Why Most I-Café Start-Ups Fail

As former internet café (i-café) owner who engaged in the business for seven (7) years until 2007 and a keen observer cum advocacy worker for the industry since then, I decided to put on record my personal experience and opinion on why most i-café start-ups fail so I am coming up with a series of articles about the subject. You may not have noticed it but i-café is one easy business to engage in. Any one with PhP100k to spare can be easily tempted to open an i-café. Unlike a food stall where one has to cook the items that he would sell, an i-café owner has just to set-up the shop and hope for the customers to come.

When asked how I would describe the i-café industry in terms of maturity or economic sustainability, I always reply that 50% or half of the existing i-café are 3 years and older while the other half are new start-ups of 6 months and younger. By this, I mean that those current operating in this highly competitive business are either veterans or novices, no in-between. This only shows that newcomers have slim chance of being where the veterans are.

If only people understood the truth that most i-café start-ups fail, then they may not be so tempted to indulge or enter the business in the first place. Failure comes by way of not earning enough to break-even from opening the business till it closes shop when operating fund runs out which usually come before its sixth month of existence.

Off the cuff, for me, the No. 1 reason why start-up i-cafes fail to achieve economic sustainability is the endless supply of amateurs that fall victim to the enticement ‘to have his own i-café’. These people have no idea about how to price services and products that are capable of giving them a reasonable compensation for their long hours of work and a competitive return on their substantial investment in the business.

The less-than-sustainable prices of start-up i-cafés keep even the good i-café operators from getting reasonable returns in the industry. So, as the rotating door of new entrants replace the outgoing haggared failures, prices remain for all participants below what is required for the industry to be a sustainable and worthwhile investment.

For my series of articles on why most i-café start-ups fail, I will try to answer the following questions to the best of my experience and observations:

  • What are the most common pitfalls i-café start-ups run into?
  • Why is it that they seem to have to work such long hours and cut corners just to stay ahead?
  • Why does i-café business seem like such a competitive and impossible to succeed industry?
  • How can these problems be avoided or dealt with?

I will not be posting successively about the above questions as new and more important issues may crop up as I write about why i-café start-ups fail. Just keep watch as I wind-up my being an active advocate of an industry that I have tried to fight for in a long while.

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