Fixed Wireless: A Method
For Broadband Internet Access Part 2:
Business Basics—continued

Revenue projections

After you've researched and refined your list of fixed and recurring expenses, most of the time-consuming work is done—it's time for some real fun. Dust off your crystal ball and shuffle the tarot cards—let's project your revenue!

To get started, list each of the fixed wireless service plans you intend to offer and each corresponding monthly fee on your spreadsheet. Next, determine a reasonable growth-rate for each fixed wireless service. Finally, project each services monthly growth—just like you did while calculating your recurring expenses.

You'll need to factor in your anticipated growth-rate for each fixed wireless service plan you intend to offer. Remember, your monthly expense projections should increase in accordance with your revenue projections as you add new customers.

You might be asking yourself a few questions as you work your way through your business plan. For example, "does anyone know how many clients your service will really attract," or "how can your calculations and projections possibly be of any help?"

Trust me, you know your market better than anyone else, so you'll naturally project intelligent estimates for your fixed wireless business. Even your "best guess" is better than building a fixed wireless Internet program without a business plan to guide it toward profitability.

Certainly, there are other ways to determine what your potential revenues will be. For example, you could drop a simple survey in the mail and gather data about potential wireless customers in your service area or post a detailed survey on your Web site if you already operate a wired Internet service.

Of course, you could scout the geography of your service area in search of the perfect access point for your WPoP and select 10 potential business clients to contact that will have Line-of-Sight (LoS) to your proposed access point.

You might want to consider hiring an outside firm to review your budget or help prepare a professional business plan. A consultant can provide a "reality check" of your spreadsheet or compile your business plan from start, to finish. Just make sure you budget consulting fees into your fixed expenses of the business plan.

In the beginning, my ISP hired an outside firm and the consultant helped spot missing items I overlooked—like insurance and property taxes. In my case, hiring a business consultant helped reassure me that I was wholly prepared to launch my fixed wireless program from solid financial ground. Only you can determine how confident you are with your business plan before you take it to the bank.

Putting it all together
Once you have accounted for anticipated expenses and projected revenues, you can determine when your fixed wireless ISP will "break-even." It might be three months, or it could be three years—depending on your profit expectations. Remember, only you can decide how long you can afford to loose money.

If you're satisfied with your business plan, then you should be pleased with when your fixed wireless ISP will start to show a profit. If you're not happy with the timetable, then now would be a good time to reevaluate your revenue projections.

A good business plan is your path toward profit. Only you can determine how much financing you'll need to take your fixed wireless venture out of the red and into the black.

Remember this fundamental rule—a good business starts with a good business plan. When you are armed with a thoughtful, legitimate business plan you are ready to start spending your money on the fixed wireless gear required to build your first WPoP.

Congratulations—now you're ready to learn about the ins and outs of network capacity planning and scalability so you can build a fixed wireless system in line with your profit projections.

In the third part of our series, we'll discuss the technical side of building a rock-solid fixed wireless network. Until then, you've got a business plan to prepare—you better have at it!

Back to page 1: Business Basics

—End