An NREN’s financial model contains all the financial data of the NREN as an organisation. The financial model quantifies the business model. This is key to
communicate the vision, and most critically, to calculate cash
requirements to meet milestones.
A financial model is:
- a strategic framework for thinking through the key drivers of your NREN business
- an operating plan and a roadmap for your start-up
- a mark of credibility which can help convince funders of the overall potential of the NREN venture.
It will provide operational metrics to help drive better strategic
decision-making, tell you how much money you need to raise (and when)
and allow you to experiment with different financing structures to work
out which one is best for your organisation.
It can only be developed once the NREN itself has been described in the business model. It usually covers a span of several years and provides details on costs, such as staff, bandwidth, equipment, and operational expenses.
Once the expenses have been calculated the tariffs and other revenue sources can be set.