Date: Wed, 7 Feb 1996 11:28:04 -0600 (CST) From: Joe Greco <jgreco@brasil.moneng.mei.com> To: lithium@cia-g.com (Stephen Fisher) Cc: jgreco@brasil.moneng.mei.com, lqaz@ssd.dawsoncollege.qc.ca, freebsd-isp@FreeBSD.org Subject: Re: info Message-ID: <199602071728.LAA19154@brasil.moneng.mei.com> In-Reply-To: <Pine.LNX.3.91.960206212628.10685A-100000@gallup.cia-g.com> from "Stephen Fisher" at Feb 6, 96 09:27:26 pm
next in thread | previous in thread | raw e-mail | index | archive | help
> On Tue, 6 Feb 1996, Joe Greco wrote: > > > To paraphrase the answer a friend of mine often gives when asked about > > starting an ISP... > > > > Take about $50,000. Invest in some office space, installation of several > > dozen phone lines and good 28.8K modems, a T1 Internet connection, a CSU/DSU > > and router, a terminal server, a general purpose UNIX box, an answering > > machine, and some advertising, and you have yourself the basic beginnings of > > a (very) small ISP business. "Still interested?" :-) > > $50k is not a small ISP at all. I agree. $50k is a sum of money. It just happens to be roughly what you might need to spend to start up. (I see you're skeptical). Find a dirt cheap office. Let's say $700/month. Prepay for 3 months because you won't be profitable in those first three months and you'll ultimately end up having to use your start-up investment anyways. Furnish it with the bare essentials. $500. That's $2,600. Buy two dozen Motorola Power 28.8's. That's $5,280 at $220/ea. Install thirty phone lines (remember, you'll need an outgoing data line or two, a voice number or two, a fax number, etc.). Installation will run at least $1,500. Pay a month in advance. That's another $540. Buy an answering machine and fax machine. $200. Let's say $2,300. Install a T1. The upstream service provider will charge $2,900 (alpha.net pricing). The phone company will charge $750. Pay for the first month of service (alpha.net will charge $1,295 if you commit to a year contract, and the phone company can probably be talked down to around $500 for a year contract as well). That's about $5,500. Use a FreeBSD box as a router with ET's sync serial cards. It will cost you $1,000 to build the PC, $795 for the sync serial port, a CSU/DSU will cost about $800, and an Ethernet hub will cost you about $300. $2,900. Build a Pentium FreeBSD box to be used as a general purpose UNIX platform. MB/CPU ~= $600, 32MB RAM ~= $1,000, minimal SCSI disk subsystem = $1,500, plus trinkets ~= $500. $3,600. Build a terminal server. See previous discussions. Could do it for around $1,500. Spend some money on advertising and we're already over the $25,000 mark. What have we accomplished? We have three months of rent paid and one month of telecommunications services paid off. We need to start raising the recurring fees for the T1 ($1,295 + $500) and the phones ($540) within the first month (i.e. $2500) to pay next month's bill. Soon we will also need to be able to pay rent ($700) on a monthly basis. We're not paying anyone to work for us, we have no insurance, no security system, or any value added services whatsoever, we have minimalistic hardware, and we haven't considered any of the other aspects of starting and provisioning a business. If you have two employees (incl. yourself) and pay each $1,500/month, that's an additional $3,000/month on top of the $3,035 in recurring costs you've already shouldered. We're in pain. :-) Now you discover that the competition is charging $15/month for unlimited access. You do a quick calculation and determine that you need to sell 425 accounts at the same price or 300 accounts at $20/month to cover your costs. Considering that you have 24 lines, that's an overbooking of 1700% or 1250% depending on the rate you charge. That's a little higher than the industry average :-( Gosh, where does all the money go :-( ... Joe ------------------------------------------------------------------------------- Joe Greco - Systems Administrator jgreco@ns.sol.net Solaria Public Access UNIX - Milwaukee, WI 414/546-7968
Want to link to this message? Use this URL: <https://mail-archive.FreeBSD.org/cgi/mid.cgi?199602071728.LAA19154>