The Internet has reached our homes as widely as it can. However, there are still apartments where the World Wide Web has not penetrated. In addition, if we take into account the current pace of urban development, we can conclude that enormous work remains to be done to connect new buildings. Therefore, the Internet providing business is relevant now and will remain so for a long time.

To begin with, it is worth defining an Internet provider. This is an organization that provides access to the World Wide Web and other related services to the market. From a legal point of view, an Internet provider is a telecom operator that has a license for one of these types of services:

• Communication service for providing communication channels.
• Communication service in an information transmission network, except for voice data transmission.
• Communication service for voice data transmission in an information transmission network.

Anyone who wants to start their own business in this area sooner or later asks themselves a logical question - how to become an Internet provider? A huge number of people, including experienced businessmen, believe that organizing the work of an Internet provider is incredibly difficult from a technical point of view. This explains the not too large number of entrepreneurs who entered the telecommunications market. However, not everything is as difficult as it might seem at first glance. In very simple words, the business of an Internet provider is to wholesale the Internet and sell it to end users at retail.

According to Forbes magazine, in 2013, the Internet access market in Russia grew by 28% over six months, and the position of the largest operator is still occupied by Comstar - UTS.

8% of the market is occupied by VimpelCom-Beeline, and Er-Telecom closes the top three with 7.1%.

Other Internet providers are far behind in the ranking, with the three closest pursuers slightly reducing their market share. VolgaTelecom serves only 6.5% of users, North-West Telecom - 6.1%, and Uralsvyazinform - 5.2%.

The TOP 10 largest Russian providers are completed by Akado, Sibirtelecom, Southern Telecom with market shares ranging from 4-3%, the rest received 38.4% of the market.

What types of Internet providers are there?

Internet providers can be at the federal level, which distribute the Internet at the level of an entire city, or at the local level. In an average regional center, there may be dozens and sometimes hundreds of local providers. In accordance with the services provided to subscribers, Internet providers can be divided into the following types:

• hosting providers;
• access providers;
• backbone Internet providers;
• channel providers;
• last mile providers;
• mobile commerce service providers;
• others.

Access providers can be primary (backbone), which own backbone communication channels, and secondary (city), which rent communication channels from primary providers. The primary ones sell traffic exclusively in large volumes and provide their services to other providers, although it is not necessary once at a time, and there are exceptions.

How to become an Internet service provider

Before starting an activity, you need to register a legal entity and obtain a license to provide communication channels for use by contacting one of the legal companies for help. After this, you need to take care of the equipment: protective cabinets in which all equipment is stored, switches, servers, several types of cable (fiber and copper) and much more. Only after installing, configuring and thoroughly testing the equipment, you can become a full-fledged Internet provider and move on to attracting clients.

In addition to sales, you need to take care of user technical support. Ideally, it is 24/7 and multi-channel. Long waits for operator response and ineffective technical support are often the decisive factors in a client’s decision to change their provider.

Activities of the Internet provider

The list of services provided by the provider includes:

1. broadband access to the World Wide Web;
2. dial-up Internet access;
3. wireless Internet access;
4. hosting (allocation of a certain disk space to ensure the operation of sites), support for the operation of a virtual mail server and mailboxes;
5. colocation (location of client equipment on the provider’s premises);
6. rental of virtual and dedicated servers (VPS and VDS).

Internet provider for legal entities

For manufacturing enterprises, financial institutions, offices, telecom operators and other legal entities, the Internet provider provides the following services:

• ensuring uninterrupted high-speed Internet access;
• rental of high-performance communication channels for any client purposes;
• a range of multimedia services: video conferencing, video surveillance systems, television broadcasting, radio, etc.;
• services of e-mail, hosting and location of data blocks on the Internet;
• creation, support and configuration of information security systems.

Internet provider business plan

The Internet providing market has one feature - there is no government support at all, and this area has developed thanks to private organizations. Therefore, high-quality services are provided in places where the solvent population accumulates, which in most cases are certain areas of large cities. In this regard, the regional Internet services market, without full access to the network, is open to new names. Let's consider all possible options for implementing the provider's business plan.

The local network

The easiest and cheapest way to start your business is by providing Internet access to the residents of your apartment building. Launching this project does not require a large technical base and large financial investments. Necessary:

1. productive personal computer ($600−1000);
2. network card ($25−30);
3. network cable ($0.2 per 1 meter);
4. switch ($15−20).

To connect a client, you only need a network card. This cannot be a problem, since modern motherboards have an integrated network card. If you take into account the use of a UNIX system for the server, there will be no software costs. Taking into account all costs, including the purchase of an external unlimited channel with unlimited access ($140-180), the required starting capital does not exceed $1500. The only disadvantage of a local network is that the speed of Internet access is divided equally among all participants, so the number of subscribers is strictly limited. If such a business is not for you, then you should read about.

Analog access to PBX

Close cooperation with companies providing telephone services provides greater scope for action. However, if in the previous case it was possible to work “in the shadows,” then in this case you will have to be completely legal and you won’t be able to get by with just one computer. 2-3 powerful machines are needed to host a server-router. They must have high-capacity hard drives (from 2 TB). Equipment you will need:

1. server computers (from $4000);
2. PC for office tasks (from $450);
3. modem stand (from $1300);
4. adapter board with many ports (from $900);
5. switch (from $300);
6. cable equipment (from $300);
7. uninterruptible power supplies (from $150).

To implement such a project, an Internet provider will need at least $8,500. The next step is to obtain telephone channels, one for each available modem. Practice shows that it is sometimes very problematic to negotiate with the local telephone service, since a frequent response to a request is the refusal “There is no free capacity.” The best option would be to contact a private telephone company, where a similar issue can be resolved for $2000. An external digital channel will cost $400, and the monthly fee will be about $1500.

Digital access to PBX

The main disadvantage of the previous scheme is the limitation in access speed and audience coverage. In order to increase the performance, you need to install special equipment that operates on the basis of digital access to the network. This will allow the access lines to be combined into one digital signal that is transmitted to the provider.

A server designed for the required minimum of 30 telephone channels costs about $6,000, and a router that allows you to connect subscribers via a dedicated line costs $2,200. Thus, the cost of all equipment for a provider that works on digital technology is at least $12,000. the monthly fee for an external channel is about $2,500, and the rental of 30 telephone channels is $1,000 per month.

A business plan for an Internet provider is a complex document from an economic and technical point of view, because there are a considerable number of small expenses, the satisfaction of which is simply a necessity, but at the same time a very difficult point from the point of view of miscalculation. However, careful attention to small details will definitely pay off in profitability.

Another important point is the level of user service, because it is unlikely that anyone will be satisfied with the “hanging” and “crashing” Internet. such a business starts at 60%, but when providing subscribers with additional services, such as interactive television, free hosting under certain conditions, it increases proportionally.

Internet provider license

Providers operate on the basis of an agreement concluded with a telecommunications operator and a copy of the license of this operator, in accordance with the Law “On Communications”. A certified copy of the license is a document that confirms the right of the Internet provider to carry out its activities in providing telecommunications services.

Equipment for Internet provider

A more general list of the minimum necessary equipment that is required to organize Internet providing:

• web servers;
• ftp servers (often combined with web servers);
• mail servers (combined on small systems with web servers);
• terminal and identification servers;
• secondary servers;
• servers for development, control, and news servers;
• registration and settlement servers;
• network switches;
• control equipment, tools, cables;
• administrative panel, printer;
• uninterruptible power supplies;

The main costs are associated with equipment, so the best option is to seek help from special consultants who will help you avoid unnecessary and incorrect purchases.

Useful articles

Useful articles:

Attention! Due to recent changes in legislation, the legal information in this article may be out of date! Our lawyer can advise you free of charge - write your question in the form below:

Attention! The free business plan offered for download below is a sample. A business plan that best suits the conditions of your business must be created with the help of specialists.

How to become an Internet provider through a business plan?

The Internet provider company provides services for providing access to the broadband Internet network for the population, enterprises and organizations.

General requirements for office space and its equipment

For the office of such a company, it is preferable to choose densely populated areas of the city. In addition to registering a private enterprise, to carry out this type of activity it is necessary to obtain a conclusion on the compliance of the premises with sanitary standards and on compliance with fire safety.

The contractor must carry out high-quality installation of the local network. This complex process begins with network design, installation, testing and documentation.

Necessary equipment

There are several options for laying out the network: country roads, highways, highways. Many people start with the minimum - a highway option, creating a small network for their neighbors in an apartment building or business center.

For this it is enough:

• own apartment or office;
• average performance computer;
• cables for laying a local network;
• network card;
• high-speed modem and adapter.

All these devices will fit on one desktop. You can also save on software if you start at the lower level.

At the same time, the functions of supporting network servers are transferred to the top-level provider.

The size of the customer base cannot exceed 30 subscribers.

To create a wide client base, higher-level networks will be required, requiring significant financial investments, the help of telecom operators and a lot of equipment: computers for installing a router server, domain name server, billing system, other servers (mail, proxy, WWW), modem rack, switches and other. Be sure to purchase an uninterruptible power supply generator.

Connecting to a digital PBX with a four-wire digital line E1 is a necessary condition for the minimum input lines with which you can hope for serious business.

Recruitment of personnel and organization of work with clients

It is more convenient to make payments to clients through bank branches. You can, of course, buy a cash register yourself and hire a cashier. To begin with, you can get by with one advanced programmer with network administration skills.

When working under remote access schemes, 3-5 employees will be required (system administrator, technical support specialist, accountant-cashier, customer service manager).

Payback period

When organizing a medium-sized network, your investment will pay off in about a year.

Table No. 1. Potential of consumers of Internet service providers in Russia

Marketing program and client search

It will not be difficult for the organizer of a low-end provider company in some remote area to create a client base. In densely populated areas there is a lot of competition among providers, so customers will have to be lured away.

To do this, you need to discover the weaknesses of competitors, acquire high-quality equipment, set adequate payment and provide yourself with advertising. Advertising can be placed in the local newspaper, in city educational institutions, on buses and subways, on Internet sites and on social networks.

How to choose an Internet provider

NON-GOVERNMENT INSTITUTE OF MANAGEMENT AND ENTREPRENEURSHIP

Department of “Production Technologies”

and entrepreneurship”

COURSE WORK

Provider – provision of connection services

to the global computer network INTERNET.

Completed by: student ______ course,

Groups, faculty __________

_________ _______________

(date) (signature)
(FULL NAME.)

Scientific
supervisor:

_______________________________

(degree, title, position)

_________ _______________
_______________________________

(date) (signature)
(FULL NAME.)

Bobruisk 2000

Summary (explanatory note)………………………………3

Characteristics of the proposed product……………………. 7

Market assessment……………………………………………………… 16

Competitiveness……………………………………. 18

Marketing strategy……………………………………………………………. 20

Production plan…………………………………………………………….. 22

Organizational plan…………………………………….. 24

Legal plan………………………………………………………. 26

Financial plan…………………………………………… 29

Financing strategy…………………………………… 35

1. Summary (explanatory note).

The main goal of our company is to provide everyone with access
to the global Internet, and of course getting the most
profit at the lowest cost. The main strategy of the project is
creating conditions to ensure access to the Internet with known
better technical characteristics compared to competitors
(higher connection speed, lower cost of service).

Analysis of the market situation showed that the main clients at present
At the moment are individuals working from home. Also
a large proportion of clients are enterprises and organizations that are forced
use the Internet in daily work to increase efficiency
activities (advertising, search for new suppliers, sales markets, new
technologies, etc.). The number of potential clients is growing every day
during the day.

We are going to react quite clearly to all changes in the composition
our consumers, by introducing additional resources and attracting
additional investments to meet the needs of an increased number
consumers. One of our main goals will be to continuously increase
quality of services provided by introducing new capacities.

In the proposed project, clients can be attracted for
due to significantly higher connection speed (56K v.90),
provision of online email and hosting services (disk
space), various tariff plans, including potential
the customer will be able to choose what is most profitable for him. A
the most important thing is the cost of the service, which will be significantly lower
existing today, with a higher access speed.
It is precisely this moment that will be the main argument in the “struggle” for
client. The cost of our services will reflect competitiveness
our services, and it is precisely thanks to the fairly low prices that we
We hope to control a significant part of the Belarusian market.

Everyone knows that UChNPP “Vector” is famous for its fairly high
prices for computer equipment and component materials. By
providing provider services at the lowest prices in Belarus
We: firstly, will make it much easier for computer users
the ability to obtain information from a global computer network;
secondly, we will significantly increase the profit of our enterprise, which
will allow us to expand the range of services provided and thirdly, we will be able
significantly increase the prestige of our company in the eyes of our consumers.

The main direction of the enterprise's marketing policy is
attracting a wide range of clients, both individuals and legal entities.
The work will take into account various factors of market conditions, such as
solvency of clients, contingent of clients, competitiveness
services provided, a flexible approach when setting prices and tariffs and
many other factors.

The technological potential of this project is very high because from the first
stage it is intended to use only the most modern and
high-tech equipment from leading telephony manufacturers,
network and switching equipment. Such as Intel Corporation,
Lucent Technologies, AMP, PairGain, Ericsson. Initially, in the project
equipment capacities are laid down, significantly higher than necessary for
first stage, in order to minimize further expansion costs
equipment throughput and attracting more
clients.

When creating a provider company, it is necessary to keep in mind that in order to satisfy the end user's needs for Internet services, the company must first purchase Internet access.

Large companies in Russia that sell such access, for example, OJSC Rostelecom, the largest communications company in Russia, have communications networks covering many cities and several international links to foreign networks. Such companies, called uplink providers or telecom operators, are not engaged in providing services to end users.

In turn, uplink providers can be part of telecommunications holdings, for example, OJSC Svyazinvest, one of the largest telecommunications holdings in the world, the authorized capital of which is formed by shares of joint-stock telecommunication companies created in the process of privatization of state-owned telecommunication enterprises.

Telecommunications holdings, companies and large providers own physical communication lines (telephone networks, fiber optic cables, communications via satellites, etc.).

Local providers can create large networks within one city, but laying communication lines over long distances on their own is unprofitable; it is cheaper and easier to buy access to such lines.

To provide access services to end users, you need equipment - modem racks, access servers. You have to buy phone lines and numbers from phone companies, etc.

Foreign countries from the very beginning classified Internet services as value-added services, allowing providers to develop at their own discretion, and in Russia the Internet was classified as communication services, with all the ensuing consequences: - mandatory obtaining of licenses, coordination of projects and certification of equipment used.

Since the development of the legislative framework does not keep pace with economic and legal relations in the field of high technologies, the conditions for the provision of provider services are not regulated by law. Each provider, when providing connection services, for example, over a leased line, provides its own version of a standard contract, which is already amended in accordance with the specific wishes of clients.

When connecting a local provider to a regional one, a provider agreement is signed, which describes the rights and obligations of providers in relation to each other.

Providers are more dependent on external factors, such as the introduction of time-based payment for telephones, power outages, channel failures, interference of government and law enforcement agencies in their activities, and changes in legislation.

A business plan is a working tool used in all areas of entrepreneurship; it describes the process of functioning of the company, shows how to achieve its goals, in particular, increasing the profitability of its work.

The business plan is a permanent document, is systematically updated (changes are made to it related to changes occurring both within the company and in the market where the company operates), determines the company’s development strategy, is based on the general concept of the company’s development, and provides technical and economic justification for specific activities.

A business plan allows you to solve a number of economic and organizational problems, the main ones are:

• 
  justification of the economic feasibility of choosing directions for the company’s development;
• 
  calculation of expected financial results of activities, primarily sales volumes, profits, income on capital;
• 
  determination of the intended source of financing for the implementation of the chosen strategy;
• 
  selection of workers who are able to implement this plan.

Business plan starts with "Summary", which practically completes the work of writing it. Thus, a resume is created after all issues related to the creation of a provider company have been worked out. The volume of the resume should be small (up to 4 typewritten pages). The summary should reflect the financial results of the project.

Future lenders and investors should receive complete information on issues of interest to them from the resume. To do this, you can highlight the following sub-items in your resume:

• 
  the main idea of ​​the project;
• 
  business plan goals;
• 
  ways and means of achieving goals;
• 
  timing and stages of project implementation.

The business idea is to create an Internet provider company, i.e. a company engaged in providing access services to the global Internet. It is assumed that this company will serve end users of St. Petersburg and, in the future, the Leningrad region. As for St. Petersburg, on average about half a million people access Internet pages per week.

At the first stage, the newly created company must provide dial-up unlimited access to the Internet for individuals and legal entities. In the future, the service sector can be expanded.

Business plan goals

1. 
   Creation of an economically stable provider company, whose services will be in great demand due to their high quality and low cost;
2. 
   Creating opportunities for the development of the range of proposed services, such as:

• 
  web design – the allocation of a specialized department in a company engaged in the development, support and maintenance of websites and banners for legal entities and individuals;
• 
  web hosting – hosting websites and supporting virtual servers on the company’s server;
• 
  creation of a virtual e-commerce store within the company;
• 
  increasing the number of modem pools of the company and attracting new clients;
• 
  connecting legal entities to the Internet via dedicated lines, etc.

1. 
   Becoming one of the largest companies in St. Petersburg providing Internet services via dial-up lines;
2. 
   Ensuring the required profitability of the company;
3. 
   Repayment of loans taken within the agreed time frame.

“Characteristics of the provider company’s products.”

This section begins the main part of the business plan. It describes the services that the provider is going to offer to potential buyers (end users), and also provides basic information on the provider company, which helps prove to a potential investor that it is capable of producing the declared services.

Satisfying human needs for operational information and communication is the goal of providing network services. The interests of users of Russian-language Internet resources can be characterized by the following composition:

1. 
   socio-political news;
2. 
   business news;
3. 
   weather;
4. 
   the science;
5. 
   travel, vacation;
6. 
   art;
7. 
   job search;
8. 
   sport;
9. 
   e-commerce, e-business;
10. 
    medicine;
11. 
    distance learning and education;
12. 
    interpersonal communications;
13. 
    industry;
14. 
    IP telephony, etc.

Table 4.2.

Information about fixed production assets

Within the marketing plan and market research section, the following main subsections can be distinguished:

• 
  sales markets;
• 
  segmentation;
• 
  sales volume forecasts;
• 
  pricing;
• 
  competitor analysis;
• 
  advertising;
• 
  promotion;
• 
  sales promotion;
• 
  resource market.

Difficulties in entering the information market for the newly created provider company are caused by the fact that:

• 
  large and established companies have much cheaper portals for connecting to the Internet, and accordingly, lower costs;
• 
  users are committed to companies that suit them and with which they already work;
• 
  the sales market for Internet access services (accounts) is possible provided that you have a city telephone number and a stable connection with an acceptable connection speed;
• 
  Internet access, which is still a luxury in the eyes of the majority of people, is quite expensive.

The target consumer of services will be individuals in need of such services. About 30% of St. Petersburg residents who regularly use the Internet have their own “home Internet,” i.e. Internet access via dial-up lines. All of them are clients of various providing companies, but they all have one thing in common - the desire to receive a high-quality service at low costs.

St. Petersburg residents who do not have a “home Internet” but work exclusively in corporate and educational networks with Internet access can also become potential clients.

Thus, recruiting a portfolio of end users in the amount of 5,000-10,000 individuals will not be particularly difficult.

Currently, the market for providing services in St. Petersburg is represented by a fairly large number of companies. At the same time, the demand for services is constantly growing, the existing demand is covered by existing companies by reducing the level of service.

Most existing providers provide a range of different Internet access options.

To analyze prices in the information market and the level of competition, it is convenient to summarize the information obtained as a result of market research into tables (the forms of such tables are given below).

Table 4.3.

Prices for services of provider companies

Table 4.4.

Comparative analysis of the competitiveness of the newly created company

From Table 4.4 it follows that the newly created company will have undoubted competitive advantages, and therefore has a greater chance of winning the competition in the St. Petersburg market.

Considering the nature of the services provided and the company’s lack of focus on a narrow market segment, it seems advisable to adhere to a mass approach to the provision of services.

In pricing, it is assumed to adhere to the policy of market penetration, which is very important in a competitive environment. Low prices (combined with quality) will attract customers, and the company will increase its market share.

• 
  advertising in magazines;
• 
  advertising in newspapers, as well as in those distributed free of charge;
• 
  advertising in public transport
• 
  advertising on the Internet;
• 
  advertising posters in various stores and points where Internet cards will be sold.

In the future, the company can sell services through its own sales network and/or authorized dealers.
Sample contents of a business plan section
"Production plan".

The main objective of this section of the business plan is to prove to potential partners that the company is able to produce the required amount of information services on time and with the required quality.

To achieve this goal, the entrepreneur, when drawing up a business plan, shows how problems related to premises, equipment, personnel, etc. will be solved. At its core, the section under consideration is a feasibility study of the business plan being developed.

In this case, the following important subsections should be highlighted:

• 
  production method, technology;
• 
  production area;
• 
  equipment;
• 
  suppliers;
• 
  need for working capital;
• 
  total costs;
• 
  wage;
• 
  cost estimate.

The data given in Table 4.5 can serve as the basis for calculating the cost of purchased equipment or its rental, the cost of fixed production assets necessary to fulfill the planned volume of services, the amount of the wage fund, etc.
Sample contents of a business plan section
"Organizational plan."

After answering the question of how the problems associated with the production of services will be solved, it is important to solve the problem of recruiting employees and scheduling their work. Therefore, this section of the business plan justifies the organization of management of the production activities of the provider company, describes the qualification requirements for specialists and their composition.

Table 4.5.

Information on purchased and leased equipment

• 
  organizational structure of the company;
• 
  organizational and legal form;
• 
  managers;
• 
  staff;
• 
  legislative framework (regulating this type of activity);
• 
  stimulating staff work.

As an example in Fig. Figure 4.5 shows the organizational structure of an average provider company.

Other possible options for the organizational structures of such firms are given in paragraph 4.2.

Simultaneously with the development of the organizational structure, the issue of choosing the organizational and legal form of the provider company should be resolved.

When determining the composition and structure of specialists, management and support personnel involved in the work, it is necessary to be guided by the volume and types of information services offered by the provider company. It must be remembered that the quality of the services provided significantly depends on the qualifications of the company’s employees.

All information on the company’s personnel can be summarized in a table, the form of which is presented below (see Table 4.6).
Sample contents of a business plan section
"Risk Assessment".

Every entrepreneur needs to anticipate possible difficulties and develop strategies to overcome them in advance. It is important to justify the degree of existing risk.

Table 4.6.

Summary data on company personnel

For a more complete risk assessment, it is proposed to highlight quantitative and qualitative criteria. Quality

• 
  name of the risk;
• 
  cause of risk;
• 
  impact on expected profit;
• 
  risk prevention methods, etc.

• 
  risk ranking;
• 
  weight of risks;
• 
  scoring of risks by type, etc.

If the project under consideration covers several stages, then it is advisable to carry out a risk assessment on them, for example, on preparatory and stages functioning.

Based on the nature of the impact, risks can be divided into simple and compound. Composite risks are a composition of simple ones, each of which is considered as a simple risk. Simple risks are defined as invariant(independent) in relation to other risks.

Expert opinions are used to assess the likelihood of exposure to risks. The project developers compile a list of primary risks for all stages of the project. Each expert is provided with this list to assess the likelihood of risks occurring, guided by a certain rating system:

• 
  0 – the risk is considered insignificant;
• 
  25 – the risk most likely will not materialize;
• 
  50 – nothing definite can be said about the occurrence of the event;
• 
  75 – the risk is likely to manifest itself;
• 
  100 – a very high probability of risk realization.

A weighting procedure is used to obtain an estimate of the combined risks.

All simple risks can be ranked by importance (by priority). Risks of the first priority have greater weight than risks of the second, etc.; all risks with the same priority have equal weights, and the sum of the weights of all simple risks must be equal to one. The total score of each simple risk is easily calculated if the priority value, average expert rating and weight for each simple risk are determined.

For example, the value of the risk associated with the occurrence of unforeseen costs, calculated in Table 4.7, is 5.25 and is obtained by multiplying the average expert assessment and the weight of this risk.

The weights of each simple risk are calculated based on the priorities assigned to them and the total number of risk items. The composite risk assessment is the sum of the assessments of simple risks included in the composite.

Using risk scores, a list of the most significant risks is identified and measures are taken to reduce their consequences for the implementation of a business project. It should be noted that the list of risks can be supplemented or, conversely, some risks should be excluded from it as atypical for a provider company.

The following measures can be recommended as conditions for risk prevention:

• 
  property and liability insurance for employees of the provider company. Detailed study of the preparatory stage of the project in order to reduce significant risks;
• 
  concluding long-term contracts with suppliers with clear conditions and penalties;
• 
  use of risk insurance mechanisms, etc.

Sample contents of a business plan section
"Financial plan".

The most important section of the document being developed is the financial plan. It is formed with the aim of meeting the company’s needs for financial resources and achieving (maintaining) a stable financial condition.

Table 4.7.

Assessment of simple and compound risks

• 
  sources of own funds;
• 
  sources of borrowed funds;
• 
  forecast of product sales volumes;
• 
  total costs;
• 
  wage;
• 
  taxes and contributions to the budget;
• 
  cash flow statement (simple and discounted);
• 
  break-even chart;
• 
  Profits and Losses Report.

When forming a financial plan, it is necessary to determine the amount of own funds invested in the business, as well as sources of borrowed funds, indicating the size of the necessary loans.

The forecast of sales volumes of information products should be made for 1 year, broken down into months, and then for the next 2-4 years. This forecast should not be made for a longer period of time.

It is necessary to determine the volume of sales of the providing company's products in value terms based on the amount of costs and, finally, the planned profit. The results of calculations of costs, income and profit of a company can be summarized in a table (see Table 4.8). This table essentially combines a sales forecast and a profit plan.

Table 4.8.

Forecast of product sales for the 1st year of the company's activity.

Using the same form, you can provide data for several planned periods (2-4 years).

Using information from the company’s balance sheet and data from the forecast of product sales volumes and costs, it is possible to determine the level of overall profitability of the provider company (see Table 4.9).

In this section you should also present the salary budget, the profit and loss statement of the provider company, the consolidated balance sheet of assets and liabilities and the break-even schedule.

This section can be supplemented with questions related to the financing strategy for a business project.

For example, the plan for obtaining funds, their form, the period for repayment of capital, and the amount of profits are specified.

The question is often asked what needs to be done, what documents need to be collected in order to become an Internet service provider?

To become a provider you must at least:

1. 
   obtain (purchase, rent) high-speed international communication channels;
2. 
   connect to providers of other levels;
3. 
   conclude agreements with major provider companies on traffic exchange.

Determining the level of overall profitability