It is the decision that David Grant wants to make about opening an Internet Café in Jamaica, the Caribbean islands. Internet Cafes has been popular in other places around the world and based on his exposure from his MBA program in London, he is contemplating about this business opportunity in Jamaica.
2. What are the key facts and data?
David has been contemplating about venturing in to a business opportunity for a while. He is doing his MBA to equip himself and has keen interest in entrepreneurship.
The concept of Internet café has been already proved in other areas of the world to be a successful business model. Even though it is an emerging area, there are enough pointers to show that it is a good revenue-generating concept.
In Jamaica where David wants to start the business there is a high awareness about Internet. But the challenges are accessibility to the Internet for the people living in Jamaica. David wants to capture this opportunity and wants to establish his business there.
3. Conduct other analyses that might provide additional information (economic, financial, strategic, qualitative, etc.)
Access to Internet in Jamaica was difficult.
The cost to access the Internet was very high; the average hourly rate for the local service was $90.
There was no café that was serving as Internet Café in Jamaica yet. Even though there were other cafes turning them to an Internet café was not easy and expensive proposition.
David has to consider three categories of costs: Start up costs required to be invested in the business, fixed monthly costs that are to be bore as result of operations and variable costs, that result with every customer visit to the café. Let us assume that loan from JTL of $1,250,000 is a 5 year loan with principal payable on maturity and 10% simple interest payable monthly.