How to Start an Internet Cafe (from Concept to Launch)

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Learn what it takes to get funding, customers, & sweet success
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Interested in starting your own internet café? Access to the internet is more essential than ever, so it's a smart idea to use that demand as your business. Business travelers, people without their own computers, and tourists are all in need of computer and internet access away from home. In this article, we'll walk you through everything you need to know about setting up an internet café with business and marketing advice from business advisor Madison Boehm and marketing expert Travis Peters!

How to Set Up a Cyber Cafe

  1. Create a concept and a name, establish a business structure, and create a business plan.
  2. Find investment capital through investment partners or loans.
  3. Find a good location with lots of foot traffic by your desired clientele.
  4. Obtain your business permits and licenses .
  5. Set up the internet café with equipment, furniture, lighting, etc.
  6. Market your café , hire staff , and operate the café with customer satisfaction in mind.
Section 1 of 10:

Planning Your Internet Café

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  1. Write down the amenities and services you want to offer and the audience you want to cater to. Build a vision board on Pinterest or hire a concept designer to draw or render images of how you want it to look. Visit other Internet cafés in your area and other cities to help form your ideas.
    • Speak with the owners of other Internet cafés and ask about the advantages and disadvantages of this type of business.
  2. 2
    Perform market research. Investigate the city or neighborhood where you hope to open your café to find out what the market is like. Look specifically at the demand for an Internet café, but also pay attention to the number of people who frequent the area; economic indicators like income and employment rate; the number of existing competitors; and how much the locals are used to paying for those competitors' services. [1]
    • For example, setting up your café near a college is a good idea because college students frequently go to internet cafés and coffee shops to study. Even if you have a lot of competitors, you can still make your business a success because of the high demand and the stable market size.
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  3. Create a unique business name that resonates with customers and sets you apart from other, similar establishments. Search databases such as the Better Business Bureau (BBB) for your name ideas so you don't choose one that's already taken.
    • Business advisor Madison Boehm says choosing a name is one of the 3 most important things every business owner should prioritize. The other two things are financing (especially understanding how tax laws work in your state) and establishing a business structure (i.e., an LLC or a sole proprietorship).
    • At the same time, don't spend too long choosing a name! According to marketing expert Travis Peters, "Brand is much more important than name. Focus on the brand and/or culture you want to build and the name will follow."
  4. 4
    Set up your internet café's business structure. To start a business in the United States, you must choose a structure that will dictate how taxes are paid and whether or not the owners are liable for any debts or costs they accrue. The most popular options for small cafés are the sole proprietorship or the Limited Liability Company (LLC) . [2]
    • Sole proprietorships are easier and quicker to set up and manage for taxes, but they don't offer any liability protection to the owner. In other words, the owner's personal assets are considered the same as their business assets in the eyes of the law, which means they can be seized if the owner fails to pay their business debts.
    • LLCs take longer to register and the taxes are a bit more complex, but the upside is they protect the owners' personal assets from liability.
    • To start a sole proprietorship, you may not need to file any paperwork. Check with your local county clerk's office to make sure. An LLC, on the other hand, requires several legal documents, including Articles of Confederation, an Operating Agreement, and an Employee Identification Number (EIN) for taxes. Contact the county clerk when you're ready to get started.
  5. A Doing Business As (DBA) is an assumed name that's sometimes (but not always) required whenever you're transacting using your business name instead of your own. Even if your local government doesn't require it, it's a good idea to get one. For example, let's say you need to buy disposable coffee cups and lids for your Internet café. If you use a credit or debit card under your DBA name (i.e., the Internet café name), you're effectively keeping your business and personal finances separate. That makes them easier to keep track of for sales and tax purposes. [3]
    • Register your DBA name through your local state government or county clerk's office.
  6. 6
    Create a comprehensive business plan. Include every detail for your Internet café from computers that you will need to purchase to long-term operational costs. Incorporate the results from your previous market research and explain how your café will stay profitable over time. Your business plan should include the following elements: [4]
    • Executive summary : An executive summary is a brief overview of your business plan. Use it to touch on every part of your plan, from the company description to your market research findings to your funding request and financial projections. Think of it as investors' and lenders' first introduction to your internet café, and try to make a good impression.
    • Company description : The focus here is on describing your business, the strengths of your concept, and why you believe it will make a profit.
    • Market research : Market research is critical, as it describes the volatility of the market you're entering (i.e., whether it's profitable). Identify your major competitors as well as your target market and their wants and needs which your café will answer.
    • Organization & management : This section will describe what type of organization the café is (e.g., an LLC or a sole proprietorship) and whom you've selected to help you run your business, from bookkeeping to staff management.
    • Services & products: This portion of your business plan lays out the services you intend to offer and the products you want to sell.
    • Marketing plan : The marketing plan should describe how you plan on addressing the needs of your market, how you will communicate with customers, and how you will advertise your café.
    • Funding request : The funding request outlines how much funding (i.e., money) you need to finance your business for the next 5 years. It should include staff salaries and estimated equipment costs. You should also specify what type of funding you're looking for, whether that's investment capital or a business loan.
    • Financial projections : This section describes how you believe your Internet café can generate revenue over the next 5 years. Forecast your budget and income statements, so that investors or lenders have a more concrete idea of your business's ability to succeed.
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Section 2 of 10:

Finding Investment Capital

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  1. Using the funding request from your business plan, determine your projected annual expenses and gross income. You'll need to have enough capital to cover both your start-up and operating expenses. If you do not, you will need to take out a loan. [5]
    • Operating expenses include licenses, permits, insurance, rent or mortgage, a security system, employees' salaries, computer equipment and software, and professional services such as an accountant or bookkeeper.
    • You can lease equipment or purchase used equipment to save money on operating costs.
  2. 2
    Look for investment money. This could be from your own savings, an investment partner, or a bank. Keep in mind that partners and banks usually expect a return on their investment; they don't just give you the money for free. They'll want to see your business plan and be completely sold on your Internet café before they agree to get involved.
  3. If you meet their eligibility requirements, apply for the SBA loan at a local bank or credit union. This type of loan guarantees repayment by the SBA if you default. [6]
  4. 4
    Consider micro-lending if you only need a small loan. Internet micro-lending services (also called peer-to-peer lending) help borrowers find lenders for relatively small loans, usually under $50,000. These are helpful if you need extra money to buy equipment and set up your business licenses and permits. [7] Popular micro-lending sites include Kiva , Prosper , and Lending Club .
  5. Find a bank that will give you a home equity loan or line of credit. You would be using your home as collateral, i.e., a type of security the lender can use to get their money back if you don't pay them. It's important to pay the loan back on time, or you'll risk losing your home. Most lenders will only let you collateralize up to 80% of your home's value. [8]
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Section 3 of 10:

Finding a Good Location

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  1. Look for a place that is likely to attract repeat as well as casual customers. Locating near a school or college may attract younger customers, or if you locate near other food cafés or small shops you might be able to catch pedestrians in the area. It could also be advantageous to locate near large hotels where many business travelers stay.
    • When you find a potential location, observe the area for a few hours and analyze the foot traffic in the neighborhood. Is it near public transportation or highways? Is there enough parking? Consider how easily your customers can reach your café, no matter which direction they're coming from. [9]
  2. 2
    Work with a commercial real estate agent. An agent experienced in commercial businesses will be able to show you properties that meet your needs and are available for lease within your budget. You could also contact the commercial real estate development company that owns a specific property that interests you.
    • A good alternative would be to take over an existing Internet café that has a loyal client base. A commercial real estate broker will know about these opportunities as well.
  3. Once you find a location and purchase or rent it, buy general liability insurance to protect you against financial loss if anyone is injured on your property or tries to sue you for any reason. It's also a good idea to buy commercial property insurance, which will cover you if your café catches on fire or is damaged in a storm. [10]
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Section 4 of 10:

Obtaining the Necessary Licenses and Permits

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  1. Check with your local municipality for the types of permits required for building a new storefront or renovating an existing property. Get a legal adviser if you don't know how to fill out the forms—better to pay small costs upfront and have peace of mind than to have expensive complications down the road. [11]
  2. 2
    Apply for a sales tax permit. This is a permit allowing you to collect sales tax from customers by selling them your services. You can get it from your state's Department of Revenue or Tax Commission. Once you have it and start your business, keep careful records of which items you sold for what amounts and how much you collected in sales tax. [12]
    • Sales tax varies by state and jurisdiction. For example, in Texas the state sales tax is 6.25%, but many cities and counties impose an extra 2% for a total of 8.25%. [13] In California, the state tax is 7.25%, but it can go as high as 9.25% in some districts. [14]
  3. Each state and county government in the US has its own regulations for businesses preparing and selling food and beverages. For example, you'll probably have to obtain food handler's permits for all your employees to certify they've been trained to handle food safely. You may also need a food service license to show that you're properly storing and preparing all your menu items and following all the local and state health and safety regulations.
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Section 5 of 10:

Setting Up the Internet Cafe

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  1. If possible, work with a professional designer who understands the special requirements of an Internet café, such as keeping food and beverage preparation areas separate from computer equipment. Include an electrician in the design process to ensure that the infrastructure can handle the load of all the electronic devices in your café.
  2. 2
    Purchase supplies and equipment. Following your business plan, purchase desks, chairs, tables, computers, hotspots, network cables, routers, printers, crimping tools, and RJ-45 jacks. You should also buy food and beverage preparation items and appliances such as cups, plates, espresso machines, and microwave ovens (if you plan on serving food).
  3. Your café's Internet connection will most likely need a higher grade, more robust connection than a normal household setup. Negotiate with the ISP as they may offer special deals for businesses, especially Internet cafés. You also might want to determine if you need a "static IP" address for Local Area Network (LAN) services and or programs.
    • A static IP address is for one customer only. A dynamic IP address will provide a different IP address each time you log on to your computer. Having a dynamic IP address means that you're sharing an IP address with several other customers. [15]
  4. 4
    Set up software management and cybersecurity systems. With dozens of strangers all using the same internet connection comes an increased risk of cyber attacks – both on your café's devices and on your customers'. Get ahead of the danger by installing a firewall on your network to protect it from worms and viruses. [16] It's also a good idea to implement a kill switch software which your or an IT professional can use to shut down all the computers in the building when there's a threat. https://www.business.com/insurance/cyber-risk/
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Section 6 of 10:

Marketing Your Internet Cafe

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  1. To promote , distribute fliers and business cards to passersby or ask local libraries and coffee shops to display them. Hold a grand opening with door prizes or discount coupons. Advertise the opening in newspapers, radio stations, and on your website. You can also hire or partner with local entertainment, food trucks, and other small business owners to build community trust.
  2. 2
    Promote the café on social media. Open accounts for your Internet café on Facebook, Instagram, and TikTok and post new, engaging content daily. When it comes to generating engagement, Peters suggests being as authentic and consistent as possible. Then, he says, "...followers and engagement will happen organically."
    • Peters also suggests avoiding "force creating" content you think your audience wants to see. Instead, he says, "Pay attention to your engagement and once something clicks between you and your audience, focus on making more of that type of content."
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Section 7 of 10:

Managing the Staff

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  1. Boehm recommends treating your management plan like an employee handbook and writing down all the procedures, steps, and rules you want you and your staff to follow. Think of it like building a step-by-step guide for someone who has no idea how your business works.
    • Boehm also suggests hiring people who are good at aspects of business you're not (like bookkeeping or staff management). "[Y]ou're not perfect and no one is," she says, and it's important to "realize where your faults are and… either delegate it or to hire someone else to… improve that situation."
  2. 2
    Decide on the number of staff and their wages and working hours. You'll probably already have these numbers, as they should have been part of your funding request. This is also the perfect time to research state and federal labor laws to make sure you're compliant. For example, you must pay your café employees minimum wage, which is $7.25/hr. [17]
  3. Place ads online on job board websites like Google Jobs , Indeed , GlassDoor , or Monster . Choose applicants who aren't just technically savvy and come with good references, but are also friendly and easy to work with. Run a background check on each potential employee before hiring. [18]
    • Review the Federal Trade Commission's (FTC) rules about running background checks and make sure you're compliant. For example, you must get the applicant's consent, and you must also use an FCRA-compliant background check service. [19]
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Section 8 of 10:

Operating the Internet Cafe

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  1. They may want more bandwidth or complain about the amount of performance-degrading spyware on your computers. You can contract with an information technology (IT) expert to solve software problems, if you don't already have an IT administrator on staff.
  2. 2
    Evaluate opportunities to expand your business. This could include color printing and copying or hosting computer game competitions. Survey customers about services and amenities they want to have to determine if the demand in your area is worth the setup and maintenance costs.
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Section 9 of 10:

Takeaways

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  1. Your dream of opening an internet café starts with a concept. Once you have a vision, a name, and a business structure, it's time to create an actionable business plan to show potential investors. The plan should include a description of your café, market research, a funding request, and other important elements that will give investors and lenders confidence in your idea. After you get funding, you can finally start making your café a real, safe, and welcoming place for people to access the web.
Section 10 of 10:

Frequently Asked Questions (FAQs)

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  1. 1
    How do I start a cyber café? Begin by creating a concept and choosing a name. Then perform market research to find out if there's a demand for one in your desired location. If there is, choose a business structure and then develop a business plan to take to potential investors and lenders. Once you have funding, you can find a property, obtain all the necessary permits and licenses, renovate, hire staff, and get ready to market and open your café.
  2. 2
    Is an internet café profitable? It's possible for an internet café to be profitable if you set it up in an area where there's a high demand for a safe space to access the internet. That's why performing market research before setting up your business and asking for funding is critical to your success.
  3. 3
    How do internet cafés work? At internet cafés, customers pay a small fee to access the café's computers and internet connection for a certain number of hours (or all day). They can also purchase food and beverages, so they can theoretically stay there for the entire time it's open!
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Community Q&A

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  • Question
    If I want to make my own internet cafe, what do I need to start and how much will it cost?
    Community Answer
    You need a software to run the internet user time limit, a number of PCs, a central internet server, a router, network cables, an Internet Service Provider (ISP), the chairs, workstation tables, a suitable place to do the business, legal licensing and of course labor. For the money, it depends on which country are you doing that business in.
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  • Question
    What training should I provide for staff of an internet cafe?
    Community Answer
    There are two important components here: the café side and the internet side. Since the internet side is pretty much set-up-and-go, the majority of your staff's time will be spent making drinks and snacks and serving customers. You should make sure they can run the point of sale system, can follow the directions to make the drinks and pastries you're serving, and can deal with customers. For the internet side, a basic troubleshooting knowledge will be fine. Make sure the staff know how to turn on and use the computers and who to call if there is something they can't fix. Most 20-somethings will already have some tech skills.
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  • Question
    What is the ideal number of computers for running a PC shop?
    Community Answer
    10 or so computers would be the optimal number to start with.
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      Things You'll Need

      • Computers (high-quality devices with monitors, mouse devices, & keyboards)
      • Software (Operating systems, productivity software, & gaming software)
      • Networking equipment (routers, switches, cabling)
      • Uninterruptible power supply (UPS) units to protect computers from power surges
      • Desks and chairs
      • Light fixtures
      • Phone and laptop charging stations

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      References

      1. ↑ https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis
      2. ↑ https://www.uschamber.com/co/start/strategy/sole-proprietorship-vs-llc
      3. ↑ https://www.sba.gov/business-guide/launch-your-business/choose-your-business-name
      4. ↑ https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan
      5. ↑ https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs
      6. ↑ https://www.sba.gov/funding-programs/loans
      7. ↑ https://www.sba.gov/funding-programs/loans/microloans
      8. ↑ https://consumer.ftc.gov/articles/home-equity-loans-and-home-equity-lines-credit
      9. ↑ https://www.entrepreneur.com/article/73784
      1. ↑ https://www.sba.gov/business-guide/launch-your-business/get-business-insurance
      2. ↑ https://www.indeed.com/career-advice/finding-a-job/lawyer-in-business
      3. ↑ https://tax.thomsonreuters.com/blog/what-is-sales-tax/
      4. ↑ https://comptroller.texas.gov/taxes/sales/faq/local.php
      5. ↑ https://www.cdtfa.ca.gov/taxes-and-fees/sales-use-tax-rates.htm
      6. ↑ https://whatismyipaddress.com/dynamic-static
      7. ↑ https://www.cisco.com/c/en/us/solutions/small-business/resource-center/security/how-to-setup-a-firewall.html
      8. ↑ https://www.dol.gov/general/topic/wages/minimumwage
      9. ↑ https://www.inc.com/john-treace/recruiting-hiring-4-rules-right-person.html
      10. ↑ https://www.ftc.gov/system/files/documents/plain-language/pdf-0142-background-checks-what-employers-need-know.pdf

      About This Article

      Article Summary X

      To set up an internet cafe, start by renting out a space for your cafe that's near potential customers, like a spot next to a college or a hotel. Then, buy all of the necessary equipment for your cafe, including computers, routers, and printers. You'll also need to find an internet service provider so customers using your computers can access the internet. Before you open your cafe, register with your local government and hire employees to help you run things. To learn how to promote your internet cafe, scroll down!

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