I think it's a combination of both ways of looking at things. For projections & planning, you MUST figure out your cost per sub and watch that. That said, hooking up a sub next week doesn't cost you ANYTHING more for tech support or bandwidth or whatever until you have to pay for more of those.
Mark Nash UnwiredOnline.Net 350 Holly Street Junction City, OR 97448 http://www.uwol.net 541-998-5555 541-998-5599 fax ----- Original Message ----- From: "Marlon K. Schafer" <[EMAIL PROTECTED]> To: "WISPA General List" <wireless@wispa.org> Sent: Friday, November 30, 2007 10:07 AM Subject: Re: [WISPA] What basic ROI do you target? > In my mind, it all has to be counted. At the end of the day each customer > has a fixed cost. Breakeven happens when any revenue ABOVE those fixed > costs has paid back any customer acquisition costs. > > I don't think it's honest to say that one breaks even when counting 100% of > the monthly customer revenue. There are tech support costs, bandwidth > costs, billing costs etc. that are added with every new customer. And, as > you say, at some point extra people have to be added to the company and that > cost gets spread over all subs. > > laters, > marlon > > ----- Original Message ----- > From: "Jeff Broadwick" <[EMAIL PROTECTED]> > To: "'WISPA General List'" <wireless@wispa.org> > Sent: Friday, November 30, 2007 5:34 AM > Subject: RE: [WISPA] What basic ROI do you target? > > > > That's an interesting way of calculating the ROI. > > > > You could also take out fixed costs from your calculations and only add in > > those (variable) costs that relate directly to the new sub. If you aren't > > adding staff or getting a bigger office, you wouldn't need to factor those > > costs into the calculation. > > > > Jeff > > > > > > > > -----Original Message----- > > From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On > > Behalf Of Marlon K. Schafer > > Sent: Thursday, November 29, 2007 9:47 PM > > To: WISPA General List > > Subject: Re: [WISPA] What basic ROI do you target? > > > > For AP's it's ok if I pay them off in 3 to 4 years. I try to do 4 year > > loans for all hardware. > > > > For CPE this gets more complicated. Everyone wants to count gross income > > from that customer to pay off the gear. That's really not right though as > > every customer has a cost to them. > > > > We use NET revenue to figure out payback times. I ran about a 20% margin > > last year, it'll be higher than that this year but I don't have the > > numbers > > yet so I'll stick with the easy number. At an average of $37.5 per sub we > > figure it out at $8ish per sub per month. We loose $50 to $100 per > > installation. It's a bit better than that right now as the hardware has > > come down a bit but we're holding the installation costs up. > > > > So I'm in the 7 to 13 month time frame to go cash flow positive on each > > customer. > > > > Our growth rates are running over 25% per year so this time lag can be a > > real issue. In fact, it's probably THE hardest thing for us to manage. > > laters, > > marlon > > > > ----- Original Message ----- > > From: "Patrick Leary" <[EMAIL PROTECTED]> > > To: "WISPA General List" <wireless@wispa.org> > > Sent: Thursday, November 29, 2007 4:35 PM > > Subject: [WISPA] What basic ROI do you target? > > > > > > I am curious about how divergent the responses may be. In your answer, > > include just the cost of the truck roll and CPE measured against any > > set-up and service initiation fees charged with the monthly subscription > > fee. > > > > Years ago, it was not uncommon for WISPs to say they need a 24-month > > basic return per subscriber. These days I suspect most will say under 9 > > months. > > > > Patrick Leary > > AVP, Market Development > > Alvarion, Inc. > > o: 650.314.2628 > > c: 760.580.0080 > > [EMAIL PROTECTED] > > > > > > > > > > **************************************************************************** > > ******** > > This footnote confirms that this email message has been scanned by PineApp > > Mail-SeCure for the presence of malicious code, vandals & computer > > viruses(84). > > **************************************************************************** > > ******** > > > > > > > > > > > > > > > > **************************************************************************** > > ******** > > This footnote confirms that this email message has been scanned by > > PineApp Mail-SeCure for the presence of malicious code, vandals & computer > > viruses. > > **************************************************************************** > > ******** > > > > > > > > > > > > -------------------------------------------------------------------------- -- > > ---- > > WISPA Wants You! 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