Building an ISP Business Plan
   Part 4: Operating & Organizational Plans

Bankers or VCs who invest in your company are ultimately investing in you. These sections of the business plan are where you communicate your grasp of actually running an ISP.

by Jason Zigmont
     HowToSell.net

With many ISPs, the thing that separates them from their competitors is the way they operate and manage their business. It may be a higher level of service quality, or a visionary as CEO; whatever it is, these sections are where you strut your operational/organizational stuff.

Operating Plan
This section of the business plan covers the details of how your ISP will actually operate. If it's a Virtual ISP (VISP)—an ISP that outsources all core functions—there are fewer details to be included than for a facilities-based ISP. Virtual ISPs should describe who they are buying their access from and how that provider is set up, from a high level prospective.

A facilities-based ISP has to describe in detail how the business will work, how access will be provided, and what systems are in place to do this. You should also explain in detail what differentiates you from your competitor and how your service is better then others.

A complete Operating Plan consists of the following sections:

• Operating Plan Summary
• Situational Review
• Operations
• Quality Control and Customer Service

The Operating Plan Summary and Situational Review sections are an overall high-level view of the Operating Plan. Within the Situational Review, you should state where your base of operations will be, as it will serve as a reference point for your reader.

The Operations subsection covers all aspects of your business and how it operates, such as how you interact with subscribers and how you provide your service.

The Operations subsection should contain enough detail so that the reader, no matter what their level of experience is, can understand how you provide Internet access and support your users. Diagrams, which should be included in the appendix of your business plan, can be useful to explain what might otherwise be a difficult setup to understand.

The essential issues to cover in the Operations subsection include:

• Customer Service
• Technical Support
• Internet Access Provision

Within your descriptions of Customer Service and Technical Support, you should label any direct measures of quality (DMOQs) such as hold times, call abandon rates, and any appropriate ratios.

Internet Access Provision should include all of the important details about your service, such as user-to-modem ratios, monitoring, and service provisioning.

For example:
"All Internet providers oversell their modems by a certain ratio, which therefore allows providers to make a profit. As a provider grows, they can have a higher user-to-modem ratio, and if the provider is willing to accept busy signals during peak times, they can raise the ratio. For example, AOL, during its peak time had a ratio of 35:1. Currently, AOL runs a 25:1 ratio. Average ISPs run a 10:1 ratio, with some of the better providers running a 6.5:1 ratio. QEI.net has decided to purchase enough wholesale ports for an operational user to modem ratio of 6:1. This, coupled with the 10% overage agreement with XYZ provider will allow the company to provide a 'no busy signals' guarantee."

The Quality Control and Customer Service section describes the metrics that you have defined to use in measuring quality of service and customer opinions. You should also discuss how often you plan on looking at the metrics and what you plan to do to assure a high level of service.

Go to page 2: Organizational Plan