B. Karen Kiely, Stephen Carty, Fiachra Horan
Our initial idea was to start a computer game development company. Given the type of product we would produce, our different skills could be utilized to make a quality product. There were problems however with the scale of the games we would make and how revenue generated would apply to the time spent creating the games. The only way to make any profit as a game company is to make large games or make a lot of good small games quickly. Video Game Costs for larger titles, costs are greatly increasing as the platforms improve and the man hours required to make a game of good quality increase. Smaller titles like Bejewelled and other arcade games only return about €1 - 0.50 per unit sold which requires several units to be sold to cover basic development costs (€0.50 return with development costs of 200,000 requires 400,000 units to be sold just to break even).
After discussing the costs and returns of computer game development and acknowledging that it has been shown not all games make a profit, the time and effort spent developing games ourselves does not guarantee any profitable return leaving this plan as an excessive risk.
USB phone charging stations in shopping centres
Another idea was to use USB phone charging stations and place them in shopping centres. Customers would pay a few Euro to place their phone in a locker to charge. The EU are looking for standardisation of mobile phone chargers. For this, we would need a supplier and manufacturer and shops would need to invest interest. It would be hard to prevent people from using lockers for other things. We couldn't see a profit from the business or a particular market for it in Limerick.
The idea of setting up a gaming cafe was appealing. We proposed to use a full shop front to entice customers in. The cafe could offer customers coffee and snacks. We thought of the example of the gaming cafe in town, FrontierX, which is located upstairs over other premises and is kind of invisible to the customers on the street level. We thought that we could make some return on such a service as it is needed in the city centre.
Graphic design for bands
We proposed the idea of a graphic design for bands company. We felt there was a gap in the market for cheap graphic design for small local bands. There is a t-shirt printing store in Arthur's Quay shopping centre, which provides the service of t-shirt printing in unfriendly white letters. We proposed better design for posters and t-shirts. We then decided against this idea as it is very focused and would lead to minimal profit.
Our target customer is a person who is a fan of video games and spends a considerable amount of time gaming. The customer is typically in his/her teens or early twenties. There is also the possibility of having an older customer, perhaps into the 30s however it is fair to assume that this age group would have other commitments such as careers and families which would not allow them to spend time at a gaming cafe. Because of this, we are going to concentrate on providing a service for those in the 15-22 age group. This age group would typically be single or in relationships however it is unlikely they are married. They will live in or around the Limerick city area. Limerick is provided with a city bus service so these customers would be able to come into the city centre quite easily. Their hobbies are mainly playing video games. Other products they would buy would include actual games, consoles and other technologies, like phones, MP3 players and PDAs. They will have an interest in technology and the Internet, and are more than likely a member of some online communities e.g. Facebook. The customer will enjoy snacking while playing, on things like pizza, coffee and soft drinks. The customer needs a high speed Internet connection to play XBox 360 and PC games and this is more available in the city centre.
Large high definition screens, large screens that will wrap around the walls of one room in the cafe, which provide an more immersive environment for the customer, which would be unique to the Limerick area. fast gaming PCs with high speed Internet to reduce lag, option for hassle free LAN gaming with friends, website, social networking, customers can bring in their own games and play them on the consoles provided so that their is no need for the customer to pay hundreds of Euro for the console (with the use of online accounts, one has the option of a roaming profile to keep track of their progress).
A side room that contains two comfortable couches and Sky Digital with a 42" LCD television for when the member wants to take a break from gaming (usually used during LAN nights). Cheaper costs of continuous use after initial fee. Reward system e.g. Free night gaming, free pizza.
We're going to have a reward card scheme whereby cutomers regardless of whether they're members or not can get points for drinking coffee, using the internet and games ect. which can then be exchanged for goods and services provided (members will have a slightly higher rate of reward points gained.)
Relaxation lounge with sky digital for members, the ability to make and cook things such as Pizza, smoothies and coffees on site. Will hold leagues/competitions for all kinda of genre and console e.g. Pro Evo for PS3, COD6 for Xbox 360, Counterstrike for PC. The shop front will actually serve as a coffee/smoothie bar so that the premises is guaranteed to make so profit and as the customers come in they can become aware of the computer side of the business. Computers will have two different settings one for Internet browsing the other for games. Wall mounted monitors and towers for more space for the user, waterproof keyboards [RARE? GAP?] so that people can eat and drink while on the machines without risk to the equipment. Will look into working with a movie rental business such as Xtra Vision to have one night a week to use our projectors to show new release movies, at a substantially cheaper cost to members. Possibility of looking into getting a deal with Sony for an entertainment system so that they could send us new releases as a promotional offer.
The gaming cafe will have a Facebook profile where customers can interact with each other and gaming events can be advertised, as well as a Twitter account, where the customers can follow announcements of events etc. This will also benefit the stakeholders in the business as it leads to free-of-charge marketing that is aimed at the relevant audience. The cafe will have a full shop front on a popular street e.g. William Street, Cruises Street etc. to draw in customers and passers-by. This is unique to gaming cafes in Limerick as, using FrontierX as an example, gaming cafes are usually hidden away in unpopular streets or upstairs over other premises and customers simply don't know they are there. The interior design means a lot in this business, customers won't want to go out of their way to go the the cafe unless they like the atmosphere and find it comfortable and cozy. Friendly knowledgeable staff are a must or it will drive custom away.
Revenue mechanism and financial projection
Shopfitting : Interior designed and fitted to contain a cafe, area for 20 computers, bathroom facilities, back room with space for two couches and televisions and a small office. Cost estimate is made up of interior design and construction costs. Cost estimate: € 20,000
Cafe Equipment : Cash registers, Refridgeration equipment, ovens, grills, coffee machines, dishwasher, cutlery and crockery. Cost estimate: €10,000 (inclusive of installation, wiring and pluming)
Computers : Gaming spec computers @ €1500 each to future proof them for a few years. This combines the cost of monitors, input devices and Headphones. Cost estimate : € 30,000 for 20 gaming spec computers and €5,000 for an admin computer, business computer and server.
Furniture : Cafe tables and chairs, Computer area chairs, office furniture and two couches in the back room. Cost Esimate: € 8,000
Large wall mounted Televisions in cafe and Back room. Cost estimate three 42" Phillips wall mounted LCD televisions @ €1,000 each = €3,000
Initial food and computer goods stock :The greatest expenditure will be the initial stock for the cafe and of computer goods like usb drives and dvds for computer customers. As there will be no utility to save onto the computer hard drives, some customers will require these data storage devices to save what they download off the internet. Cost Estimate €1,500 for Cafe supplies and €500 for computer supplies = €2000
Software We will require a software product for managing member accounts and charging for computer usage. We have priced a few proposals at €2000 for the system. We will also require a licensed copy of software per Computer running the software. This is mainly for the Games. We will need 20 copies of each game which can be €600 per game. Steam accounts can reduce this cost. Initial Cost Estimate for pricing software and 15 games = €10,000
Security System : Camera's approx €1,200 The premesis will need 6 camera's total coming to €7,200 they're connected via ethernet cable to a computer on site and stored, at the same time it is streamed to a computer off site where the feed is stored.
Total Setup Cost Estimate: €100,000
Rent : most advertisements for shopfronts in the Limerick area are listed as price negotiable or price on inquiry. From what I've gathered from listed prices. Renting a shop in Limerick city will be somewhere between €15,000 and €30,000 per year. Cost Estimate: €23,000 per year
Wages : To start we will need three staff in the cafe, one staff member as a computer admin and a manager who can support both areas. More staff can be added if demand is good for our business. Initial Cost Estimate is 2 basic staff at 20,000 per year, an admin at 22,000 per year and a manager at 25,000 per year = €87,000 per year
Cafe and Computer goods supplies : Stock maintenance of Cafe and Computer goods should be about €500 a month depending on demand. As these goods will have a good profit, increasing this value will mean increased sales and income. Cost estimate: €6,000 per year
Insurance and Security : Insurance will be required for health and safety as well as protection for the business property. The Insurance will cover accidental injury, property damage and theft and will cost approx €3000 per year. Security system monitoring and software for protecting the computers and will cost approx €200 for the monitoring and €1,800 for the antivirus software. Cost Estimate €2,000 for Securities and probably another €3,000 for insurance (need actual business details to get a quote) = €5,000
Games : to keep with current customer demand, we will have to maintain our stock of games to make our business more attractive. As a copy per machine is required, Estimated cost is €600-800 per title.
Utilities Internet and Electricity costs will be about 10,000 a year.
Advertising We can take advantage of free internet communities to advertise our business and keep our customers aware of upcoming offers. We will use Facebook, Twitter and other discussion boards. We can also use word of mouth and keep mailing lists of members. With UL and LIT in Limerick, we can provide special offers to students and spread word with the Gaming societies like GSOC in UL.
Total Estimate Running Costs: €135,000 a year
Computer Usage Fees As advised by forums of Internet cafe owners, we should not assume that our computers will be always full. Given 12 hours, 364 days a year at member rate of €2 an hour, we should have a 100% average usage income of 174,000 per year with a basic 17,400 at 10% average usage and a realistic 44,000 a year at 25% average usage. We will charge €3 an hour for non-members and €2 an hour for members who prepay onto their account. We will have printing services for those that require it. Estimate: €60,000 per year @ 40% utilization
Cafe Sales: Our Cafe will be a standalone cafe which will appeal to people who don't want to use the computers. It will serve the normal goods expected of a cafe as well as snack and specialty foods that will be of interest to our computer users and gaming customers. Our setup will benefit our computer users as they can have their food and drink while participating in a multi-player game with their friends beside them. The cafe will also be available for events so that extra income can be made. Excluding events we hope to make at least 20,000 a month. Given that we are serving food, coffee and snacks and people who are sitting down for extended periods of time like to eat, 650 a day should be achievable in a city like Limerick for a well placed cafe. Estimate: €100,000 a year @ 40% utilization
Computer Goods and Printing Services : We will provide some computer accessories like Dvds and Usb drives for customers who want to save data they download. We will also have a printing service available. These will not be a regular profit but could add up to €1,000 a year. Providing these services will be for the customers benefit.
Events To make ourselves known and to provide extra service to our customers we will have events like LAN nights. These events will require a small fee from the customer for which they get a night of gaming with some food included in the price. The cafe will also be open to provide the customers with much needed snacks and caffeine as the night progresses. From experience of these LAN events, the cafe will make good business from the event with the customer fee covering wage and utility costs. Events will be organised by us and available on request for Birthdays etc. Money will be made from extra cafe business and booking fees for requested events.
Initial Estimate Income: €160,000 per year @ 40% utilization.
We have only estimated profits at 40% to ensure that we can survive as a business. Naturally we will strive to improve our business and attract new customers to our events and to enjoy our cafe goods in a relaxed social environment. From these figures we can see that for the first year, there may not be a clear profit given our start up costs but we hope that as we move into year two and onwards, our business should be highly lucrative given the right implementation.
Improvements By reducing the cost of Running expenses, we can naturally increase our profits. Another means of increasing profit would be the addition more Gaming computers. A computer if used constantly can make up to 8000 a year which for a 4000 max setup can yield good profits. This will be determined by the popularity of our business which should be evaluated before any new machines are purchased. Our location should account for expansion of at least another 15-20 computers as well as Cafe expansion if the cafe is doing well.
Gaming Cafe Executive Summary
Our Business Plan
Our Business plan is to establish a gaming cafe. With this cafe we will provide a place where our customers can come to hang out, play computer games with friends on high speed machines or just relax. Our business will be made up of an internet cafe style arrangement with over 20 gaming spec computers which can be used for normal internet activities like checking facebook or watching youtube videos but will also allow our customers to play modern mutiplayer games against each other or online with a fast internet connection. Alongside the Computers will be a standalone cafe which will cater to customers of both cafe and gaming culture.
Our main customer focus is people who are interested in playing computer games regularly, are between the ages of 15-22 and living in Limerick. This demographic would not have as many commitments like careers or families and would have easy access to the cafe given its central location in Limerick City and the city bus service which links all over the city including to the University of Limerick and Limerick Institute of Technology. Our customer will also enjoy snacking while gaming and our cafe will cater to that desire with specialty goods like pizza, energy drinks and donuts.
We will also have customers which will come for our cafe. It will serve the normal goods you would expect from a cafe including quality fresh coffees, sweet desserts and paninis. This customer will enjoy our relaxed social environment and may take to the couches in the back room to relax in front of a good film.
Customers can have fast, immersive play with fast speed internet and a social environment in which they can share their fun experiences. With our reward cards, repeat customers can get points for cafe purchases, using the internet or playing games. These points can then be spent on free food, computer time or Lan night entry. Our customers who become members will enjoy faster accumulation of reward points as well as access to our side room which contains comfortable couches, 42" Tvs and Sky Digital premium so they can take a break from gaming. To our customers, our Gaming cafe will be their home away from home.
Relaxation lounge with sky digital for members Pizza, smoothies and coffees on site. Will hold leagues/competitions for all kinda of genre and console Computers work for both internet and gaming. Wall mounted monitors and towers for more space for the user, waterproof keyboards so that people can eat and drink while on the machines without risk to the equipment. One night a week to use our projectors to show new release movies. A Facebook profile where customers can find each other and gaming events can be advertised. Same with a Twitter account. Share holders can moniter activites via RSS feed. Friendly knowledgeable staff.
Revenue Mechanism and Financial Projection
Our revenue is made up of cafe sales and computer time rental. From our combination of the two, we make our Gaming Cafe an attractive place for people who want a nice cup of coffee with friends or to battle their friends in some digital world for bragging rights and pure fun. We believe our combination should see both revenue sources aiding each other as people on the computers will smell the fresh coffee inducing a desire to buy a cup or two and the people in the cafe will notice the laughter over at the gaming machines and be tempted to join in.
We will invest in our business ourselves with help from our families and friends and take advantage of tax breaks available to startup businesses. We will apply to Irish Small Medium Enterprises Board and the Limerick Enterprise board for grants to establish our business.With our business plan, we can expect to start making profits from year two. Our first year will have our setup costs as debt but our running profit should be enough to remove this debt before the end of year two. Our income estimations are only an initial estimation which aimed low shows we can still make a profit. As word of mouth spreads and we develop regular customers, we can see our profits rise. We will evaluate our business after 6 months to shape our business to our customers needs and expand our Gaming Computer Stock to maximize potential profits.
=Executive Summary PDF= File:Executive Summary.pdf