Let me ask you this though... Would you rather
1) Buy $5,000 worth of Canopy equipment per month at 25 installs per month (new $1,250 in revenue at $50/mth) - Or - 2) Obtain a lease at $3,000 per month for 100 installs per month ($5,000 in revenue at $50/mth). Essentially, you are putting $2k in the bank after paying $3k on the lease for 12 months then $5,000 per month after that. Take this as being done over 2 years. Option 1 has 600 customers paying $50 per month at $30k per month and is debt free. After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth 360k. Option 2 has 2400 customers paying $50 per month at $120k per month and is in debt (based on a rotating amortization schedule) in debt only $110k (doing it in my head, it's approximate). After two years, if you were to attempt to value your company at $500-600 per sub, your company is worth $1.2 Million with a debt of $110k net $1.1 Million. These are based on $50 per month averages, some of you are more, some of you are less. I learned this lesson from a friend of mine who told me the local cable co. is leasing every piece of equipment that goes to a customer. That way they are never operating on negative cashflow while maximizing available customers. Before I started leasing, I was Option 1. After leasing, our available cash has increased greatly offering many company benefits, like increasing our footprint, new vehicles, etc. We pay for about half our monthly equipment by leasing. Regards, Chuck Hogg Shelby Broadband 502-722-9292 ch...@shelbybb.com http://www.shelbybb.com -----Original Message----- From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On Behalf Of Mike Sent: Sunday, November 08, 2009 10:16 PM To: WISPA General List Subject: Re: [WISPA] CPE - who buys it? Oh heck no. My balance sheet looks awesome; no debt; positive cash flow. Mike At 03:56 PM 11/8/2009, you wrote: >Do you feel it has a negative affect on your companies value if you dont own >the CPE? > >On Sun, Nov 8, 2009 at 3:50 PM, Michael Baird <m...@tc3net.com> wrote: > > > You don't have to pay property tax on the CPE. You don't have to go pick > > up the device if the customer quits. You can charge the customer for > > replacement radios. You can offer a value add-on product such as modem > > insurance. > > > > Regards > > Michael Baird > > > I've always provided the CPE to the end user and retained ownership as > > part > > > of the service. That was mostly due to the high cost of CPE in the past. > > > With the advent of lower CPE cost, I'm considering changing that to where > > > the customer buys their own CPE. I'd like to hear the pros and cons to > > this > > > strategy. > > > -RickG > > > > > > > > > > > > ------------------------------------------------------------------------ -------- > > > WISPA Wants You! Join today! > > > http://signup.wispa.org/ > > > > > > ------------------------------------------------------------------------ -------- > > > > > > WISPA Wireless List: wireless@wispa.org > > > > > > 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: wireless@wispa.org > > > > 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: wireless@wispa.org > >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: wireless@wispa.org 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: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
