Toying With The Idea (Internet Cafe)

[Kiggs]

This is just an idea atm so just digging for info atm.

Been to Thailand many times and married to a thai woman but looking for a way/reason to move there for good once we the visas sorted.

Anyway she has worked in this industry for a good few years and I'm involved within IT,what I don't know is the costs of opening a small business over there/who to pay.

Not planning to make any money from this but as long as it pays the bills.

Anyway if anyone has done this or has fingers in pies please pm me.

Just on he phone atm on the M6 so will add more later if needed or as it comes to me.

[CharlieH]

Oh dear another one, not very original.

Need an awful lot of users at 10 baht an hour (average rural charge) x 20 computer system is 200 baht an hour and that's assuming full occupancy, which you wont ever get. If you got 50% for 4 hours a day you'd be very lucky,

which would only get you 400 baht a day x 6 days = 2400 a week, deduct running costs and capital cost equipment purchase and you'll see it doesnt really make much sense. (Imho)

[Khun Jean]

That calculation is just made from fictional numbers. Why even post that.

If i walk to my local 7-11 i pass 2 internet (game shop is a better name) and they are completely full between 16:00 and 24:00.

The location of course is good.

However even with a good many hours of use it still only peanuts what will be made.

The rents are in comparison high, the investment to buy all the systems even more so.

Then of course you need some employees because it is a very boring occupation and if your wife does it forget about having time for enjoying live.

End of the line is that you sure can pay for all the costs and even make a small profit (not enough to pay your other bills) the question should be "Is it worth it?"

The answer is NO. Not in any way. Not for the 'experience', not for solving the 'have something to do' situation, not for 'helping relatives', etc.

There are better ways to use your brain, especially if you are in IT.

[Kiggs]

Its been a good while since you went to use the internet in bangkok then? Its 30b in korat. 9pm and had to wait 30mins to use a terminal. (50terminals+)

Thanks for the informative advise though.

As I said in the op I was toying with the idea and was looking for use full information not just ill-informed banter.

Edit: jean:didn't see your post as I was replying to the first.

Its more for something to do than to make money.

Like I said as long as it pays for its self.

I would like to see I a post from someone that has done this not just the option of ppl that use them.

Thanks anyway.

Edited August 23, 2012 by Kiggs

[ssjomtien]

I'm already in this business for 8 years (www.ronsinternetcafe.net). It is always funny how people think about internetcafe only counting for internet hours (money). But it is more then that. I'm sure I make more money then an average bar in pattaya and it pays me and my family a good life. PM me if you want.

Ron

[CharlieH]

And how the H*ll do you know (khun Jean)its fictional numbers ? as a matter of fact its a very broad outline from quite a detailed study I did last for my particular area all be it awhile ago.

The OP made no mention of possible location which is why I stated "rural" in my reply. The lowest cost in this area is currently 8 baht an hour and more than half of the 27 internet shops are empty most of the day.The information given was intended as an example.

The other post that talks of making a decent living is in a main tourist area and has an Expat community so again proving location etc is everything and something the OP made no mention of.

As for the "Why post that", it is a public forum and that as stated "imho" is my opinion based on fact for my area.

Edited August 23, 2012 by CharlieH

[MANICMINER]

if you look at the internet cafes that are packed, they are packed with students playing games. And most of them are playing Playstation games. The advantage of having Playstations is you do not need to constantly upgrade to play the latest games, and hardware is the biggest expense, so i would have mostly games consoles and some computers. You also need to open in a location where there are plenty of school and university students. You can also supplement income by selling them food and drinks.

[davejones]

Oh dear another one, not very original.

Need an awful lot of users at 10 baht an hour (average rural charge) x 20 computer system is 200 baht an hour and that's assuming full occupancy, which you wont ever get. If you got 50% for 4 hours a day you'd be very lucky,

which would only get you 400 baht a day x 6 days = 2400 a week, deduct running costs and capital cost equipment purchase and you'll see it doesnt really make much sense. (Imho)

I have seen quite a few internet cafes that are completely full for hours on end. Mostly Thai kids playing games. If you're in the right area then it is possible to have 100 occupancy and people waiting to use the PCs. So ignore the people who think it can't be done. What they mean is they can't do it.

But why do you want to run a business and not make money? I've never come across anyone not looking to make money from a business. Surely you can't be so bored that you want to sit in an internet cafe all day? Why not do some voluntary work and help others out? Seems such a waste of your life to be running a full time business that doesn't make any money, just for something to do.

Edited August 24, 2012 by davejones

[p_brownstone]

If you are in any way involved in the operation of the Company - collecting money, solving Computer problems etc. you will need a Work Permit.

Also beware of using pirated Software on the machines - the local Police and the Copyright Protection people are paying much more attention to this aspect of the Internet Cafe business here, probably even more so if a Farang is in any way associated with it.

Patrick

[Kiggs]

Thanks for your posts so far,

Ron, your shops are just a few I have been into and had a little look:) I will send you a pm later if that's ok.

(If I could pick your newest shop up Ron and change its location I would be on the first flight over to talk money:) )

I have done a little more than just come up with this idea in the car sat on the motorway,it will be more towards the gaming side of things (networked ps3s,LAN party food drink bla bla bla )but don't want to go into this side of things. Its more the costs of the net/rent and who you need to sort out every mth.

I know its an odd thing to say that I don't want to make money but its a bad idea to move to anywhere and have to rely on a new venture to support your family. I do expect it to make money after the first 8mths but as I hope you understand its not good to be dependent on it.

Again thanks for all the posts and I hope the ppl with real insight carry on posting

Edit: Just to address the issues with OS licences / upgrades I will be using 2xrack mounts and setting each one as a VM. Only the top end games machines will need there own OS. In English all the people will see is a screen and a keyboard and mouse no tower. Anyway that's things for another day.

Edited August 24, 2012 by Kiggs

[padeakin]

I would imagine that the economics would be very different in a tourist area, but I do have experience of running an Internet cafe in a rural town in the North East. My wife had the business before I met her, and I helped her run it for a while, we eventually closed the Internet cafe and just rented out the shop, this is more profitable.

The main problem was that there were many other Internet cafes in the town that were only charging 10 Baht per hour, they could keep costs so low because they were using unlicensed software and were content to work many hours for a very small profit. Whereas we had to pay for software licencing (you must do this, because when the authorities find out a foreigner is involved they will check), and after a while we did not want to work so many hours for so little profit.

By the way, you still need licenses for each VM

Edited August 24, 2012 by padeakin

[Kiggs]

I'm going to be looking more central didn't want to be out in the sticks.

I know about the VMs its just to keep the costs down. I already have 3 2950s so that's going to save buying 50+ bases.

Again this is all in the very early days of planning. I don't rush into anything.

[brit1984]

I think it could work if you find a good location close to universities and high schools, focus on the gaming side of things but have a few PCs too, push the F&B sales hard (smoothies, ice cream, frozen yoghurt, etc) and run some other side businesses that will appeal to the same customer base (e.g. IT skills training, workshops on completing online applications for universities abroad, CV and cover letter writing, etc).

My biggest concern would be the capital intensity of the business and whether the payback period on your initial investment will be short enough compared to when you need to upgrade / replace the machines. You will be paying international prices to buy the kit but only charging local prices / making local profits.

Please continue to post on here as your thoughts and actions develop. Despite your modesty, you actually seem to have some knowledge of the industry and potentially an interesting angle.

Sent from iPhone; please forgive any typos or violations of forum rules

[Kiggs]

Brit: thanks for the informative post and the vote.

My small saving grace is that I have 50% off all the gear needed ,rack mount severs/switches cables and all the rest of the junk the down side it is with me in the UK, thinking I can ship as spare parts to avoid the or at least try and avoid the duty. I think that will be the turning point because they are the biggest outlay as they are over 1000gbp each the same kit over there will break the bank.

As for the shop its self it will just be kitting it all out as a cafe/bar (without the dancing girls) nice decor music bla bla someplace that and this will be my target audience kids and farang want to go.

Still just an idea atm, I think I will use the property I have found near asok bts as a benchmark and try and get some real life costing of fiber/tv/food and drink. Once I have do that I can then work out what kindof time frame I can expect to see some return.

O forget to say I can also get my hands on a 7miles 360° wifi transmitter but that a for another thread

Everyone wants to play games and emails to there phones:)

[Khun Jean]

Just keep in mind that when it is successful another will be opened right next to you within 6-12 months.

See that happen everywhere.

I had my internetcafe on Samui long time ago. Most money was made with selling drinks especially our smoothies, internet was then 30 baht an hour.

After six months two other internet shops opened, Turnover went down 60%, meaning we just had to share the same amount of customers among three shops instead of first only mine.

After 12 months another opened and the same thing happened, Turnover went down again and it was close to 25% of what we got first.

A pretty good indication that in a tourist area people are not really 'picky' and you really have to share your customers. What can be doen to keep or get more customers, enough computers, good chairs, screens, keyboards and desk, tried everything but it just came down to a place to check your email and chat/play game. Making a difference is difficult in this kind of business.

In low season we closed one month. In that month almost all equipment was stolen, through the roof, as the front and rear entrances were very good protected.

After that, considering only 25% of the turnover was left for the next season we sold the lease to a pharmacy. They lasted 6 months because another pharmacy opened across the street and somehow had cheaper prices or something else.....

Now many years later i learned to not go after the crumbs, leave those to the Thai who unfortunately only seem able to copy, not lead.

Went to do something completely different in Thailand (Realestate for renting out) and that was/is much much better.

I am a developer/technician/entrepeneur since i was 21. It seemed a good idea at the time because having the internetshop and doing my normal development work in the 'office' were a good match. Until the internetcafe started to demand more and more time, because frankly if you leave anything to a Thai, constant supervision is necessary. When it gets to 7 days a week. you get tired from it, because time seems to be slipping away faster and faster.

Now older and hopefully wiser my conclusion is that free time is the most important, the money was not recovered because of the theft but it was not a large amount to begin with anyway. Doing business now is just a few hours per week.

If i think back i consider it a good lesson learned. Patience is the most important. Difficult if you are entrepeneurial. You need the time to get used to this country and know about its good and bad things. Thais are really not good employees, with that i mean the lower paid ones (<20.000) because those are the ones you would employ when having an internetshop. Employee turnover is fast and many have very long toes for western 'ideas'. They say yes, but do nothing.

Anyway, if you do your research and find a good location you can make it profitable, but it will remain crumbs compared to other things you could do.

To add some real numbers, here is a current add with sunbelt (i know this area and it is busy):

Located in the busy Preedeepanomyong area on Sukhumvit 71 this internet café has 23 computers full set up. The business was established this year and has a 3 year lease remaining. The rent is 15,000 Baht per month and there are 2 full time employees with wages totaling 15,000 Baht.

The Internet café is open 24 hours a day and sees monthly sales between 90,000 to 120,000 Baht a month with a profit of 40,000 Baht per month.

The owner wishes to cash out on the business as he hopes to invest elsewhere.

ASKING PRICE: 850,000 Baht

Edited August 24, 2012 by Khun Jean

[CHRISTIANa9]

To add some real numbers, here is a current add with sunbelt (i know this area and it is busy):

Located in the busy Preedeepanomyong area on Sukhumvit 71 this internet café has 23 computers full set up. The business was established this year and has a 3 year lease remaining. The rent is 15,000 Baht per month and there are 2 full time employees with wages totaling 15,000 Baht.

The Internet café is open 24 hours a day and sees monthly sales between 90,000 to 120,000 Baht a month with a profit of 40,000 Baht per month.

The owner wishes to cash out on the business as he hopes to invest elsewhere.

ASKING PRICE: 850,000 Baht

Selling at P/E of 21.

[JaiLai]

Just keep in mind that when it is successful another will be opened right next to you within 6-12 months.

See that happen everywhere.

I had my internetcafe on Samui long time ago. Most money was made with selling drinks especially our smoothies, internet was then 30 baht an hour.

After six months two other internet shops opened, Turnover went down 60%, meaning we just had to share the same amount of customers among three shops instead of first only mine.

After 12 months another opened and the same thing happened, Turnover went down again and it was close to 25% of what we got first.

A pretty good indication that in a tourist area people are not really 'picky' and you really have to share your customers. What can be doen to keep or get more customers, enough computers, good chairs, screens, keyboards and desk, tried everything but it just came down to a place to check your email and chat/play game. Making a difference is difficult in this kind of business.

In low season we closed one month. In that month almost all equipment was stolen, through the roof, as the front and rear entrances were very good protected.

After that, considering only 25% of the turnover was left for the next season we sold the lease to a pharmacy. They lasted 6 months because another pharmacy opened across the street and somehow had cheaper prices or something else.....

Now many years later i learned to not go after the crumbs, leave those to the Thai who unfortunately only seem able to copy, not lead.

Went to do something completely different in Thailand (Realestate for renting out) and that was/is much much better.

I am a developer/technician/entrepeneur since i was 21. It seemed a good idea at the time because having the internetshop and doing my normal development work in the 'office' were a good match. Until the internetcafe started to demand more and more time, because frankly if you leave anything to a Thai, constant supervision is necessary. When it gets to 7 days a week. you get tired from it, because time seems to be slipping away faster and faster.

Now older and hopefully wiser my conclusion is that free time is the most important, the money was not recovered because of the theft but it was not a large amount to begin with anyway. Doing business now is just a few hours per week.

If i think back i consider it a good lesson learned. Patience is the most important. Difficult if you are entrepeneurial. You need the time to get used to this country and know about its good and bad things. Thais are really not good employees, with that i mean the lower paid ones (<20.000) because those are the ones you would employ when having an internetshop. Employee turnover is fast and many have very long toes for western 'ideas'. They say yes, but do nothing.

Anyway, if you do your research and find a good location you can make it profitable, but it will remain crumbs compared to other things you could do.

To add some real numbers, here is a current add with sunbelt (i know this area and it is busy):

Located in the busy Preedeepanomyong area on Sukhumvit 71 this internet café has 23 computers full set up. The business was established this year and has a 3 year lease remaining. The rent is 15,000 Baht per month and there are 2 full time employees with wages totaling 15,000 Baht.

The Internet café is open 24 hours a day and sees monthly sales between 90,000 to 120,000 Baht a month with a profit of 40,000 Baht per month.

The owner wishes to cash out on the business as he hopes to invest elsewhere.

ASKING PRICE: 850,000 Baht

This is so true about opening up a business ( of any description ) and within 6 months a bunch more open next door / on the same street / round the corner. Thais are happy to make very small profits, internet cafes are great for them coz they can sit on their touche all day!

[brit1984]

To add some real numbers, here is a current add with sunbelt (i know this area and it is busy):

Located in the busy Preedeepanomyong area on Sukhumvit 71 this internet café has 23 computers full set up. The business was established this year and has a 3 year lease remaining. The rent is 15,000 Baht per month and there are 2 full time employees with wages totaling 15,000 Baht.

The Internet café is open 24 hours a day and sees monthly sales between 90,000 to 120,000 Baht a month with a profit of 40,000 Baht per month.

The owner wishes to cash out on the business as he hopes to invest elsewhere.

ASKING PRICE: 850,000 Baht

Selling at P/E of 21.

...and with exit in year 1... could be a juicy IRR

Sent from iPhone; please forgive any typos or violations of forum rules

[brit1984]

I am surprised the more established businesses in Thailand don't use more discounts / promotions to discourage new entrants.

In the UK, incumbents often protect market share with predatory pricing, as the laws against it are not strictly enforced (not for SMEs anyway).

Does anyone know if they have strict laws against predatory pricing in Thailand?

Sent from iPhone; please forgive any typos or violations of forum rules

Edited August 25, 2012 by brit1984

[Kiggs]

Thanks for all the input its a good heads up.

Some posts have put me off a little but I will carry-on a little more,nothing lost yet so will try and find a good location and work from there.

Don't think I would ever buy a running business as I always think "why are they selling" plus like I have said before I have the biggest outlay already.

Thanks again and please keep the posts coming we can never know enough.

[chainarong]

You've got some good positive feed back, which is fine, that's democracy, i will take the negative view and suggest you think about it for 3 years, then think about it for another 10 years, Sorry .

[MANICMINER]

What you are doing is not unique and, as others have said, you will be copied if successful. There is a very good chance that someone copying you will have multiple businesses, and can afford to operate at a loss just to put you out of business. Unless you have very deep pockets, or an alternative income, i would come up with a more original idea.

[Kiggs]

Has anyone taken notice of how much the kids are paying per hour on PS3 and Xbox. Not in the city . I can't seem to find anyone doing this in our area and just curious about the going rate. Internet cafes in the area are 30b /hour so don't need that info ta.

[jamescollister]

The gaming thing, some what different from the internet part. With the Government roll out of tablets to school kids, out here in the boonies. Kids go to the school grounds which have WiFi, even the local primary school has WiFi.

I never use an internet cafe. rather sit in a coffee shop with a lap top or I pad with free WiFi.

Also think there is a law about school kids playing games in internet cafes during school hours.

Know a Thai guy with 100 computers who makes a good living, but he has a degree in computer science and maintains other people computers in the back of the shop.

Not saying it can't be done, but most I have seen try, fail. Jim

[Kiggs]

Ye I have seen and been told about the problems,I also have an extensive IT background also to add a premises so no rent to be paid. Anyway just wanting to find the going rate for game play

[yoshiwara]

Many years ago, some people rented out use of mobile phones on street corners. Now most have their own phone.

Now, in LOS, a similar situation applies to internet shops where more and more people have either phones directly linked to the internet or laptops/pads linked up with dongles etc.

The marketing opportunity for opening an internet shop will likely contract. It will not disappear, but more of a grind than a money spinner.

[Kiggs]

Many years ago, some people rented out use of mobile phones on street corners. Now most have their own phone.

Now, in LOS, a similar situation applies to internet shops where more and more people have either phones directly linked to the internet or laptops/pads linked up with dongles etc.

The marketing opportunity for opening an internet shop will likely contract. It will not disappear, but more of a grind than a money spinner.

Thats 100%.

Its not just the sale of computer time thats going to pay the bills. I have estimated that internet sale time will only provide 5% of my total income (10 if im lucky)

[jackinbkk]

My opinion would be that post #2 was correct. While you can make additional revenue from sales of drinks, printing and phone calls etc. the internet side looks like a loss maker. I pay 10 baht an hour in Bang khae. So a single computer in use 24 hours a day, 7 days a week is generating 1,680 baht. 6,720 baht a month. You can add more machines but there's more work and infrastructure involved. Power, cabling, management, tables and chairs, internet bandwidth. Deduct costs, rent and wages from that and you wont have much left. The shop side might work. Ditch the internet cafe part. I don't know what the costs would be to have x playstations with x copies of legal games. My guess is most shops aren't operating legally. It only takes an envious observer to send the bib round to clear you out even if you make some good money.

[Trembly]

I am surprised the more established businesses in Thailand don't use more discounts / promotions to discourage new entrants.

In the UK, incumbents often protect market share with predatory pricing, as the laws against it are not strictly enforced (not for SMEs anyway).

Does anyone know if they have strict laws against predatory pricing in Thailand?

Sent from iPhone; please forgive any typos or violations of forum rules

I'm happy to be corrected but from what I've casually observed in all my time here the authorities pay little or no attention to pricing in the retail market.

Edited September 26, 2012 by Trembly

[yoshiwara]

Re pricing one place I used charged 1000 baht for 50 hours.

Re drinks/snacks we just purchased that from the local 7/11 or Family Mart.The shop was useful for printing stuff and making phone calls but that service dropping off.

Trade significantly dropping the last 2 years.