5. PRODUCTS/SERVICES
5.1 Product/Service Descriptions
- Internet café offering customers the opportunity to send and retrieve e-mail, make online bookings, do online banking, surf the internet, and access Facebook and other social media
- Customers can pay for the hire of desktop computers, plus the purchase of applicable data time
- Alternatively, customers can bring their own laptops, connect to the on-site Wi-Fi system via a password, and purchase data time
- Playing of offline (disc-based) computer games. Games will be hired by customers at an hourly rate from the business
- Playing of online computer games via the internet
- Coffee/snack bar serving light meals, snacks and non-alcoholic beverages
- Basic computer repairs and maintenance. Jayden Olivier will use his professional expertise to offer a simple menu of services to customers who can bring their computers into the café. At this stage, the business will not offer a call-out service or attempt to resolve more complex problems
- Photocopying, printing and fax service
- Free information board. This will include weather and surf conditions, places to stay, entertainment venues and attractions, notices of people seeking lifts, selling surfboards, etc.
5.2 Stock Analysis
Type of Stock
Desktop computers; data time for sale; library of computer games for rent; photocopier; facsimile machine; printer; beverages; food; cutlery & crockery for coffee shop/snack bar; selection of basic computer packages for installation to customer computers (anti-virus software, programmes, upgrades); limited range of hardware for use when repairing customer computers (cables, wiring, electronic parts).
Average Stock Value
| 6 x desktops for hire purposes | R24 000.00 |
| Computer game library (for hire) | R 4 000.00 |
| Data for hire | No value prior to sale |
| Computer packages for sale | R 2 500.00 |
| Hardware – repairs to customer computers | R 3 000.00 |
| Beverages for coffee shop | R 1 000.00 |
| Food for coffee shop | R 1 500.00 |
| Photocopying / printing paper | R 100.00 |
| Total | R36 100.00 |
Stock Turnover
| Desktops for hire purposes | Every 5 years |
| Computer game library for hire | Every 2 years |
| Data for hire | — |
| Computer packages for sale | Every 3 months |
| Hardware – repairs to customer computers | Every 3 months |
| Beverages for coffee shop | Weekly (low season) 3 x week (high) |
| Food for coffee shop | 2 x week (low season) 3 x week (high) |
| Photocopy paper | Weekly |
Seasonal Variances
High season: December/January; March/April; July
Shoulder: October; November; February; November
Low: May; June; August; September
Ordering Lead-Time
Variable, according to product and supplier. Computer/IT items sourced from Port Elizabeth or Cape Town – 2 to 5 days. Food & beverage sourced locally – same day to 2 days.
5.3 Technology Usage
| Desktops for hire | 6 |
| Owner’s laptops | 2 |
| High-speed broadband connection | 1 |
| Back-up 3G connection | 1 |
| Generator for back-up power | 1 |
| Wi-fi system | 1 |
| Internet café management software | 1 |
| Anti-virus software | 1 |
| Printer/scanner for computers | 1 |
| Photocopier | 1 |
| Facsimile machine | 1 |
| Fridge | 1 |
| Freezer | 1 |
| Stove | 1 |
| Drinks cabinet | 1 |
| Stock control package | 1 |
| Revenue management package | 1 |
| Cash register | 1 |
| Credit card machine | 1 |
5.4 Supplier Research
Research has been conducted into suppliers within the Jeffrey’s Bay area, as well as in Port Elizabeth and Cape Town (as the nearest medium-size and large cities). The key suppliers in the IT sector are all known to Jayden Olivier through his professional background.
Key Suppliers
| Internet service provider | Internet Konnect, Port Elizabeth |
| Network, hardware & systems back-up | EC Computing, Port Elizabeth |
| Fax, printer photocopier maintenance | Go Rentals, Port Elizabeth |
| Food | Bay Fish & Meat; Lighthouse Bakery;Jeffrey’s Tuisnywerheid |
| Beverage | King of Koffee; EP Farm Fresh Juices;Surf Bottle Store |
Credit Policy
The policy of Big Surf Internet & Lifestyle Café is strictly cash or credit card. The policy of the various key suppliers is as follows:
| Internet Konnect, Port Elizabeth | 30 days |
| EC Computing, Port Elizabeth | 30 days |
| Go Rentals, Port Elizabeth | Annual maintenance contract |
| All others | COD |
History & Reliability
All individuals and organisations listed as key IT suppliers are well established and reliable. Other suppliers can be replaced due to the ready availability of competitors.
Shortages/Unavailability of Skills
The owner and spouse, plus the key suppliers, will provide the required critical skills. Other skills (waitrons, counter assistant, cleaner) are readily available locally.
Cost Fluctuations
Increases are evaluated by all suppliers on an annual basis. However, due to the slow economy and competitive environment, it is likely that these will be minimised or, in some cases, absorbed for the immediate future.
6. MARKET ANALYSIS
6.1 Target Market Description
6.1.1. Internet Café
Males/females aged 18-35, drawn largely (approx 70%) from visitors, particularly the surfing community.
6.1.2. Computer Gaming
Predominantly males, ages 14-25, with approximately 50% drawn from visitors.
6.1 .3. Coffee Shop/Snack bar
Approximately 65% of customers will be drawn from the Internet Café and Computer Gaming segments. The remaining 35% will be drawn from all demographic segments wanting light meals and/or beverages (approximately 50/50 split between locals and visitors).
6.1 .4. Basic Computer Repairs/Upgrades
Bulk of customers (approx. 75%) will be drawn from local residents, with a slight skew towards those aged 40+ who are less familiar/confident with computer systems.
6.2 Market Research
6.2.1. Internet & Related Services Research
No internet café, computer gaming or computer repair services exist in the town or surrounding area. As far as can be ascertained from talking to local residents, the local newspaper editor, and the local chamber of commerce, no such service is being planned by anyone else in the immediate future.
One backpacker facility in town offers a Wi-Fi service. However this is restricted to overnight guests who must also have their own laptop. Many local residents have requested to use the Wi-Fi service, but this is resisted by the owner because of a lack of space on the premises and because his business focus is on the accommodation and adjacent backpackers’ pub.
As already mentioned, internet connectivity is a problem in the area. Permanent residents who have Telkom lines have internet access, but theft of cables, poor cable maintenance and the fact that there is no local Telkom presence means that even they experience regular difficulties. Acceptable 3G coverage is restricted to one suburb and a part of the central shopping area.
The number of young people (18-35) entering the area continues to rise as a result of the ever-increasing popularity of Jeffrey’s Bay as a surfing destination for local and international visitors.
6.2.2. Coffee Bar/Snack Bar Research
There are four coffee bars/snack bars in the area, none of which offer internet/Wi-Fi services. All have existed for at least three years, indicating an acceptable market for this type of food & beverage service. As far as can be ascertained from talking to local residents, the local newspaper editor, and the local chamber of commerce, no similar new businesses are currently planned.
6.2.3. General Research
Visitor numbers have increased by an average of 10% annually for the past three years, while the number of permanent residents has increased by an average of 7% annually for the past three years (source: Kouga Municipality: Regional Planning Strategy, Vision 2010-2020. Published September 2009).
Jeffrey’s Bay is now established as one of the world’s top five surfing destinations, and will continue to attract large numbers of visitors well beyond 2015. As a whole, world ‘surfing tourism’ grew by an estimated 15% between 2005 and 2010 (source: Prospects for Surfing in South Africa, published by Surfing SA, June 2010). This offers good prospects for the continued growth of the local economy.
6.3 Market Trends
See above for trends regarding visitors and growth.
