pdg2
join:2005-10-19
Waterford, MI
| reply to bcbuie
Re: ROI
Since $600 of equipment isn't covered in 24 months at $20/month, I assume the remaining $120 is paid for when the equipment is installed? + an install fee to cover the time cost as well? Otherwise it seems like even with the monthly fee the GROSS profit on one user over 12 months at $30/mo is $360 - $120 = $240 - infrastructure costs of say 20%, to net possibly $198 per year on a user? And we haven't even counted the personal time to get the account running.
Granted, if the user cancels you get the gear back less the costs to dismantle it, but you are paying carrying costs on the equipment balance all that time.
I just did an Excel budget. With 122 users in 17 months it shows NET monthly figures (on just the residential users) of $3387 with:
$32.95/user + $199 install fee
less
$240 cost for CPE and install
$633/mo for monthly recurring support costs
$32.95 x 122 = $4019 - $633 = $3387
but for every new user that gets installed, we lose $41 + install costs, which takes about 3 months of the sub fee to pay off.
So it seems like one really needs to get to over 300 users to make this into a real business. |
