ryethenovel Chapter 118 Internet Cafe Construction Solutions
Chapter 118 Internet Cafe Construction Solutions
At nine o'clock in the morning, the internet cafe had just opened. The lobby was filled with the smell of smoke from the previous night and the odor of computer cooling. Zhao Weiguo was debugging an old computer with a network administrator. When he saw Ling Yun enter, he straightened up and wiped his hands.
"Mr. Ling, you're such a busy person, you still remember that internet cafe? I haven't been here for half a year. What brings you here today?"
"Take a look." Ling Yun glanced around the hall. There were sixty machines, about a third of which were occupied, mostly by students playing "Red Alert" or "The Legend of Sword and Fairy".
The two went into the small office on the second floor. The room was narrow, filled with parts boxes and several computer cases waiting to be repaired.
"Sit down." Zhao Weiguo moved the keyboard off the chair. "Did things go smoothly with Dell?"
"It's alright." Ling Yun sat down. "How's the internet cafe doing lately?"
Zhao Weiguo took out an account book from the drawer: "Last month's turnover was 120,000. After deducting rent, labor costs, electricity, and broadband, the net profit was 42,000. We collected 80,000 in membership card prepaid value. After amortizing 20,000 in computer depreciation, we actually made 20,000."
"That's possible." Ling Yun flipped through the ledger, "but it's too slow. A store earning over 200,000 a year isn't enough."
"I think so too," Zhao Weiguo said. "We want to open a branch, but we don't have enough funds. A computer still costs seven or eight thousand yuan, so sixty computers would cost five hundred thousand yuan. Add in rent and renovations, and the investment for one store would be eight hundred thousand yuan. The payback period is too long."
"So we need to change our approach," Ling Yun said. "Internet cafes are not just internet cafes; they are experience stores and promotion points for Xinghuo Technology."
Zhao Weiguo didn't understand.
Ling Yun explained, "We're about to launch our own computer brand, Starlight. We'll also be offering optical mice and keyboards pre-installed with the Starlight operating system. Internet cafes are the best showcase. Users here will use our equipment, play on our system, and get used to our ecosystem. The next time they buy a computer, they'll prioritize Starlight."
"Then we'll have to replace all the machines with ours."
"Yes. The two stores in Jinan will switch this year. All the new stores will use Starlight computers," Ling Yun said. "The cost is higher, but it's worth it when factored into the brand promotion expenses."
Zhao Weiguo wrote in his notebook: "The profit model of that internet cafe..."
"Things will change," Ling Yun said. "Before, we relied on internet fees; now we'll rely on a combination of revenue streams: hardware displays, software promotions, and even revenue sharing from game point card sales. We want to turn internet cafes into a traffic portal."
He paused, then asked, "You just said someone wants to buy the management system?"
"Yes." Zhao Weiguo opened his computer and pulled up an email. "A boss from Zhejiang, who owns two internet cafes in Wenzhou, visited our store when he came to Jinan. He thought our management system was easy to use, with members swiping their cards to log in and out, automatic billing, and clear backend statistics. He asked if I could sell him a copy."
"What did you reply?"
"I said I'd have to ask the company," Zhao Weiguo said. "You wrote the system initially, and I've made quite a few changes since then. It's quite feature-rich now: member management, machine time control, remote monitoring, inventory management, and it can even connect to some prepaid card recharge platforms."
"Have you given a price quote?"
"No. He asked, and I said it might cost around 20,000."
Ling Yun thought for a few seconds: "We can sell more than just software. We can sell complete solutions."
"What do you mean?"
"Some people want to open an internet cafe, but they don't know how," Lingyun said. "They don't know how to choose a location, decorate, configure computers, manage systems, or operate daily. We can provide a one-stop service: from site evaluation to decoration design, equipment supply, system installation, staff training, and after-sales maintenance. They just need to put up the money, and we'll take care of opening the business."
Zhao Weiguo's eyes lit up: "This...this business is huge!"
"So you'll be in charge." Ling Yun looked at him. "Establish an independent department called the 'Spark Internet Cafe Solutions Business Unit.' You'll be in charge. Your initial tasks are twofold: First, productize the existing management system and package it as standard software for sale. Second, design a standard solution for internet cafe construction, including site selection models, decoration templates, equipment lists, and operation manuals."
"Can I do it?" Zhao Weiguo hesitated.
"You've been managing this store for a year, and you're familiar with all the processes. What you lack is a systematic approach," Lingyun said. "I'll assign you two people: one who understands interior design and the other who understands marketing. You need to do three things first: First, write a detailed management system manual and a price list. Second, compile our lessons learned from opening the store and turn them into standard procedures. Third, contact that Wenzhou boss and develop him into our first overall solution client."
Zhao Weiguo quickly took notes: "How is the price determined?"
"There are different tiers," Lingyun said. "Tier 1: Software only, 28,800 per set, including maintenance. Tier 2: Software plus consultation, helping clients plan their store opening, 50,000 per set. Tier 3: All-inclusive, from scratch to opening, 15% service fee based on total investment, starting from 80,000 per set."
"Do we have to use our equipment?"
"I'll give him priority. I can offer a discount, but it's not mandatory," Lingyun said. "The key is to help him succeed. If he succeeds, he'll introduce more clients."
"What about the internet cafe over there..."
"Promote a store manager," Ling Yun said. "You can focus your main efforts on new businesses. Internet cafes are testing grounds; all new equipment, systems, and operating methods should be tested here first, and then packaged and sold after they've proven successful."
"And there's the game," Ling Yun added. "The Star System needs a dedicated game. We're in talks with Valford about Half-Life, and a few others. Internet cafes can serve as testing grounds for new games. Player feedback will go directly to the development team."
"Shouldn't we need to sign an agreement?"
"Of course. But that's a matter for later." Ling Yun stood up. "You get started. Within a week, I need to see a productized solution for the management system. Within a month, I need to see a prototype of the overall solution. Budget... approve 200,000 yuan initially, and you submit the report."
"Okay." Zhao Weiguo also stood up, clearly more motivated.
The two went downstairs. The lobby was more crowded, and the sound of keyboards clattering filled the air.
Lingyun walked up to a machine and observed the user. A student was using QQ to chat; the interface was rudimentary, but the typing speed was very fast.
"How's the internet speed?" Lingyun asked.
"It's alright," the student said without turning around, "but sometimes the connection drops."
Zhao Weiguo explained in a low voice, "The dedicated line from the telecom company costs 8,000 yuan a month, with a bandwidth of 2M. It's still not enough."
"It will be even more expensive in the future," Ling Yun said. "Therefore, the management system needs to be able to intelligently allocate bandwidth, prioritizing games and limiting download speeds. Servers need to be installed to download common games so that players can download them within the local area network."
"It's already being done."
As they reached the door, Zhao Weiguo asked, "Brother Yun, how big do you estimate this business could become?"
"It depends on how fast," Ling Yun said. "How many internet cafes are there nationwide now? Several thousand. How many are added each year? Several hundred. If we can secure overall solutions for 10% of the new stores, plus renovations for some older stores, we can do dozens of deals a year and generate tens of millions in revenue."
"What about the profit?"
"Software and services have high gross margins, while equipment has lower gross margins but higher sales volume," Ling Yun said. "Overall, a net profit margin of 30% should be achievable."
Zhao Weiguo did the math: "That would earn several million a year."
"More than that," Ling Yun said, "More importantly, through this solution, we can control the downstream channels. All internet cafes using our solution will by default recommend Starlight computers, pre-installing the Starry Sky system, becoming our promotional nodes. This value is far greater than direct profits."
"I understand," Zhao Weiguo nodded. "This is about ecology."
"Yes." Ling Yun patted him on the shoulder. "Do a good job. If this succeeds, the business unit can be independently accounted for, and may even be spun off into a subsidiary in the future, with you holding shares."
Zhao Weiguo didn't speak, but his eyes said it all.
Leaving the internet cafe, Lingyun walked onto the street. Winter in Jinan is cold; the wind stung his face.
He glanced back at the Xinghuo Internet Cafe sign. Blue background with white lettering, simple and unadorned.
A year ago, this was an experimental field. Now, it's becoming an incubator.
The management system generates revenue, the solutions generate service revenue, and internet cafes sell equipment.
One link leads to another.
The internet cafe initiative, though seemingly small, is actually crucial. It connects hardware, software, content, and distribution channels, serving as the offline pillar of Spark Technology's ecosystem.
The phone rang; it was Li Mo.
"Mr. Ling, Dell has given us feedback. Miller sent an email saying the optical mouse test data is good, and they'd like to schedule a conference call next week to discuss possible cooperation models."
"Okay," Ling Yun said. "Get ready and refine the cost optimization plan further."
"Also, Alex said that the C3 motherboard design has made a breakthrough, and the cost is expected to be reduced to $43."
"Let him continue."
After hanging up the phone, Lingyun hailed a taxi.
"Where to?" the driver asked.
"The train station," he said.