PhilFAQS

This great post was contributed by my friend Arvin Santiago.  This is Arvin’s second guest appearance, he contributed the Philippine Internet Business series earlier.  Arvin is exploring blogging for himself now, you can read his latest at: http://just4kicks.wordpress.com/

1. Competition – You start your own internet café and you’re earning good money from it. When people notice your business and see you’re progressing, they feel some kind of envy and something urges them to jump on your bandwagon. The next thing you know, 10 computer shops pop up in your area like mushrooms. From there, competition becomes tighter, sometimes it even becomes ruthless. Different promos, different gigs, different ways to attract clients’ attention. You can definitely lose because of this. As a conclusion, when there are more internet cafés near your shop that means there’s indeed a market for your products and services. However, there is also bigger the probability that the number of people going in your shop will be drastically reduced, likewise your profit.

2. Expenses – Computers evolve into something better and faster every few months, thus upgrading your shop computers is often necessary to accommodate new and exciting programs. But this is just part of your expenses, and it is even considered optional. You still have to pay regularly for your electricity, internet connection, sometimes for your rent and water bill, etc. And even though you have carefully planned everything, including the allocation of money for your expenses, for some unseen circumstances it becomes a big problem. Competition generally has something to do with this. Somewhere along the way, you’ll lose some of your clients whether you like it or not, especially when competition becomes intense. And that will greatly affect your earnings. When you start to lose clients, you start to lose money, and you’ll have a hard time paying for those expenses. Let me elaborate on that. Let’s say one of your expenses is rent. Sometimes it becomes a disadvantage when you don’t own your own place. For example, if one of your competitors sets-up his internet café in his home, that means less expense for him. He gains the advantage of running whatever promo he wants. Let’s say he sets his rates at a lower price, way lower than yours. As much as you want to compete with his rates you are unable to because you cannot afford to lower yours and still pay your rent.

3. Owner’s work attitude – Most owners, have the mindset that when you own a business you work at your own pace. This is a privilege business owners have but that doesn’t mean they can abuse it. For instance, during the first few weeks of operation of the internet café, most owners are the only ones running the show. Imagine if the owner is too lazy to open the shop on time. Your would-be clients, instead of going to your shop, will find other internet cafés that open earlier than you. The early bird catches the worm. Sooner or later you’ll take on help to man the shop. So now the owner really has control of his time. He leaves the entire shop to another person’s hand. If that’s the case then the internet cafe doesn’t need the owner anymore. This attitude often leads to disaster. You should be hands-on as much as possible. The owner should be the one responsible to watch over the business, not other people. He should be present most of the time so he can see what’s really going on and how the internet café is doing. That way he can implement changes or start promos when necessary.

4. Internet connection and other computer problems – Another beautiful day has come. And just when you ready your internet café for business, you turn on your server but alas, you can’t connect to the internet. There are times when your internet connection is down. Sometimes it’s only out a few minutes But. worse case, it takes a day…even days to return. You call your ISP’s hotline number but all they tell you is they’re upgrading their system or they’re doing some maintenance. This is one problem that you can’t do a thing about except wait. Your internet café loses income and you don’t even get any refunds from your provider. Your saving grace, rely on your off-line programs to do the job and hopefully still earn you some money. If you have no internet outage plan, you have no business plan.

Another cause of problems will be your pc’s. If one breaks, you will have to wait ‘til you find a new replacement and, therefore, won’t be able to use that computer for the meantime. Thus, profit for the day becomes less. Let’s say you only have 10 computers, and there’s a new network game you can only play 5 on 5. If one pc breaks, that means there’s also another pc that has to suffer ‘coz your clients won’t play 4 against 5. There should be an even number of players for both sides.

Lastly, problems on the software side such as viruses, spyware and key-loggers that can destroy the programs installed on your computers, even the operating system itself. These can be prevented or if you have proper program tools such as anti-virus and anti-spyware programs. But these take time and money to run and look after. The sad thing about this a is that sometimes these programs were put on your computers intentionally by other people. Many times the culprits are your neighbor computer shops … your competitors. It’s a dog-eat-dog world out there. Sadly, some just don’t know what a healthy competition is all about. They’ll do anything to destroy you for their own gain.

5. Allowing “utang” in your internet café – The concept of “pautang” is very common in the Filipino society. Being close to your clients isn’t bad, but not too close, to the extent that you’re earnings get affected. There should be limitations as to how close you should be to your clients. Outside your internet café you can be as close to them as you want, but inside the premises that shouldn’t always be the case. Sometimes you have to consider being strict when it comes to this sort of thing. Do not allow “pautang” or the “use now, pay later” scheme. Always remember that business is business, and that you’re running one. Delay of clients’ payments may also cause you delays in your payments of expenses. That is not good for the business. Payments for every product or service you sell should be received accordingly and on time so that money will always be readily available for your needs.

Related posts:

1. Real World Business — Running An Internet Cafe — Part 5
2. Real World Business — Running An Internet Cafe — Part 2
3. Real World Business — Running An Internet Cafe — Part 1
4. Real World Business — Running An Internet Cafe — Part 3
5. Real World Business — Running An Internet Cafe — Part 4

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