Not totally joking. Undercapitalization is a major mistake of most startups
including WISPs. You need money to make money.
Make a month-by-month plan for your first 2 years and do a cashflow
spreadsheet. Set targets for how many installs you plan to do each month, how
much you revenue you will generate, how much you need to spend on equipment and
recurring expenses. Set milestones for when you can fund growth from cashflow,
when you have repaid your initial investment or loans, when you need to add
staff and will the money be there, etc. Review progress each month and adjust
as necessary. But this will help you avoid being underfunded to achieve your
goals, or not reaching profitability in a reasonable timeframe. It’s too easy
starting out to use a simple calculation like I’m paying $500/month for
bandwidth and I charge $50 so once I get to 10 customers I’m profitable. Then
a year later you’re at 100 customers which seems like success, but you have
maxed out your credit cards and aren’t drawing a salary and can’t hire a full
time installer, and you need major network upgrades and don’t have the cash.
Also while you don’t need to budget every penny, you need realistic estimates
of all your costs, not just the big, obvious ones. Like assuming you take
credit cards, some of the revenue will go to processing fees and “discount”.
You will have some bad debt from customers who don’t pay, and you will have
some churn if only because people move, get divorced, and die. You will go
through supplies like cable and hardware for installations, and you will spend
a certain amount on maintenance. You will have costs like insurance and
lawyers and accountants and postage and utilities. At least come up with a
rough number for these, and refine based on experience.
If you use your own vehicle, at least pay yourself the IRS standard amount for
mileage.
Find another WISP nearby and make an arrangement to cover for each other in
case of sickness or just so you can get away for a few days.
Decide what your business hours are and how to handle calls outside business
hours. Also decide on a way to notify customers if you have a major outage so
you aren’t answering the phone when you should be working on a problem. For
example, a message on your voicemail.
Train your customers from day one. For example, let calls go to voicemail
after hours and call them back, or they will assume they can call any time of
day or night. Or if you say you will suspend service when payment is X days
late, do it. If they never get to expecting things, they won’t be pissed off
when you take them away. Like Trevor used to answer his cellphone at all
hours, now I have to call the office and leave a message. Or the service has
really gone downhill, I used to get 20 meg speeds now I only get 10 (even
though they are on a 5 meg plan). Or I used to wait 3 months and then pay up,
now if I’m 5 days late, they cut me off. Better to set their expectations
early.
From: Jeremy
Sent: Tuesday, January 06, 2015 6:34 PM
To: af@afmug.com
Subject: Re: [AFMUG] New WISP
Have a million dollars. Cash.
On Jan 6, 2015 5:23 PM, "Josh Luthman" <j...@imaginenetworksllc.com> wrote:
Get a billing system. Powercode or whatever.
Don't finance customers that can't pay up front, wastes billing time instead
of installing more customers.
Don't use your cell phone for the office. Get a hosted PBX. Close the shop
so you don't get burnt out, have other people and or a call center.
Josh Luthman
Office: 937-552-2340
Direct: 937-552-2343
1100 Wayne St
Suite 1337
Troy, OH 45373
On Jan 6, 2015 7:21 PM, "Trevor Bough" <trevorbo...@gmail.com> wrote:
Hi guys, long time listener, first time caller. I'm looking at starting a
new rural WISP and was wondering if you guys could share some of the things you
wish you had known when you started out. Things to absolutely stay away from,
things that you didn't think of first, but made your life 10x easier, etc. Any
info would be greatly appreciated!
