The problem with Leasing, is that you ahve to keep your clients longer than your leases. Historically, WISPs make logrithmic growth with each year having more growth than the year before. Usually the profit from old business (subs with paid off leases), rarely covers costs of growth, as the growth in later years is so much grander. Sure leasing helps growth and makes the books look good. But what happens in your last year? The one where you potentially could loose all your subs? The year that you just had your largest growth, and largest amount of dollars on Leases for reoccuring liabilities. Will your business then last 3 more years to pay off those leases? The problem with Finance, is it gives people a fake sense of success, and while deferring payment, it allows upfront moneys to be spent more wastefully because it is there to spend. There is always a grand plan of how that money will be used to improve business, but do things always work the way they are planned, and do you ghet your money's worth? There is something to be said for the business man that believes in old fasion values of a dollar earned and a dollar that can be spent, apposed to spending tommorrows dollar today and deferring todays liabilties to tommorrow. It order not to loose your butt leasing, one must predict accurately the date of their end came, so they know when the leases have to be paid off. What if you aren't bought, as predicted at the end game? One of the things I've learned is that when you are eating fat (money available), people get lazy. When you are hungry and wondering how you are going to pay tommorrow's bill, all a sudden their is an urgency to succeed that not only is urgent but essential. Its amazing what a person can accomplish when they are backed against the wall and have no choice but to do it. Its amazing how much someone can save when they ahve a tight budget to conform to, and they know when the money is gone the money is gone. Wether it makes sense to lease is not the golden question. The golden question is, how will you spend the money that becomes available because you leased. That is what will seperate the winners from the loosers.

One of the most basic concepts there is in accounting is, its much more beneficial to reduce your costs $100, than to make $100 more income, because the $100 income have additional costs that grow with it. I think leasing makes sense if you get good terms, and are short on cash flow, but if you are not frugal in spending along the way, one is just deffering their death by leasing.

Whats important is that the money spent, has something tangible and of value (holds its value on a reoccuring basis). Things like high salaries that are spent and gone, or technology greater than one's need in a business with falling prices and rapid advancement, are monies spent that have little value after the fact.

Disclaimer, this comment does not negate the importance to determine the amount of capitol (cash) that will be needed and securing it before progressing with a business plan.

Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband


----- Original Message ----- From: "Rick Smith" <[EMAIL PROTECTED]>
To: "'WISPA General List'" <wireless@wispa.org>
Sent: Tuesday, October 17, 2006 3:48 PM
Subject: RE: [WISPA] Are you making money?


exactly the mistake my company made.  Shoulda, woulda, coulda leased...

'cept in NJ, it's $125 contract labor, and $244 for installation (199
install / 45 first month), oh and no free towers, they're all (16 of them)
$500 / month / each at LEAST....

No free lunch.  So to answer the previous question #3, no you will not be
making tons of money - you will be eating your shirt :)

-----Original Message-----
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On
Behalf Of Travis Johnson
Sent: Tuesday, October 17, 2006 3:24 PM
To: WISPA General List
Subject: Re: [WISPA] Are you making money?

Hi,

Although he has spent some time and efforts, many of his numbers are WAY
off:

$50 installs (contract labor)
customers paying $360 for installation
$40 per month ARPU (for a startup WISP is not realistic today with $15 DSL)

Just taking the installation numbers away completely changes this sheet...
we are doing $99 installs and include a free Linksys wireless
firewall/router. So now instead of making $15 per install, he will be losing
$246. So now after 2 years, the company is making $11,736 per month profit
but still shows $42,000 in debt (from the first 2 years) and hasn't paid
anything back to the investors, banks, etc.

Now, if you use the same sheet, lease the CPE ($5/mo per customer) and still
buy the Linksys router for $40, the company is making $18,800 per month
profit and has $98,000 in cash after 2 years. ;)

Travis
Microserv

Brian Rohrbacher wrote:

http://www.dslreports.com/forum/remark,17086669

I have not got to the spreadsheet, but the post was well worth the 5
minute read, and I'm looking forward to getting some numbers down on
the spreadsheet.  I think this could help some of us.

Brian

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