From ISPs and WISPs to networks in libraries, businesses, and universities, Internet usage is on the rise. However, as the demand for Internet access continues to grow around the world, so do the opportunities and challenges for service providers. As fast as their user base grows, the obstacles providers face begin to emerge. From competition to dissatisfied customers, the business that once seemed sure to succeed can quickly test the will of even the most battle-tested and tech-savvy business owners and network administrators. However, for all types of Internet providers, there are ways to make the process easier.
For all providers…
1. Set boundaries from the start – When starting a new service, don’t let your users go wide open. You can be fine without rate capping users when you only have 10 users sharing a 10 meg link, but when you get to 100 users sharing a 10 meg link, you’ll need to rate limit everyone. The problem with waiting is that your original users will get used to higher speeds and won’t be happy to share as your business expands, unless you apply some reasonable restrictions up front.
2. Prevent your network from crashing – Many Internet providers believe that if they set maximum rate limits for their users, their network is safe from being blocked due to congestion. However, if you are oversold on your contention rates, you will be locked out and simple rate caps are not enough. Don’t make this mistake.
This may sound obvious, but let me explain. We often find operators with 500 users on a 20 meg link. They then offer two rate plans: 1 meg up and down for consumers and 5 meg up and down for businesses. They then put rate caps on each type of user to make sure they don’t exceed the allotted amount. In a way, this is supposed to exonerate the trader from being oversold. This is all well and good, but if you do the math, 500 users on a 20 meg link will overwhelm your link at some point and no one will ever come close to your “promised amount”.
If you’re oversold, you’ll need more than just rate caps to avoid crashes. At some point, you’ll need to switch to a layer 7 modeler like Packeteer or Allot NetEnforcer. However, you can use a NetEqualizer. Your only other option is to keep adding bandwidth.
3. Good technical support is essential – Don’t put all your faith in the local guru who created your network. There are many good technicians out there and there are many more that will ruin your business. This can create some really tough decisions. I like to use this analogy:
I’m not a concert pianist, not even close, so I can’t tell the guy playing Beatles songs at my local pub’s piano bar from a Julliard-trained pianist. Since I can’t play a lick, everyone surprises me. Well, the same is true for non-technical business owners who hire network technicians or developers. They all seem incredibly smart when, in fact, they can take you down. The only way to know is to find someone with a really good track record of making things work for people. So ask around.
The good guys have no vested interest in turning their business into a custom dynasty (another thing to keep in mind). It is like the doctor who needs the patient to remain ill. You do not want that. Poor or wrong tech support can be the root cause of ISP failure or problems selling your business.
4. Don’t overspend – ISPs and WISPs, remember that on the open market your business is likely to only be valued at three-quarters of your revenue, so don’t be fooled into spending too much on equipment and loans thinking it’s a white night. If your income is $500,000 per year, you’ll be in good shape if you get $400,000 for your business. And this can cover your debt. Yes, there are exceptions and you may get a little more, but don’t expect to double your income. It just isn’t going to happen, so plan your spending accordingly.
For network administrators in companies and institutions, both public and private, financing is not always granted. Budget cuts and reallocation of funds can leave administrators in a bind. Therefore, be careful when planning and managing your network. Keep things like recurring costs and license fees in mind when you make purchases. Over time, these expenses can add up.
5. Optimize your bandwidth – A NetEqualizer bandwidth controller will allow you to increase your user base by 10 to 30 percent without having to purchase additional resources. This allows you to increase the number of people you can put on your infrastructure without expensive construction. However, a purchase like this can be a difficult decision. It is best to think long term. A NetEqualizer is a one-time cost that will pay for itself in approximately 4 months. On the other hand, the purchase of additional bandwidth continues to increase month after month.
For business ISPs and WISPs…
6. Make sure you have a user base to grow – For ISPs and WISPs, maybe 500 homes before they start building. Yes, you can do it for less, but 500 is kind of a magic number where you can pay yourself and maybe hire help so you can be profitable and take a day off. WISPs and ISPs with 100 clients are great, but at that size, they will still be a hobby you may not be able to download in a couple of years.
7. Be the reliable alternative – If you are in a dense metropolitan area and have the resources, you can offer Internet connections to hotel and business customers with pay-as-you-go services. Many hotels and businesses have unreliable connections or none at all. You’ll obviously need real estate across the street, but once secured, you can point a directional antenna at the building and give your signal a recognizable name for your users to connect to. Then offer them the connection for a daily fee. For many users, it will be worth paying a small daily fee for reliable service, especially if the hotel or business offers poor internet service, none at all, or an exorbitantly priced connection.
8. Make payment as easy as possible – When a customer is late in paying their bill, make sure you have a way to direct them to a payment site. Don’t turn off their service and wait for them to call you. For small carriers, you don’t need to automate the payment cycle, just send them to a static page that tells them how to pay their bill. For larger carriers (3000+ users), the expense of automatic bill pay may be worth the extra cost, but with a smaller group of customers, a static redirect to a page with instructions and a phone number will suffice.
9. Find a competitive credit card processor – Your bank may provide you with a service, but it is usually an intermediary in this transaction. There are credit card processing agencies that sell their services directly and can be more profitable. These are obvious dollars that accumulate each month in savings.
10. Cross Market – Don’t be shy about it. Once you have a captive audience, there are all sorts of cross-marketing ideas you can do to earn extra income. Tastefully done, your users won’t mind. This could be a special with the local car dealer running coupons for them. Or for something like a pizzeria. There is unlimited potential here, and if you’re not taking advantage of it, you’re missing out on easy income.
Obviously, these 10 tips won’t apply to all Internet providers, but it’s pretty much a given that at least some of these issues will crop up over time. While there is no guarantee that a network will work perfectly, these tips should help point Internet providers and network administrators in the right direction.