Charles, your numbers are WAY off there. We run about a 20% margin and gross less than $30,000 per month. We're at a bit over 500 subs at an average of $37.50 per month. That's high for our here.
Our tax return doesn't show 20% for last year because of the bucket truck and new spectrum analyzer purchases. We probably have 2 to 3 x more tools available to us than 95% of the companies our size. Those purchases have certainly impacted our margins, but they've helped us run a very very good network on a shoe string. Here's an even more important question though. How many people does it take to run a WISP? That too will vary some due to distances traveled by people. But things should be close. Chuck Profito has nearly 1000 subs but he's only got to cover 1100 square miles or so. I have just over 500 but i have over 7000 square miles to deal with. Chuck is still running with 2 people. He does mostly sales, his partner does much of the rest. I do sales (mostly word of mouth) and all tech stuff that happens outside of the office. We have the equivalent of just over 1 full time office person (three people doing the work part time) to handle billing, initial tech support, payables etc. By the time I hit 600 to 800 subs I'm gonna need some help. Hiring that person will suck big time because I won't have enough work for them right away. That move alone will likely cut my margin down to nearly nothing for a couple of years. Laters, marlon ----- Original Message ----- From: "Charles Wu" <[email protected]> To: "WISPA General List" <[email protected]> Sent: Saturday, May 23, 2009 8:07 PM Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital Availability > Hi Scott, > > Regarding debt...I've found that there's a "scale inflection point" in > running a WISP (or any business for the matter) that needs to be > reached -- the main purpose for taking on debt (because due to interest, > you end up paying more in the longer term instead of buying cash), is to > accelerate growth so one can progress beyond this point > > e.g., if you can organically fund 30 new installs a month with cash, if > you take on debt, you could leverage yourself and now do 100 installs / > month > > Now, from a business perspective -- in looking at the WISP > > As a stand-alone sustainable business -- it costs a minimum of about $30k > / month to operate a small WISP -- now, I'll argue that that $30k/month in > operations remains relatively constant and whether it's supporting 300, > 800 or 1500 customers -- however, at 300 customers, the business is > bleeding cash...at 800 customers the business is just about at a > break-even, and at 1500 customers, the business is a cash machine > > -Charles > > -----Original Message----- > From: [email protected] [mailto:[email protected]] On > Behalf Of Scott Reed > Sent: Saturday, May 23, 2009 4:20 PM > To: WISPA General List > Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital > Availability > > So I will take option 4 from a previous post since Travis made the point. > "Up to 60 months with $1 buyout is the same as a 5 year bank loan." > I want to run debt free as soon a possible. That being the case I don't > lease and have not leased to keep debt down. I do have a start-up loan > that is being paid on a little slower than I would like, but we have > paid off 1/2 of it in < 5 years and based on our payments, we are cash > flow positive. > Granted, my WISP is a lot smaller than many that post here and our > growth rate is small, but some of that is managing growth to stay > cash-flow positive. > I have seen several companies die because they became cash rich, but > still could not cover the debt. > > Travis Johnson wrote: >> The banks can sell a car with little effort. They already have >> relationships with dealers and auctions. And often, if the consumer's >> credit is questionable, the dealer will guarantee to take the car back >> if the loan defaults. >> >> Who is going to buy a $10,000 radio that has been repo'd? Even for >> $5k, I wouldn't touch it. I'd buy a new radio with warranty, that I >> know is good and hasn't been fried or broken. >> >> The banks will never loan on the equipment alone. There is no security >> there... but again, why do you need a bank loan for equipment when you >> can just lease it and get the same results? Up to 60 months with $1 >> buyout is the same as a 5 year bank loan. What's the difference? >> >> Travis >> Microserv >> >> Tom DeReggi wrote: >>> Maybe when talking about CPE. >>> >>> But what about when one is talking about a $10,000 Part101 radio? >>> >>> Just like a car, all that the lender should need is to "hold the title" >>> of >>> the radio until paid off, and get a down payment of $2000 to cover the >>> cost >>> of tower climber/repo man, and a signed letter of authorization from >>> lanlord >>> stating the location of the tower gear is installed on and they >>> acknowledge >>> that the gear is not abandoned equipment. (So it does not automatically >>> become property of landlord in 4 months, and teh landlord knows the >>> equipment owner has first rights to the gear). >>> >>> Think about it... Wouldn't repo costs be reduced when the repo man knows >>> exactly where to find the radio? A car can easilly be relocated and >>> hard-to-find, when the owner skips town. >>> Plus the home likely has an owner with a shot gun or a big dog, which >>> the >>> tower/MTU likely does not. The MTU building might even have a security >>> guard to escort teh lender safely to the roof :-) >>> >>> >>> Tom DeReggi >>> RapidDSL & Wireless, Inc >>> IntAirNet- Fixed Wireless Broadband >>> >>> >>> ----- Original Message ----- >>> From: "jp" <[email protected]> >>> To: "WISPA General List" <[email protected]> >>> Sent: Friday, May 22, 2009 11:13 AM >>> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >>> Availability >>> >>> >>> >>>> In a worse case scenario, a car is probably considerably easier to repo >>>> than the antenna on my roof and radio in my attic. And the car would be >>>> worth a magnitude more money. The installed infrastructure is worthless >>>> if it costs a huge amount to get to it. >>>> >>>> On Thu, May 21, 2009 at 07:27:09PM -0400, Tom DeReggi wrote: >>>> >>>>> I've never found a lender willing to lend against using the in-place >>>>> used >>>>> equipment as colladeral. >>>>> It is the biggest double standard. >>>>> I find it highly ironic that they'll use a car for colladeral that >>>>> looses >>>>> 50% of its value the day it leaves the lot, and has a rate of failure >>>>> and >>>>> risk of damage higher than just about any product on the market, and >>>>> it >>>>> has >>>>> a huge cash burn (gas :-). but yet lendors won't put equivellent value >>>>> on >>>>> wireless gear, that holds its value, Ebay boasting easilly 50% after >>>>> 3-4 >>>>> years of use, even after fully depreciated. >>>>> I'll never understand the lending market. >>>>> >>>>> Tom DeReggi >>>>> RapidDSL & Wireless, Inc >>>>> IntAirNet- Fixed Wireless Broadband >>>>> >>>>> >>>>> ----- Original Message ----- >>>>> From: <[email protected]> >>>>> To: "WISPA General List" <[email protected]> >>>>> Sent: Thursday, May 21, 2009 1:55 PM >>>>> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >>>>> Availability >>>>> >>>>> >>>>> >>>>>> Answers in-line. >>>>>> >>>>>> >>>>>> ++++++++++++++++++++++++++++++++ >>>>>> <insert witty tagline here> >>>>>> >>>>>> ----- Original Message ----- >>>>>> From: "Charles Wu" <[email protected]> >>>>>> To: "WISPA General List" <[email protected]> >>>>>> Sent: Thursday, May 21, 2009 8:49 AM >>>>>> Subject: [WISPA] Quesiton on Funding / Financing / Capital >>>>>> Availability >>>>>> >>>>>> >>>>>> >>>>>>> With all the hype being generated by the stimulus bill, we have been >>>>>>> approached by a multitude of third party financial organizations >>>>>>> that >>>>>>> have >>>>>>> a renewed interest in potentially financing rural broadband...now, >>>>>>> specifically, for WISPs, in the past, equipment leasing has been a >>>>>>> very >>>>>>> popular option for financing, but in looking at our numbers over the >>>>>>> past >>>>>>> year, I've noticed a marked decline in the amount of leasing that we >>>>>>> do - >>>>>>> that said, I have the following questions for the listserv about >>>>>>> financing >>>>>>> >>>>>>> Assuming that WISPs are still need to buy equipment... >>>>>>> >>>>>>> 1. Are you able to just purchase equipment out of cash-flow >>>>>>> organically >>>>>>> generated from operations >>>>>>> >>>>>> Other than originally starting with our own personal seed money, >>>>>> that's >>>>>> what >>>>>> we've done. >>>>>> >>>>>> >>>>>>> 2. Have you gone to more traditional forms of money (e.g., bank / >>>>>>> SBA >>>>>>> / >>>>>>> RUS loans)? >>>>>>> >>>>>> I could not qualify for any of them. >>>>>> >>>>>> >>>>>>> 3. Are you doing more vendor leasing programs (e.g., Motorola 3% >>>>>>> financing >>>>>>> deal) >>>>>>> >>>>>> Never sought any. >>>>>> >>>>>> >>>>>>> 4. Have you not been able to borrow money due to the credit crunch >>>>>>> (e.g., >>>>>>> not deploying as aggressively) >>>>>>> >>>>>> My corporation hasn't ever been able to obtain hard money credit. >>>>>> In >>>>>> fact, the "credit crunch" start last Fall raised my "30+ day past >>>>>> due" >>>>>> amount from a piddly $1200 to at one time to almost $13,000 in just >>>>>> four >>>>>> months. That almost put us under, and we're still barely scraping >>>>>> by >>>>>> until >>>>>> our seasonally variable cash flow revives come August, with still >>>>>> several >>>>>> thousand on the books that's very slowly getting chipped away at. >>>>>> >>>>>> >>>>>>> 5. Are you holding off on deployments because of the economy >>>>>>> >>>>>> No, we're holding off due to lack of cash flow. We have plenty of >>>>>> people >>>>>> waiting for us to build infrastructure out to them. >>>>>> >>>>>> >>>>>>> 6. Have you gone to Agility...<cough> Louie the loanshark =) >>>>>>> >>>>>> After much discussion, being some of the first people Agility >>>>>> contacted, >>>>>> we >>>>>> have not done any business with them. In my estimation, they wanted >>>>>> control over our business and day to day decisions, which we >>>>>> concluded >>>>>> was >>>>>> both unwarranted and unwise. >>>>>> >>>>>> >>>>>>> Or any other thoughts / comments on this topic? >>>>>>> >>>>>>> >>>>>> WISP equipment is not really a "commodity" in that there is almost no >>>>>> market >>>>>> for it outside of the "maker-vendor" relationship. Other than Ebay, >>>>>> and a >>>>>> couple of people who attempt to do it piecemeal, there is no "market" >>>>>> which >>>>>> stabilizes the value of used equipment, making them a commodity you >>>>>> can >>>>>> borrow against. >>>>>> >>>>>> Perhaps it would be more useful, if vendors had the ability to get >>>>>> capital >>>>>> and create stable working and short term credit relationships with >>>>>> their >>>>>> buyers, kind of like the used car market. >>>>>> >>>>>> >>>>>> >>>>>> >>>>>>> -Charles >>>>>>> >>>>>>> >>>>>>> -------------------------------------------------------------------------------- >>>>>>> WISPA Wants You! Join today! >>>>>>> http://signup.wispa.org/ >>>>>>> -------------------------------------------------------------------------------- >>>>>>> >>>>>>> WISPA Wireless List: [email protected] >>>>>>> >>>>>>> Subscribe/Unsubscribe: >>>>>>> http://lists.wispa.org/mailman/listinfo/wireless >>>>>>> >>>>>>> Archives: http://lists.wispa.org/pipermail/wireless/ >>>>>>> >>>>>> -------------------------------------------------------------------------------- >>>>>> WISPA Wants You! Join today! >>>>>> http://signup.wispa.org/ >>>>>> -------------------------------------------------------------------------------- >>>>>> >>>>>> WISPA Wireless List: [email protected] >>>>>> >>>>>> Subscribe/Unsubscribe: >>>>>> http://lists.wispa.org/mailman/listinfo/wireless >>>>>> >>>>>> Archives: http://lists.wispa.org/pipermail/wireless/ >>>>>> >>>>> -------------------------------------------------------------------------------- >>>>> WISPA Wants You! Join today! >>>>> http://signup.wispa.org/ >>>>> -------------------------------------------------------------------------------- >>>>> >>>>> WISPA Wireless List: [email protected] >>>>> >>>>> Subscribe/Unsubscribe: >>>>> http://lists.wispa.org/mailman/listinfo/wireless >>>>> >>>>> Archives: http://lists.wispa.org/pipermail/wireless/ >>>>> >>>> -- >>>> /* >>>> Jason Philbrook | Midcoast Internet Solutions - Wireless and DSL >>>> KB1IOJ | Broadband Internet Access, Dialup, and Hosting >>>> http://f64.nu/ | for Midcoast Maine http://www.midcoast.com/ >>>> */ >>>> >>>> >>>> -------------------------------------------------------------------------------- >>>> WISPA Wants You! Join today! >>>> http://signup.wispa.org/ >>>> -------------------------------------------------------------------------------- >>>> >>>> WISPA Wireless List: [email protected] >>>> >>>> Subscribe/Unsubscribe: >>>> http://lists.wispa.org/mailman/listinfo/wireless >>>> >>>> Archives: http://lists.wispa.org/pipermail/wireless/ >>>> >>> >>> >>> >>> -------------------------------------------------------------------------------- >>> WISPA Wants You! Join today! >>> http://signup.wispa.org/ >>> -------------------------------------------------------------------------------- >>> >>> WISPA Wireless List: [email protected] >>> >>> Subscribe/Unsubscribe: >>> http://lists.wispa.org/mailman/listinfo/wireless >>> >>> Archives: http://lists.wispa.org/pipermail/wireless/ >>> >>> >> ------------------------------------------------------------------------ >> >> >> >> -------------------------------------------------------------------------------- >> WISPA Wants You! Join today! >> http://signup.wispa.org/ >> -------------------------------------------------------------------------------- >> >> WISPA Wireless List: [email protected] >> >> Subscribe/Unsubscribe: >> http://lists.wispa.org/mailman/listinfo/wireless >> >> Archives: http://lists.wispa.org/pipermail/wireless/ >> ------------------------------------------------------------------------ >> >> >> No virus found in this incoming message. >> Checked by AVG - www.avg.com >> Version: 8.5.339 / Virus Database: 270.12.36/2128 - Release Date: >> 05/22/09 06:03:00 >> >> > > -- > Scott Reed > Sr. Systems Engineer > GAB Midwest > 1-800-363-1544 x4000 > Cell: 260-273-7239 > > > > -------------------------------------------------------------------------------- > WISPA Wants You! Join today! > http://signup.wispa.org/ > -------------------------------------------------------------------------------- > > WISPA Wireless List: [email protected] > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > -------------------------------------------------------------------------------- > WISPA Wants You! Join today! > http://signup.wispa.org/ > -------------------------------------------------------------------------------- > > WISPA Wireless List: [email protected] > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ -------------------------------------------------------------------------------- WISPA Wants You! 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