Cyber-Café Business Plan Template

Are you planning to open an internet café ?

Internet penetration across the globe has grown exponentially and everyone these days relies on a stable internet access for both work and play. Even though the latest technologies including mobile technology is widely used across the world, there is still a high demand for good quality internet cafes offering superior quality service. People want to walk into a professionally managed facility with fast-speed internet infrastructure.

For a cyber café business to succeed, the first step is to have a well-structured business plan that will guide the entire process of business set-up. Before embarking on a starting a cyber café, you need to have a well-laid out business plan that will effectively take care of all issues that need your attention.

In case you aren’t sure of how to come up with a professional business planning for your cyber café company, here is a detailed sample plan written for an upcoming cyber cafe, YellowNet in Manhattan.

Executive Summary

The Cyber Café Business

2.1 The Business

YellowNet Cyber Café will be located on Street X in downtown Manhattan which is an busy area with a lot of activity. The neighborhood was selected because it is the heart of business, leisure and entertainment activities. With a number of world famous landmarks within the vicinity, it is the perfect place to open internet café business. The café is situated within one of the world’s busiest Central Business Districts. The internet café will be situated in close proximity to world renowned landmarks such as The Metropolitan Museum of Art, Central Park, Empire State Building and One World Observatory among others. The location was selected to serve city dwellers as well as visitors and tourists.

YellowNet will be run by Michael Thicke and his wife. Michael has extensive experience working for various Internet Service Provider companies while his wife has worked with various business management consultancy firms. With experience in the internet service provision and business consultancy, the couple is well versed with intricate details of how to open an internet café and successfully run it. Michael knows too well he has to be innovative and think outside the box to offer a unique and exemplary service that meets the demands of his customers. Michael will be in charge of the day-to-day running of the cyber café business. He has studied other similar business models to craft a winning strategy for starting an internet café.

2.2 Objectives

YellowNet Cyber Café has set up its objectives it intends to achieve the following in the first three years of operation. The objectives have been summarized as follows:

• Creation of a cozy, unique and quiet environment different from other competitors where customers can comfortably enjoy services.
• Make the community aware on what services the cyber café offers.
• Ensure the environment is conducive and can accommodate people with diverse beliefs, cultures and backgrounds.
• Provide great coffee and sumptuous bakery items at affordable prices.

2.3 Keys to Success

YellowNet Cyber Café has set up its objectives it intends to achieve the following in the first three years of operation. The objectives have been summarized as follows:

• Creation of a cozy, unique and quiet environment different from other competitors where customers can comfortably enjoy services.
• Make the community aware on what services the cyber café offers.
• Ensure the environment is conducive and can accommodate people with diverse beliefs, cultures and backgrounds.
• Provide great coffee and sumptuous bakery items at affordable prices.

2.4 Risks

The following risks have been identified with starting YellowNet:

• Is YellowNet in Manhattan providing services which are in demand?
• Will internet craze continue to become popular in order to support the café’s growth?
• Will customers be willing to part with their money for YellowNet’s services?
• Will the cost of home internet drop so significantly that YellowNet will no longer find customers interested in Internet café services?
• Will access of internet via mobile platforms become so popular that customers will prefer to instead use their mobile gadgets to access the internet?

2.5 Company Targets and Forecasts

Michael’s target is to become the best internet café in New York and be a trendsetter by providing a unique, highly-customized and professional service. Michael has forecasted a 15% market share and calculated an average gross and net profit margin expected in the next three years. He strongly believes in his business model which will gradually begin with lower net margins, but pick up to bring in a good net profit margin in the second and third year.

Company Summary

3.1 Who is the Owner?

• YellowNet is owned and operated by Michael Thicke.
•  He has vast experience in the internet service provision industry spanning a total of 12 years.
• Throughout his life, Michael has worked for various internet service providers, and therefore thoroughly understands how the industry works.
• Michael is a graduated with a degree in Information Technology from Pace University in New York, He also holds an MBA from Columbia Business School.
• Working in the technology division, Michael was instrumental in the SME technical support division.
• During the course of his career, he helped several local small businesses successfully set up their internet infrastructure.
• He rose through the ranks and served as an IT Manager in the various companies that he worked for.

3.2 Why did he start his business?

• Having been in the industry for long, Mike knew how to start a internet café.
• Despite increase in domestic internet use, he knew there was still a demand for cyber cafes especially in densely populated areas of the city.
• He had seen how other cyber cafes operated and seen the loopholes he could exploit to offer a unique and customized service.
• There was need to offer a great internet facility where residents, visitors and tourists could access high-speed internet services in NYC City.
• Online gaming inspired Michael to think about starting a gaming café where he could provide a cozy environment for customers looking to have fun online.

3.3 How the business will be started

The total startup cost for YellowNet will be drawn for Mike’s personal savings which he has accumulated during his career life. However, there is a funding shortfall which will be covered by a loan.

The proposed site for the business will be on 3rd avenue Manhattan and will be leased for an initial period of 2 years from June 2018 with an option to extend. Reasons for choosing 3 rd avenue include;

• Proximity to a large downtown business community
• Close to major tourist attractions frequented by many tourists
• Availability of sufficient parking
• Reasonable rent rates compared to other areas of the city
• Premises is strategically located and highly visible

Even though Michael has been in the internet service provision industry, he plans to hire five additional staff to help in running the internet café.

Services for Customers

YellowNet will be a professionally managed and equipped with the latest cutting edge technologies to meet the demands of clients. In a bid to stand out as a unique and modern establishment, the business intends to go an extra mile and cultivate strong relationships with its customers. The intention of offering a wide variety of services under one roof is to offer clients the best value for money, and at the same time make profits in accordance to the law,

The quality of service is expected to be exemplary right from accessing the internet to general customer service etiquette. The target is to ensure customers enjoy themselves while at the facility and look forward to coming back again.

Products and services to be offered at YellowNet include:

• Offer fast and secure internet browsing services
• Help clients access reliable and affordable international internet calls
• Avail the required hardware and software to facilitate video teleconference services
• Provision of document printing and scanning services
• Offer highly sophisticated infrastructure for computer gaming
• Sale of call cards and internet bundles from various service providers
• Offer caffeine, snacks and various types of soft drinks
• Provide consultancy and advice in internet related services

YellowNet has invested heavily in a wide array of internet applications. As part of internet café business introduction strategy, the establishment intends to harness the latest technologies to ensure the business is fully technology compliant.

With the realization that many people are increasingly becoming keen on online gaming, Michael is keen on branding his business as a computer game café with the best gaming applications you cannot find anywhere else.

In future, YellowNet intends to establish a small internet training center that will offer learners a chance to be trained by experts on how to effectively use the internet.

Marketing Analysis of Cyber Café Business

Comprehensive cyber cafe business plans always offer a detailed analysis of the target market. YellowNet is expected to operate in a highly profitable environment that will allow the business be a trendsetter in the cyber-café industry. With a growing number of people embracing the coffee culture and more people looking for fast internet facilities, the business caters for both groups. This is no doubt an excellent concept that is poised for success. This internet café business model is a combination of two related businesses under one roof.

5.1 Target Market Segment

YellowNet intends to offer people looking for somewhere quiet, comfortable and cozy to browse the internet. The establishment admits both experienced internet users as well as novices willing to gain knowledge on utilizing the internet. YellowNet’s customers can be divided into two broad categories. The business is targeting an age group of between 18 to 60 years and beyond.

Group One consists of customers who are internet savvy and are just looking for a comfortable and inviting facility aside from their homes and offices to browse the internet and enjoy a cup of coffee and snacks. Group Two consists of customers who aren’t yet familiar with the internet but for various reasons, have to visit an internet café to accomplish various tasks.

Basically, anyone who has a passion for computers and internet is a potential customer. Because many people have internet at home or on their mobile gadgets, it is difficult to find a social setting especially in the Central Business District where you can access high-speed internet.

YellowNet intends to target both local and travellers who wish to check their emails, work or play games in a friendly environment. Customers coming into the premises will either use YellowNet’s PCs or plug in their notebooks and tablets into internet ports. The business targets a wide demographic; from youngsters who’re computer savvy to computer novices who’ve realized computer and internet knowledge is a must have.

This well-laid out internet café business plan focuses on these market segments:

5.1.1 University Students

University students are an important target niche in this cyber cafe business plan because they’re always in constant need of internet access and various computer programs. Because they’re always working on projects and assignments, they will find it helpful to work from a cyber cafe where they can have access to unlimited internet. Because they don’t earn an income, students might not be able to afford to pay for home internet packages and therefore, will opt for an internet café which could be cheaper.

In addition, they’re always in need of scanning, printing and document preparation tasks. On many occasions, students remain in the cyber café for extended time are an excellent target for YellowNet. The growing number of students in universities means there is a steady demand for quality yet affordable internet service.

5.1.2 Office Workers

These are professionals who either reside in New York City or travelling professionals who have visited NYC for conferences. Modern career professionals are always on the move and require quick access to fast internet and other cyber-related utilities to effectively perform their work. Often they will need a quiet, well managed and professional internet café to either read work emails, print, scan or work with diverse applications such as Google, Microsoft Office and Adobe Photoshop. YellowNet understands office workers are sensitive and knows too well professionalism must be top-notch.

5.1.3 Teenagers

Teenagers are excited with anything to do with technology landscape. Therefore, they are a major target for YellowNet. If you’re thinking how do internet cafes make money, you cannot afford to ignore teenagers. These tech savvy youngsters want to be online the entire day playing online games, chatting online and posting photos and multimedia content on social networks. For them, life without internet is worthless. YellowNet intends to always have the newest hardware and software to facilitate intensive online gaming sessions.

5.1.4 Seniors

Seniors are not so much fascinated about computers and the internet. However, they do need to accomplish tasks that require them to visit an internet café. In most cases, seniors are a unique but very lucrative target niche for any cyber related business. Because of their old age, they need somewhere comfortable and friendly to access the internet. In most cases, they will need to be assisted by employees to accomplish various tasks such as browsing, printing and scanning. Seniors always need good customer service because they’re sensitive and require staff to be patient with them.

5.2 Pricing of Packages

YellowNet offers competitive pricing after carefully evaluating the pricing structure for competitors. Since the business targets middle income customers, prices have been structured to effectively cater for this economic and social group.

A summary of YellowNet Prices is indicated below:

• Browsing per Minute $0.05
• Document Printing Per Page $1
• Scanning per Page $2
• Gaming Per Hour $5
• Special Packages $2 per hour (After browsing for three hours)

Prices are client-conscious in order to allow them see value in services offered by YellowNet. There are also special packages in place for those who wish to browse the internet for extended hours or print large volumes of documents. Prices outlined in this business plan are friendly to both the customer to ensure they get the best value for their money, while at the same time ensure the business makes good profits from services rendered.

5.3 Business Target of the Company

While there are many internet cybers operating , YellowNet plans to follow a business strategy services that will deliver good results for the business. Before setting up shop, the business has analyzed customer demand, trends and behaviors in order to respond better to their needs.

Fortunately, YellowNet is the first cyber café to be set up on 3 rd Street and enjoys a niche-market that extends over one kilometer. The business targets to enjoy great advantages especially in brand recognition and customer loyalty. Initially, the company will command an almost 100 percent market share in the immediate surroundings. However, in the next couple of years, chances are high, other internet cafes may open. The goal is to still retain over 70% of the market share in the wake of competition.

After doing extensive market research, the following was concluded:

• YellowNet cyber will need to adjust its working hours in order to get more clients. For instance, the cyber will open earlier that competitors and remain open till late after other internet cafes have closed.
• Charge a slightly lower browsing, printing and scanning rates compared to what others are offering their clients.
• There will be a large number of clients visiting the premises especially when international conferences, shows and exhibitions are taking place in the surrounding.
• The cyber will be extremely busy especially during the weekends and weekday evenings as people seek somewhere to browse the internet and socialize as they enjoy a cup of their favorite drink.
• A lot of customers particularly those reading emails only will visit the premises for a shorter period of time compared to those doing research and projects.
• Always have admin on duty to assist special customers especially seniors and those who may need someone to quickly respond to general enquiries.
• Fully implement this gaming café business plan to ensure YellowNet is popular for online gaming as its latest catch especially amongst the youth.

Strategy

Without a solid strategy, opening an internet café will be a failed mission. In this section, we look at the strategies that YellowNet intends to put in place to ensure it meets its expectations. This cyber has formulated three key strategies which include;

1. Focus on attracting a higher number of novice internet users with a friendly and accommodating environment that doesn’t make novices feel intimidated. YellowNet aims to put in place training opportunities to grow and maintain a loyal customer base.
2. Attract more Power Internet users who’re extremely knowledgeable when it comes to using the internet. This is an important customer segment for YellowNet as they’re always in need of cyber café services. Their web-browsing experience makes them to be admired by novice internet users.
3. Focus on establishing a friendly and comfortable social setting for YellowNet customers. A good social environment incorporates entertainment attracting customers that would ordinarily not need to access the internet from a cyber café. Once in the cyber, these customers should find an entertaining environment that will make them realize how fun it is to access the internet in a cyber café.

6.1 Sales Strategy Pyramid

The following points outline specifics on how YellowNet will implement the three strategies outlined above. Strategy pyramid graphics can be found in the appendix section of this plan.

6.1.1 Attract Power Internet Users

This strategy will place more emphasis on putting in place initiatives that will attract power internet users. These users are critical to the success of YellowNet and the following strategies will be used to attract these customers;

• Stay abreast and offer the best computing technologies; these users love using the latest technologies.
• Offer printing and scanning services
• Allowing clients to access powerful software applications.

6.1.2 Offer a Social Hub

This strategy lays emphasis on building a safe, nice and friendly environment for YellowNet customers. Starting a cyber café goes beyond just offering PCs and internet.

• The cyber will focus on availing standard entertainment facilities on the premises to entice more customers to come in. Soon clients who come in to enjoy entertainment will realize there is fast internet on site that they can utilize.
• Invest in beautiful and well-designed sitting areas, tasteful furniture and decorate appropriately with lively themes that promote comfort.

6.1.3 Entice Novice Internet Users

YellowNet’s sales strategy involves reaching out to more novice internet users. This is a lucrative market that many cyber café business plans tend to neglect. Even though these customers don’t have browsing experience, they can be transformed into loyal cyber café customers. YellowNet intends to attract novice customers by:

• Ensure YellowNet is known for a novice friendly environment. The facility will be staffed by knowledgeable and experienced personnel to ensure novice customers feel welcomed and their needs are promptly attended to.
• A customer service desk will be manned by YellowNet personnel throughout to offer any help in case a customer has a question or wishes to raise a concern.
• YellowNet hopes to introduce internet and email classes for beginners. The goal of these classes is to help novice users familiarize themselves with internet browsing and how to use computer systems available at the cyber café.

6.2 SWOT ANALYSIS

The purpose of SWOT analysis is to enable us understand both internal strengths and weaknesses that YellowNet must deal with. It also points out opportunities available for the business as well as the potential threats.

YellowNet has numerous strengths and advantages that will offer the business a competitive advantage and drive success. Before the plan to start an internet café was initiated, adequate market survey was done to identify the strengths, weaknesses, threats and opportunities.

6.2.1 Strengths

• Well trained, professional and friendly staff. YellowNet has gone an extra mile to hire and train staff who have a passionate to train and help clients.
• High-tech equipment which includes super-fast PCs, flat screen displays and high quality printers.
• Fine ambience. Every customer who walks into YellowNet should immediately feel comfortable and welcomed.
• A well-laid out vision as YellowNet knows what it takes to effectively meet client needs.

6.2.2 Weaknesses

• Rapid changing technologies means YellowNet has to always keep abreast of the latest technology.
• Significant expenses associated with keeping sophisticated hardware and software. YellowNet must -find ways to balance technology with other key business needs.

6.2.3 Opportunities

• Rapid population increase of internet users means more people will need YellowNet services.
• Social bonds and networks built as a result of the internet gives the business a platform to grow communities by establishing dedicated chat areas and community programs.

6.2.4 Threats

• Massive reduction of internet access costs. The cost of internet is dropping rapidly and may end becoming cheap that nobody may be willing to visit a cyber café. YellowNet is aware of this reality and will constantly monitor pricing.
• Emerging local competition: In future, new cyber cafes will be opened but YellowNet is well-prepared to take on this challenges.

6.2.5 Competitors

• Because of Michael’s experience in the internet service provision industry, YellowNet has a competitive advantage over other cyber cafes.
• The business has a unique sales and marketing strategy that effectively addresses how do internet cafes work in a highly competitive environment.

6.2.6 Sales Forecast

• YellowNet Cyber is expected to get a regular influx of customers throughout the day and the sales are expected to vary from day to day and month.
• YellowNet has based projected internet sales based on number of hours every terminal is active. Coffee and espresso sales are based on a financial data provided by Kobrick Coffee Company.

6.2.8 Milestones

The Yellow Net Cyber Café has come up with some basic milestones to keep the business priorities in check. Responsibility of implantation will be overseen by Mike Thicke and his wife Tracy Thicke, who is the manager of the business. The milestone table below will be updated with an actual table as the year progresses.

Personnel Plan

Michael Thicke is the CEO and Owner of YellowNet Cyber. He manages and oversees all daily activities in the internet café. Mike will be helped by his wife Tracy, who is the Manager and will oversee financial books for the business. Both Mike and Tracy are responsible for making key management decisions.

Three staff members are Admin Assistants working part-time earning $7.00 per hour for 30 hours per week. There is one full-time technician working 40 hours per week at $12 per hour. The role of the technician is to offer technical support to clients and fix minor terminal bugs while Admin Assistants perform general administration duties. Intensive interviews and training is done to ensure only qualified personnel work in the establishment.

The simple staff structure ensures efficient distribution of duties and seamless workflow. It also allows better communication among team members to facilitate quick decision making. YellowNet management knows the secret to success is how to start your own internet café business with minimal but efficient personnel.

The following table is a representation of employee salaries for the next three years.

Financial Plan

YellowNet has developed the following financial plan which outlines how this cyber will achieve its financial goals within first three years. A financial way forward of how to start an internet cafe is essential to help the business realize its financial targets. There are plans in the pipeline to launch other establishments in NYC. For this to happen, the company must formulate a workable financial plan that will drive success.

8.1 Important Assumptions

Basic assumptions are indicated in the table below. These assumptions are expected to show variations due to various factors, but the result will not have any significant effect on the company’s financial strategy.

8.2 Brake-Even Analysis

Brake-even data for YellowNet is illustrated in the chart and table below.

8.3 Projected Profit and Loss

Payroll Expense: The founder of YellowNet, Michael Thicke will get a salary of $26,000 in year one, $28,000 in year two, and $30,000 in year three. YellowNet has put in place plans to hire 3 part-time after first year ends for $6 per hour while a full-time technician will earn $12 per hour.

Lease Expenses: The facility intends to lease a 1,500 square foot facility at $1.875. According to the lease agreement signed by YellowNet, rent due every month totals to $800 for a total of 24 months. After five hundred and twenty days, the lease is availed for consideration. Right to renew or cancel the agreement is based on issues at hand.

Utilities Expense: As indicated in the signed lease agreement, the lessor is responsible for utility payments which include; real estate taxes, gas and garbage disposal among others. YellowNet is expected to cater for the internet cafe business phone bill expenses.

Marketing Expenses: YellowNet has allocated $20,000 for promotion related expenses for year one. This money will cater for placing adverts in local dailies to boost customer awareness.

Insurance Expenses: YellowNet Cyber has allocated $7,000 for insurance for the first year, second and third year. In future, the business intends to spend more on insurance coverage.

Taxes: Since YellowNet is an LLC, it is not taxed but there is a 15% payroll obligation.

A Comprehensive profit and Loss data is illustrated in the table below.

8.4 Projected Cash Flow

YellowNet’s projected cash flow is shown in the table below.

8.5 Projected Balance Sheet

YellowNet’s projected balance sheet is shown in the table below.

8.6 Business Ratios

The SIC (Standard Industrial Classification) code for Internet Service Provider Industry is “Remote data base information retrieval “7375.9903. “information retrieval services” 7375 report was used to generate the industry profile. YellowNet is also a food café so it could have used “Eating Places” ratios based on SIC classification 5812. YellowNet Café belongs to two business segments that makes the ratios a combination of two industries.

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