Before starting a WISP business the entrepreneur should prepare an estimate for profit or loss of the business. The estimate will be approximate, but will give an indication about proposed WISP business being viable.
It is likely that business plans will change when the business is operational and the WISP discovers where the real demand for services is located, or subscribers wish to pay for a service that is different to those that the WISP was planning to offer. A start up business should always be very flexible and be ready to pivot in a different direction as feedback is received from prospective customers.
The profit/loss #calculation is an on-going process that is adjusted and updated with each change in the business direction to support quick decisions about business changes.
Prepare a profit or loss table like the one shown next for the estimated monthly income and monthly costs. Determine if the estimates show that the business will generate a #profit or #loss. The estimate for the profit or loss statement will indicate if the #WISP #startup is a good business idea.
If the business can generate a profit, calculate the time taken to amortize (recover) the initial #investment. This is the time taken for the amount of profit obtained to equal the amount of money that was invested to start the business. The table shows how the amortization is calculated.
The business might be profitable but if the initial investment is so large that the amortization takes several years then starting the WISP business may not be a good plan. Most WISPs’ make the minimum possible investment to start the business and begin receiving income. The WISP will then allocate a percentage of monthly profits towards building out the network to support more subscribers while the sales staff is attracting new subscribers.
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