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Key Takeaways
- The core monthly running cost for a network infrastructure business, excluding variable data center fees, is projected to start between $76,000 and $80,000 in 2026.
- Payroll is the dominant fixed expense, consuming nearly $50,000 monthly to support key technical and sales staff.
- Operators must secure a significant cash buffer sufficient to cover 19 months of negative cash flow until the projected break-even date in July 2027.
- Essential fixed overhead, driven by rent ($6,000) and software licensing ($3,500), totals $17,000 monthly before accounting for the largest expense category, payroll.
Running Cost 1 : Payroll
Total Staff Cost Reality
Your 40 FTEs, covering roles like CTO, Engineers, Sales, and Admin, create a base wage bill of $49,583 monthly. Factoring in standard benefits and payroll taxes adds another 20% to 30%, pushing your true monthly overhead well over $60,000. This is your largest fixed operational expense.
Payroll Components
This initial $49,583 covers the salaries for 40 full-time employees across core functions needed to run Network Infrastructure services. You must budget for the employer burden, which includes FICA, unemployment insurance, and benefits like health coverage. If you use a 25% burden rate, expect an additional $12,396 monthly.
Controlling Headcount
Avoid hiring too fast before recurring revenue stabilizes; 40 people is substantial for an early-stage provider. Keep the CTO and Engineering roles lean initially. Use contractors for specialized, short-term security audits instead of adding permanent headcount. Defintely track the burden rate monthly against industry benchmarks.
- Hire Sales only after product-market fit is proven.
- Outsource HR/Payroll processing to save administrative time.
- Benchmark Engineer salaries against regional averages.
Compliance Cost Buffer
The 20–30% burden rate is non-negotiable for compliance in the US market, especially serving regulated sectors like healthcare. If your initial projections assume only 15% burden, you are underfunding your operational capacity by thousands every month. This cost must be covered by your subscription revenue base.
Running Cost 2 : Office Rent
Office Rent Budget
You must budget $6,000 monthly for office rent and facilities. This is a necessary fixed cost for your Network Infrastructure business that hits the books whether you sign a new client or not.
Cost Inputs
This $6,000 covers your physical space, maintenance, and general facility upkeep. It’s a pure fixed expense; it doesn't scale with the Network-as-a-Service (NaaS) subscriptions you sell. You need quotes for a suitable office space to lock this number in for your initial projections.
- Base rent quotes for required square footage.
- Estimated facility management charges.
- It's a non-negotiable monthly overhead.
Managing Space
Don't overcommit early on office size, especially since your revenue is subscription-based. Many service firms delay leasing large spaces until they hit $100k+ in Monthly Recurring Revenue (MRR). A common mistake is signing a five-year lease defintely before proving your market traction.
- Consider flexible co-working space initially.
- Delay signing long-term leases.
- Keep initial footprint small; scaling space costs money.
Fixed Cost Impact
Because this cost is fixed at $6,000, your break-even point calculation must absorb it fully before accounting for variable costs like Data Center Fees. If your total fixed costs approach the payroll of $49,583, profitability becomes very tight, so monitor utilization.
Running Cost 3 : Software Licensing
Mandatory Licensing Spend
Software licensing is a non-negotiable fixed cost for managing your network infrastructure platform. You must budget $3,500 monthly for the necessary monitoring and security tools to keep client networks operational. This spend directly underpins service delivery reliability for your Network-as-a-Service offering.
What This Software Buys
This $3,500 covers essential Network Performance Monitoring (NPM) and Security Information and Event Management (SIEM) licenses. These tools are fixed overhead, required from day one to ensure uptime promises to clients. Since you target compliance-heavy SMBs, these tools are defintely mandatory, not optional expenses.
- Covers NPM and SIEM software.
- Required for 24/7 monitoring.
- Essential for compliance adherence.
Optimizing Tool Costs
Avoid paying for unused seats or overlapping functionality between monitoring suites. Negotiate annual contracts instead of monthly billing to secure discounts, often yielding 10% to 15% savings. A common mistake is letting licenses auto-renew without auditing utilization levels first.
- Audit license utilization quarterly.
- Bundle monitoring tools where possible.
- Lock in annual contracts early.
Contextualizing Fixed Tech Spend
Compared to your $49,583 payroll or $6,000 office rent, this software allocation is small but critical overhead. If you onboarded 50 clients, this $3,500 represents about $70 per client in fixed technology cost before factoring in variable Data Center Fees. It’s a necessary component of your service delivery.
Running Cost 4 : Data Center Fees
Hosting Cost Scaling
You must treat data center hosting as a primary variable expense tied directly to service delivery. Starting in 2026, expect these colocation fees to consume 60% of revenue, which means gross margins depend entirely on efficient bandwidth usage per client.
Modeling Hosting Inputs
These fees cover physical server space, power, cooling, and bandwidth access within a third-party facility. To model accurately, you need projected customer count, average bandwidth consumption per user, and the contracted rate per megabit per second (Mbps). If you project 100 clients in year one, you need quotes based on expected peak load, which is essentiall for managing capacity.
- Bandwidth usage per client.
- Colocation rack space needs.
- Contracted power draw rates.
Managing Colocation Spend
Since this cost hits 60%, optimization is crucial before 2026. Negotiate long-term contracts for committed bandwidth tiers to avoid expensive overage charges when usage spikes. Avoid over-provisioning hardware early on; right-size your initial footprint to match actual demand.
- Negotiate tiered bandwidth pricing.
- Right-size initial rack deployment.
- Audit usage quarterly for waste.
Margin Impact Check
If your tiered subscription pricing doesn't cover the underlying variable cost structure—especially when bandwidth spikes—your gross margin will compress rapidly. This cost isn't fixed like office rent; it scales directly with every successful customer connection you onboard, so watch that load factor closely.
Running Cost 5 : Marketing Spend
Marketing Budget Baseline
You must plan for $10,000 monthly, totaling $120,000 annually, dedicated to online marketing efforts. This budget is set to achieve your initial goal of acquiring a new Network-as-a-Service customer for a $1,500 Customer Acquisition Cost (CAC). That's the number you must defend.
Marketing Input Needs
This $10,000 covers digital spending to find SMBs needing robust infrastructure management. To validate the $1,500 CAC, you need to track the full funnel, from initial click to signed contract. If you spend $10k and only sign 5 clients, your CAC is $2,000, which is too high. Here’s the quick math on what drives this spend:
- Targeting US SMBs in finance or healthcare.
- Measuring conversion from lead to signed subscription.
- Tracking cost per qualified demo scheduled.
Marketing Efficiency Tactics
Reducing CAC below $1,500 depends on improving conversion quality, not just slashing the budget. Since you sell complex NaaS, cheap leads won't close; you need decision-makers ready for a subscription discussion. Don't defintely chase high volume if the lead quality is poor, as that just burns cash faster. Keep focus tight.
- Test paid search keywords rigorously.
- Refine landing pages for service clarity.
- Leverage existing professional networks first.
CAC Impact on Operations
If your CAC climbs above $1,500, your runway shortens fast. Remember, fixed overhead is substantial: $49,583 for payroll alone, plus $11,700 in core monthly overhead (Rent, Software, Insurance, Utilities). Every dollar over budget on acquisition directly pressures your ability to cover those fixed costs.
Running Cost 6 : Insurance/Compliance
Insurance Budget
You must budget $2,000 monthly for mandatory insurance and compliance costs associated with managing client network infrastructure. This covers professional liability and adherence to regulations governing sensitive business data handling.
Cost Coverage
This $2,000 monthly allocation covers essential protection for offering Network-as-a-Service. It includes professional liability insurance against service failure claims and costs related to regulatory adherence for sensitive client data. This is a non-negotiable fixed operating expense.
- Cover professional liability risks.
- Pay for regulatory adherence fees.
- Fixed monthly cost, no variable component.
Managing Compliance
Managing compliance costs means securing quotes from specialized carriers who understand IT service risks. Don't bundle this with general business insurance; specialized coverage is key. If you onboard healthcare clients, expect compliance costs to rise above this baseline defintely.
- Get specialized carrier quotes early.
- Review deductibles annually.
- Don't skimp on liability coverage.
Action Point
For a business handling critical network uptime for SMBs, treating this $2,000 as a sunk cost is smart planning. If your initial client base is heavily regulated, you should immediately increase this reserve by 25% until you secure firm annual quotes.
Running Cost 7 : Utilities/Internet
Fixed Utility Budget
You must budget $1,200 monthly for Utilities and Internet connectivity. This cost is a fixed operational expense that supports your core service delivery, meaning it needs coverage before any revenue comes in. Reliable, high-speed access is non-negotiable for managing client networks.
Cost Inputs
This $1,200 estimate covers essential connectivity for your operations center and office space. It is a fixed cost, unlike Data Center Fees which scale with revenue starting in 2026. Ensure you get quotes for redundant, high-speed lines now, as downtime stops sales and service delivery dead.
- Fixed monthly cost for HQ operations.
- Essential for 24/7 monitoring capability.
- Budgeted before revenue generation starts.
Managing Connectivity
You can't skimp on speed for this line item; reliability is paramount for a Network-as-a-Service provider. Look to bundle office internet with your main carrier contracts for potential small discounts, maybe 5% to 10% savings. Avoid signing long contracts until you confirm your physical office footprint needs.
- Prioritize uptime over minor cost cuts.
- Bundle services where possible for leverage.
- Review SLAs annually, not quarterly.
Operational Reality
Treat this expense as foundational overhead, similar to your $6,000 Office Rent. If your actual cost exceeds $1,200, you need to re-evaluate the required service tier immediately, as this budget line is tight for enterprise-grade uptime.
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Frequently Asked Questions
Core operating expenses (wages, fixed overhead, and marketing) start around $76,583 monthly in 2026, excluding variable COGS Payroll alone is about $50,000, and fixed G&A is $17,000