Business advice required

[Tobeman]

Me and a pal are looking to start up our own business, and we need some advice really. We are elligible for Princes Trust funding so I've enquired about that and we are also looking for further funding and/or investment opportunities, anyone got any advice on those issues? We need to find ourselves some premises, whats the best place to start searching for said property?

Finally, we're going to need a furniture supplier, any recommendations with that?

Any other tips, hints and advice welcome

Ta very much,

Tobe

[rainbow]

what is your business going to be in tobeman?

[Tobeman]

We're looking at setting up a internet cafe as we reckon theres a market for it, theres only a couple in the local surrounding towns and tbh they're a bit naff - on second thoughts I believe the other has closed down (bodes well?) but it was run by kids.. literally.

[rainbow]

oh really so how old are you guys and what are you leaving to do this?
what is going to make your cafe differnt from any other?

[Tobeman]

We're leaving higher education at the end of this term. Both of us have had part time jobs, I currently work as a Computer Technician for a local PC shop. I've worked as a Junior ICT Manager for a summer placement and experience. Prior to that I helped out when I could in my free time in a local internet café. Ontop of my studies and part time work I also help out in the local villages doing repairs, consultancy for smaller businesses and networking, general bits and bobs. I've got a few years of sales experience, done some relevant day training courses and what not

Difference? The atmosphere. Any other café I've been in locally has been shoddy tbh. Ontop of the usual facilities I hope to run some training style workshops and get a real community feel going, making it more accessible to everyone..

..in theory.

[johnny02004976]

tbh with furniture, u need as cheap as possible but not total crap - ikea could be a good bet, its cheap so if anything breaks its not a big deal, plus it looks modern as well.

[herulach]

You need a sound business plan, properly costed, including everything, even things like water rates etc. Are you planning on serving food? If so you need all the hygene certification bs. Depending where you are i reckon itd be possible to make as much if not more money from network installation, particualrly in student houses.

As far as furniture goes, probably building it yourself, getting some proper shopfitters in will look a damn sight better than a collection of desks, youre trying to have an atmosphere not an office.

Youll also want stuff (i imagine) like a big refigerated counter, and a coke fridge, probably a good coffee machine (not instant stuff and an urn) which will set you back about a grand.

Depending where abouts youre setting it up, try focussing on getting the cafe part right youll get a lot more passing trade that way, and learn how to make a good bacon sandwich, was speaking to the owner of a place thats opened round the corner from mine the other day, and he reckons about 50% of his business is breakfasts for builders. Not your target market, but certainly worth considering if you can be bothered opening at 7am

[dave87]

tbh with furniture, u need as cheap as possible but not total crap - ikea could be a good bet, its cheap so if anything breaks its not a big deal, plus it looks modern as well.

I remember having this debate with my school when they replaced the furniture in the 6th Form Common Room, but businesses and schools cannot simply buy their furnature from places like Ikea, as due to it being a public place it has to conform to more stringent Health & Safety regs, and therefore costs more. Office equipment would be more suitable - but make sure its not home office - as that avoids the regs in a similar manner.

As to the Internet Cafe idea, its a good one, but you need to be able to cater for all the different user groups - from the basic email/word/webcam users to those that want a gaming atmosphere (if you are including this aspect). Training courses, you'd have to look into getting certified if you want to seriously enter that market, though basic skills courses you could run as an introduction to computing.

With the food side, as someone has said if you intend serving cooked food you would have to get the required qualifications. There is also the issue of food & drinks near PCs, so it may mean setting up a cafe area aswell. To be honest a well stocked range of drinks - a vending machine may be a good idea - and a refridgerator with sandwiches etc would probably be a better idea at first, rather than jumping in at the deep end.

With regards internet - you will need a fairly substancial and reliable internet connection for your users. Depending on how many people you intend to serve that may be up to a leased line. You will also need a way of managing the Internet, aswell as providing resources etc - a server with the relevant licences may cost a fair bit unless you are handy with linux.

With regards to the specs of PCs etc that you intend to include, basic dells would be fine (the £299 ones which include a flat panel) and some cheap webcams & headsets if you are offering simply internet access & web comms such as skype etc. If you intend to offer gaming, then your requirements will vary depending on the games you offer, however with games such as steam you can sign up to their cyber cafe scheme - which will limit the requirements on your internet connection when an update is released by hosting a local content server. It may also be a contractual requirement if you are re-selling the games (ie Renting).

With regards to other avenues of income once you have set up the business, a sideline in PC maintainence could be quite profitable, and the possibility of custom built PCs from there may be possible. The only problem with that is providing any warrenty on the entire system, as if you buy parts and assemble it then the warranty will be on individual components.

In terms of advertisement etc, you will need to work out what your target audience will be, this will vary dependant on what services you offer, and will greatly affect the possibilities in terms of advertising. The majority of your costs are going to be upfront, but after purchasing all the equipment and the initial advertising, then your costs should be fairly low, easily covered if you become successful.

Funding wise you could approach a bank if you have a rigorous enough business plan. I also remember reading about a government scheme to back people who have no collateral (such as houses or cars) which the loan can be secured upon, in essence they are your guarentors (the state that is). I'm not sure on the Prince's
trust, but I doubt that would entirely finance the initial outlay required. Therefore partnership with local companies may be a good idea, if you are able to convince them that your business is a viable one
My expertise doesn't extend to retail property, so you would also need to find out about that, but hopefully I have given you some food for thought

EDIT - didn't actually realise how long it was, hopefully though it is easy to read and follow

[JPreston]

Whereabouts in herts? Cheap rent in Hatfield and Stevenage. Do people really use internet cafes though, except when on holiday? I imagine people either own a PC, or aren't bothered with them at all, or go to the library and use them for free.

[Tobeman]

I student housing is pretty non existant round here tbh. I'm creating rough notes to compile a business plan but I'm finding it hard to create any accurate costings without an idea of the size of the premises. ill make a more constructive reply later as theres a lot of points you made there guys but I'm on my phone and even with the QWERTY keyboard its a bit of an effort

Ta very much, keep it coming!

[javalord]

Whereabouts in herts? Cheap rent in Hatfield and Stevenage. Do people really use internet cafes though, except when on holiday? I imagine people either own a PC, or aren't bothered with them at all, or go to the library and use them for free.

I agree here. Is there really a market for this?

As for Dave87 post:

Firstly a leased line? Load balanced ADSL ISPs will do with squid cache server. Leased line is just going to kill the overheads.

As for doing training etc, get the basics right first, i.e. the cafe bit and basic internet workstations, and deviate later if there is possible market demand.

Custom PC market isnt as big as you think - people do like to build their own nevermind other issues, and its becoming quite a price sensitive market so competing with the likes of Dell isnt the smartest of ideas.

Advertising? Who needs advertising? A good location and word of mouth can easily beat any advertising. But this means focussing on getting your service on par and appreciated.

My honest opinion? If your likely to get a great location that would bring in plenty of custom in terms of café then maybe but as JPreston nailed, this country is broadband penetrated well and truely... even T-Mobile are offering £20/month 3g data services for 2gb a month!

I've seen many 'cyber cafes' open and close in main cities, and they charged reasonable rates, too. Give it a think over, and hope you aint afraid of some hard graft ;-)

[Mike Fishcake]

Location, Location, Location.

Are you based on a busy street or tucked away somewhere?

[Honoop]

When you are looking for premises make sure you find out what the Business Rates are, especially in High Streets etc these can be higher than your actual rent!

[dave87]

As for Dave87 post:

Firstly a leased line? Load balanced ADSL ISPs will do with squid cache server. Leased line is just going to kill the overheads.

Sorry, when I used the term leased line I used it incorrectly - I meant SDSL or above.

As for doing training etc, get the basics right first, i.e. the cafe bit and basic internet workstations, and deviate later if there is possible market demand.

Thats certainly true, though if you present to a bank with a wider range of services they are more likely to see stability in your plan rather than your income being based on one single source

Custom PC market isnt as big as you think - people do like to build their own nevermind other issues, and its becoming quite a price sensitive market so competing with the likes of Dell isnt the smartest of ideas.

No, but some often prefer the service of a local company they know and trust. That is often outweighed by the cost advantage of dells.

Advertising? Who needs advertising? A good location and word of mouth can easily beat any advertising. But this means focussing on getting your service on par and appreciated.

If you are looking for the support of banks you need to have a plan in place to raise awareness of your service. Otherwise they aren't likely to look seriously at your proposal - even if it is only limited advertising and relying on mostly word of mouth. An introductory offer of somesort is probably the best way, so I use advertising in the loosest sense of the word.

My honest opinion? If your likely to get a great location that would bring in plenty of custom in terms of café then maybe but as JPreston nailed, this country is broadband penetrated well and truely... even T-Mobile are offering £20/month 3g data services for 2gb a month!

I've seen many 'cyber cafes' open and close in main cities, and they charged reasonable rates, too. Give it a think over, and hope you aint afraid of some hard graft ;-)

Yup, all valid points, and I'm sure it will be something they will contemplate seriously before entering in to any venture.

[javalord]

A golden rule in business is to minimize costs as economically possible, but strike a balance of quality, too.

SDSL is still very expensive for relatively low bandwidth. If your not as technically minded in networking something lke ClarkConnect can load balance and offer a cache service. All you'd need to do is get a few ISP links in and have it round-robin between them.

As for a bank manager, it depends how clued up they are. Some will realise that great location + good food + good basic core services = ££££.

Regarding the above and advertising, my favourite deli in Newcastle was recommended to me by word of mouth and I sometimes drive 3 1/2miles just to get something to eat from there, its that good.

They dont offer the swiss army of services, but what for what they do , they get it damn right, and their customers know it, which is why the place is rarely empty.

I still think computing repair services isnt a great idea, especially if you can get the core functionality established, this alone could bring in revenue.

Finally do you really need banks? I'd prefer to have a parent borrow me the money and sign a contract to agree you'd pay back x amount etc and if and when certain conditions happen do this etc.

[frumpet]

We're looking at setting up a internet cafe as we reckon theres a market for it, theres only a couple in the local surrounding towns and tbh they're a bit naff - on second thoughts I believe the other has closed down (bodes well?) but it was run by kids.. literally.

This is key to determining the market size in the area. You definitely need to embark on some market research before costing anything. If i was you i would try and visit the remaining cafe as many times during the week as possible and stake the place out for a few hours at a time to get an idea of how large their customer base is. You need to actually count how many people are in the cafe at specific times on specific days to come up with some accurate figures for the potential market size in your area. You also may want to look at doing some quick surveys in the areas your looking to setup in asking people if they've ever used the existing cafes and whether they would in the future.

You should also find out just why that other cafe closed. Was it due to too few customers coming through their doors? or did they have enough customers but failed to keep their costs low?

Only once you know how large the potential market is in your area and how many people you can roughly expect through your doors can actually come up with any real estimates on prices/costs.