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<blockquote data-quote="Janx" data-source="post: 6264863" data-attributes="member: 8835"><p>Of course I'm don't. But on the other hand, you see how much of my extrapolations you</p><p>actually agree with (like only working week nights and weekends by default).</p><p></p><p>Once assessed and a number computed, then one can begin the exercise of brainstorming ways to bring the number down or increase volume of business.</p><p></p><p>As you have by figuring out what the magician can do during the week days.</p><p></p><p>Since you confirmed (and even upped) the numbers of prep time being part of the cost of GMing (you can't flip burgers during prep time, or do freebies for old people) it is in effect billable time (or at least needs to be factored into the price).</p><p></p><p>Usually, what I find by performing the computation (one of the many hats I wear at work), is we figure out if the price is higher than clients will accept (that's human intuition usually), or we figure out if we can get the costs down to either improve our margin or make the price appealing to a potential clientt.</p><p></p><p>Failing that, we come to the conclusion that the activity is not a viable business venture.</p><p></p><p>I find that the computation need not be particularly precise. It usually renders a ballpark figure that is close enough for comprehending what the venture will cost.</p><p></p><p>For instance, I can compute EN World's basic expense and income need fairly readily. it won't precisely match EN Worlds, but if somebody was thinking of replicating the site, it's close enough.</p><p></p><p>A server of modern and decent specs will cost $5-15K with warranties from HP (we just bought one for $5K and it has 24 cores). The life of that server is 3 years, so split up $5,000/36=$139/month which can be comparable to cloud hosting, but more reliable (cloud hosting will not give you 24 cores for that price).</p><p></p><p>EN used to be hosted in Florida, and I know Level3 charges $1K/month for 20/20 Mb/s up and down. Probably going to need a decent pipe for high web traffic.</p><p></p><p>So already, we need $1139/month to host the site. Not counting firewall (that's sort of cheap), and actual data center housing (the main driver of data center rent is internet and IPs).</p><p></p><p>For a rack, one channel of power (20 amp max before they make you buy another channel) </p><p>is $250/month.</p><p></p><p>So 1139+250=$1389.</p><p></p><p>Plus, the owner wants/needs a salary. In true ventures, owners get paid last, but let's keep imagining what the goal is to pay the bills the owner actually has now, and that is simulated by the 40K salary.</p><p></p><p>which is $3,333/month. Humans are the expensive part of the equation.</p><p></p><p>Our new monthly cost/minimum income objective is $4722/month.</p><p></p><p>I don't actually know how much ads bring in (I don't work in that arena).</p><p></p><p>But we do know EN charges $3/month for a subscription.</p><p></p><p>That means we need $4722/$3 = 1574 subscribers per month to meet the cost goal. For the actual EN site, with 150K members, that's probably doable.</p><p></p><p>Now obviously, we can fine tune the numbers. That's part of the exercise in making a go/no go decision to pursue the venture.</p><p></p><p>But if the people looking to do the venture don't think they can draw in the required # of subscribers (or other revenue like ads), then the venture will go broke.</p><p></p><p>Now at some point, people take chances, or step into this kind of thing partially. It is possible to spin up a site cheaper (and not make much money) until it grows big enough to be a full time venture. The world is chock full of things that wouldn't have gotten done otherwise.</p><p></p><p>but I find it is helpful to understand the larger scope of what a business venture entails before investing in something that isn't sustainable/doesn't scale well.</p></blockquote><p></p>
[QUOTE="Janx, post: 6264863, member: 8835"] Of course I'm don't. But on the other hand, you see how much of my extrapolations you actually agree with (like only working week nights and weekends by default). Once assessed and a number computed, then one can begin the exercise of brainstorming ways to bring the number down or increase volume of business. As you have by figuring out what the magician can do during the week days. Since you confirmed (and even upped) the numbers of prep time being part of the cost of GMing (you can't flip burgers during prep time, or do freebies for old people) it is in effect billable time (or at least needs to be factored into the price). Usually, what I find by performing the computation (one of the many hats I wear at work), is we figure out if the price is higher than clients will accept (that's human intuition usually), or we figure out if we can get the costs down to either improve our margin or make the price appealing to a potential clientt. Failing that, we come to the conclusion that the activity is not a viable business venture. I find that the computation need not be particularly precise. It usually renders a ballpark figure that is close enough for comprehending what the venture will cost. For instance, I can compute EN World's basic expense and income need fairly readily. it won't precisely match EN Worlds, but if somebody was thinking of replicating the site, it's close enough. A server of modern and decent specs will cost $5-15K with warranties from HP (we just bought one for $5K and it has 24 cores). The life of that server is 3 years, so split up $5,000/36=$139/month which can be comparable to cloud hosting, but more reliable (cloud hosting will not give you 24 cores for that price). EN used to be hosted in Florida, and I know Level3 charges $1K/month for 20/20 Mb/s up and down. Probably going to need a decent pipe for high web traffic. So already, we need $1139/month to host the site. Not counting firewall (that's sort of cheap), and actual data center housing (the main driver of data center rent is internet and IPs). For a rack, one channel of power (20 amp max before they make you buy another channel) is $250/month. So 1139+250=$1389. Plus, the owner wants/needs a salary. In true ventures, owners get paid last, but let's keep imagining what the goal is to pay the bills the owner actually has now, and that is simulated by the 40K salary. which is $3,333/month. Humans are the expensive part of the equation. Our new monthly cost/minimum income objective is $4722/month. I don't actually know how much ads bring in (I don't work in that arena). But we do know EN charges $3/month for a subscription. That means we need $4722/$3 = 1574 subscribers per month to meet the cost goal. For the actual EN site, with 150K members, that's probably doable. Now obviously, we can fine tune the numbers. That's part of the exercise in making a go/no go decision to pursue the venture. But if the people looking to do the venture don't think they can draw in the required # of subscribers (or other revenue like ads), then the venture will go broke. Now at some point, people take chances, or step into this kind of thing partially. It is possible to spin up a site cheaper (and not make much money) until it grows big enough to be a full time venture. The world is chock full of things that wouldn't have gotten done otherwise. but I find it is helpful to understand the larger scope of what a business venture entails before investing in something that isn't sustainable/doesn't scale well. [/QUOTE]
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