BUSINESS IDEA FOR SETTING UP AN INTERNET CAFÉ

Introduction

An internet café or cybercafé is a place where one can use a computer with Internet access, mostly for a fee, usually per hour or minute. Sometimes one can have unmetered access with a pass for a day or month, etc. It may serve as a regular café where food and drinks are served. The total investment is estimated at cost of US$6,602 per year while revenue is estimated at US$ 22,620 per year.

Market Analysis

Internet café business has grown over the years. There is ready market from students, business men, schools, corporate, researchers and scholars. The business is suitable in Urban areas. There are very many players in this business as they are widely spread all over the Country.

Capital investment in US$

Capital investment item  Units   Qty   Unit cost   Amount 
Computers  No 10   600  6,000
Scanners  No   1   100     100
Photocopy  No 1 2,000     2,000
Laminating machine  No 1 100      100
Air conditioners  No  3 50          150
Tables  No 13 13       163
Chairs  No 20 15    300
Fax  No 1  150   150
 Total cos                                                                                           8,963 

  Production Operating costs in US $

Other  requirements  Production

cost/ month 

Production cost/year 
Internet connection    692
Subscriptions   197 2,364
Staples and punching machine     25
Sub-total    197    3,081 
General costs(overheads)    
Utilities(water and power) 75 900
Labour 40 480
Rent 125 1,500
Miscellaneous costs 50 600
Depreciation(Asset write off)Expenses 3 41
Sub -total 293 3,521
Total Operating Costs 490 6,602

Production costs assumed 312 days per year with a daily capacity of 550 services of faxing, surfing printing and photocopying

Depreciation (fixed assets write off) assumes 4 years’ life of assets written off at 25% per year for all assets

Direct costs include materials, supplies and other costs that directly go into production of the product.

Project Product Cost and Price in US$

Item  

Qty/d

ay 

Qty/yr  Unit

Cost 

 Pdn cost /yr   Unit Price   Total Revenue
Faxing       5 1,560 4.2 6,552   0.5        780
Surfing     35 10,920 0.6  6,552 1.0    10,920
Printing   200 62,400 0.1 6,240    0.1      6,240
Photocop ying  

300

 

93,600

 

0.1

 

9,360

 

0.05

    4,680
Totals              22,620

Profitability Analysis in US $

Profitability Item  Per day   Per month   Per Year 
Revenue   73 1,885 22,620
Less production and operating Costs 21 550 6,602
Profit 51 1,335 16,018

 Source of Supply of Equipments

The necessary tools are readily available in Uganda, e.g. at; Kazinga Channel Entebbe Road, PC World Bombo Road e.t.c.

Government Incentives

The Government divested from all issues of areal communication sector and liberalized through establishing a Communication Commission, which regulates and governs all the affairs pertaining to the sector.

Research was done by Business Synergies for Uganda Investment Authority SME Department.