determining price of computers:

I based by price on the following calculations:

Computers should be replaced every 2 years: (Note system costs are far less now than they were a couple of years ago...)

S = System Costs $2500/ 2 = $1250/Year

The computers take up floorspace... I generally figured this as a 3'x4' aread 12 sq ft. Then determined how much the floorspace cost.

12 * $12/square foot per year = $144

Figure out how much each square foot needs to make per year. The business owner might have an actual number. I just multiplied by 5 to account for electricity, maintenance, etc.

$144 * 5 = $720/Year

Your costs, figure 2 Hours a week, service and 1 hour a week at computer store 3hours @ $30/hour * 52 weeks

3 * 30 * 52 = $4680/Year

Divide that by number of systems (5 pay + 1 free = 5)
$4680/5 = $936/year

Internet connection
$1200/mnt * 12 Months = 14400

Divided by systems
14400/5 = $2880/Year

Add up costs
$1250 System
$ 720 Floorspace
$ 936 Technical support
$2880 Internet connection

$5786/Year

Divide by your percentage .7 since you also have to pay the owner 30% of your gross for running the store and such

5786 / .7 = $8266 Year

So we have to make $8266 year just to pay for the machines

Number of estimated hours in use per week 30
number of weeks 52
30*52 = 1560 hours/year

Our price per hours ends up being
$5.29 / hour

I charged a little less since I was just guesstimating in the beginning, luckily I was close to actual costs...

In the end, I ended up closing the cafe because the owner stopped paying me. He had outside bills and was using my income in order to pay those bills...

At the end of 2 years the machines were bringing in around $800/month each which while making a profit, I was spending about $200/month in new games per each machine and thus was only making a small profit per month.

Hope that helps

Opening Times and Visitors

[ClickNMix]

One of the points mention was opening only outside normal working hours in the evenings.

However, from experience (6 years working in a cybercafe) people visiting Cyber Cafes fit into neat groups:

* Students. - Email (LOTS of Hotmail) mostly in an afternoon after college before pubs.
* Job Seekers. - Email/JobSites. Again, daytime users mostly.
* Travelers. - People all over the world keeping in touch via Hotmail mostly. They don't know the area, so are more likely to act on impulse while doing other things (Like shopping) and seeing you open. (But will revisit once they know about you)
* Kids. - Chat and trying to look at p0rn. Weekends and holidays when their parents want them out the way for a while.
* Shifty Guys Looking for P0rn. - Im not joking!
* Old People Contacting Grandchildren. - Daytime users once more. And require help more then others. But, once they get into it, if you help them. They will come back alot.

Now, this was in a (Large) town, not a city. So the dynamic might change. In London, I found they all night Cyber Cafe VERY handy when discovering Id missed the last tube and wanted to get online anyway and it was busy (Tho it was only a pound for 11pm till 7am!)