How to Start an Internet Cafe

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Let us be realistic. The internet is not the same as it was in the ‘90s or early ‘00s. We no longer have to hog our home’s landline to log in, and most people carry the internet around with them on their smartphones or tablets. That does not mean an internet cafe business can not be profitable, but it does need to have a unique angle because most cafes already offer free Wi-Fi. Why would people pay for something they could get somewhere else for free?

Can an Internet Cafe Business Profit?

LAN cafes, more popularly known as internet cafes, have made a comeback over the last four years, but their focus isn not on sending emails and surfing the web like it was in the early aughts. Instead, it is all about gaming. Modern LAN cafes often function as a sort of e-sports arena where gamers can come to duke it out over popular games like "Overwatch" or "Kingdom Come: Deliverance." They even host tournaments for local e-sports leagues.

Another successful angle for a modern internet cafe is marketing your business as a co-working space, which has increased in popularity as more and more people are working from home. You would charge for desk space rather than a per-hour charge for internet use.

Handle the Paperwork

When you are starting an internet cafe business (or any business), you will need to handle all the paperwork before you can actually start bringing in customers. This includes registering your business as a legal entity, obtaining a business license and getting the proper insurance, which likely includes general liability insurance and workers' compensation and disability insurance for your employees.

If you plan on selling food in your internet cafe (snacks are what make a cafe a cafe), you will have to get the appropriate permits from your local department of health. This includes a food handlers' permit and/or a food service license.

Find a Location

A cafe is all about location. You should ideally set up your business in a place that doesn’t already have other esports cafes or co-working spaces. It’s already difficult for an internet cafe business to profit, so you don’t want to put yourself up against unnecessary competition.

For a gaming-focused cafe, the best locations should be heavily populated, have a culture of gaming (like a major city with some esports leagues) and be free from major competition. For a co-working space, opt for a major city housing progressive tech startups that often offer flexible work policies or are small enough that they don’t need to rent an entire office.

Nail Down the Finances

An internet cafe business can profit, but you need the right pricing. According to Kotaku, patrons generally pay between $3 to $8 for each hour of internet use, but if your angle is a co-working space, you would typically charge a monthly fee between $175 and $400. In your business plan, factor in your costs of operation — from your employee salaries to your electric bill — to make them work within that general range.

At this point, you might need to seek an investor or look into getting a business loan if you do not have the cash to purchase the equipment needed for an internet cafe upfront.

Get the Equipment Needed for an Internet Cafe

Equipment is key when it comes to an internet cafe, especially considering that most people already have a high-speed connection at home. For a co-working space, you will likely need typical office furniture, but things get more complicated when you get into the world of e-sports. You can not really survive on cheap keyboards and basic computers, and you will need units with upgraded graphics cards and large amounts of RAM so patrons can play games that will not run on their basic home computers.

According to Kotaku, you can get computers that will do the job for around $700 to $1,100 each. Though purchasing more than 30 computers will help make your cafe an e-sports hub, you can likely find success starting with a little less.

The equipment needed for an e-sports internet cafe also includes comfy chairs (the longer players can comfortably sit, the longer they will game), mechanical keyboards, desks and the general fixings of a normal cafe if you plan to offer snacks like pastries, sandwiches, coffee and tea. You will also need to purchase software, as video games are not free.

Market and Go

No one is going to go to your internet cafe if they do not know it is open. Luckily, you are going to be marketing to people who already are on the internet. Advertise your cafe on social media platforms like Facebook and Instagram. You might also want to hit up local Reddit forums, place ads in gaming-related or professional magazines or host a grand opening event.

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Resources

About the Author

Mariel Loveland is a small business owner, content strategist and writer from New Jersey. Throughout her career, she's worked with numerous startups creating content to help small business owners bridge the gap between technology and sales. Her work has been featured in publications like Business Insider and Vice.

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