How to create a Financial Plan for your Mobile Brand (MVNO)

It is important to create a Financial Plan for your Mobile Brand (MVNO). A good Financial Plan for your Mobile Brand (MVNO) showing the financial health is paramount to its long-term success and ability to compete in the dynamic telecommunications industry. A robust financial plan serves as a roadmap for managing revenue, expenses, and investments, enabling MVNOs to make informed decisions that align with their strategic goals.

The MVNO Financial Plan should provide a detailed analysis of the MVNO’s financial position, including revenue projections, cost estimates, capital requirements, and profitability forecasts. It delves into the intricacies of financial modeling, budgeting, and cash flow management, empowering MVNOs to make sound financial decisions.

Obviously you should be carefully managing your finances, your MVNOs can attract investors, secure financing, and ensure sustainable growth. The MVNO Financial Plan serves also as a valuable tool for guiding the MVNO’s financial decisions, ensuring that financial resources are allocated effectively to support the achievement of its strategic objectives.

As has been noted in “How to start an MVNO” there are at least 3 plans which are important to create, these are:

Here we give some guidance about what might be useful to put in your Financial Plan.

Once you have put together your business and marketing plan, you’ll need to get your finances in order. Here are the relevant questions you should answer:

How much will it cost to launch your MVNO?
What are your MVNO workforce requirements?
How much will you outsource and what will the associated costs be?
How much money can you invest and how much will you need from external investors?
What is your expected ARPU and margin per subscriber?
When do you expect your Mobile Brand (MVNO) to be profitable?
How much will your MVNO license cost?
How do I finance my Mobile Brand (MVNO)?
100 Points you might want to think about

How much will it cost to launch your MVNO?

Obviously this is depending many things such as: What are your upfront costs? What is your overhead? How much will your service agreement(s) cost? What tools and systems will you need, this also in relation to the flexibility you need as described in the business plan? How much will it cost to purchase and ship SIM cards (in case you use physical SIM cards)? How much does your marketing plan (Go To Market cost)? Will you need an office building or any other physical location? Etc.

What are your MVNO workforce requirements?

Next point is how many employees will you need, what will they be doing, and how much will they cost? Does it make sense to use foreign employees? What expertise and skills do the employees need to have (like language(s), commercial, technical, etc.)

Subsequently if your MVNO is part of a larger business, such as a retail brand, how many of your existing employees can be used/converted to MVNO employees?

In addition if you rely on resellers or agents, how much margin will you give them?

How much will you outsource and what will the associated costs be?

Equally important and depending on your MVNO configuration, you might rely on third parties to manage things like marketing, customer support, billing, collections, etc. But also, things like hosting/Cloud costs, storage, shipping.

How much money can you invest and how much will you need from external investors?

MVNOs can be quite affordable to launch, especially if you go with the Branded Reseller (Skinny MVNO) route.

However, if you want more control over your services and to approach a broader target audience, the numbers will add up quickly. It is critical to figure out just how much you’ll need.

What is your expected ARPU and margin per subscriber?

This is an important benchmark that will help you gauge your success as you build your mobile brand. In brief the ARPU in combination with the Margin can be calculated in various ways.

For instance, a very simplified way to do a quick calculation is like this, you sell a bundle for $50 and your purchase the same bundle from your provider (MNO/MVNE/MVNA) for $40, then the margin would be $10.

Of course in the simplified and quick calculation other costs such as shipment, marketing, employment, etc. etc. are not included. Obviously it is important that you do not forget these costs and incorporate them into your financial planning.

When do you expect your Mobile Brand (MVNO) to be profitable?

Your break-even point is another important benchmark. In the business plan you should have determined how many potential subscribers there are for your Mobile Brand. You can use this information in the financial plan. It will help you monitor the success of your launch.

For example, let’s say the potential number of subscribers is 5.000 and need to have 10.000 subscribers to become breakeven, this means you Mobile Brand will never become successful and you need to adjust your plans. The higher the number of potential subscribers the easier and faster your break-even point might be reached.

Never overestimate your potential number of subscribers, it is always better to stay on the cautious side. It can be that your break-even point needs to be in 3 months or 1 year or something else, this depends on your goals but also on your financials. Hence you might also need to decrease/increase the number of employees, marketing, etc.

How much will your MVNO license cost?

In some countries the costs for an MVNO / MVNE license are very high, for example in Nigeria. It would be wise to check how much the costs are in the country where you want to launch and if this is a one-time fee or a yearly fee.

In any case you also need to check if there are any additional costs related for your Mobile Brand (next to the license costs). To illustrate in the USA you need to pay additional TAX when you want to offer Mobile services in rural areas.

How do I finance my Mobile Brand (MVNO)?

The most important point is financing. Nothing will be free and everything costs money, like setting up a Mobile Brand, maintaining it, doing Marketing, etc. This means you need sufficient money to start up and to keep in operation until you reach your breakeven point.

Keep in mind that not everything will be going as you want or expect and that you need to have a buffer to take this into account.

There are several ways to get financing, like a personal/company loan, using profit from your existing business, investors, partnerships, crowdfunding, charity, family & friends, etc.

Important

Because of the outcome of the financial plan, you might need to adjust your business plan and marketing plan. It is important to keep all plans aligned.

100 Points you might want to think about for your Financial Plan

Developing a thorough financial plan is essential for the success and sustainability of your Mobile Virtual Network Operator (MVNO) or mobile brand. This comprehensive checklist covers various aspects crucial for developing a robust financial plan for your MVNO or mobile brand. Adapt and customize these points to suit the specific goals, context, and market dynamics of your venture.