How to Start a Wi-Fi Hotspot Business

It's Simple to Start a Wi-Fi Hotspot Business

You can start a Wi-Fi hotspot business from almost anywhere, including your home. In fact, home might be the best place to start as you won't need to get permission to install the equipment, and you won't have to share any of the income with anyone else. Also, people are more likely to pay for Internet access at home in residential areas than when just having a coffee in a cafe.

This does not mean that if you are a coffee shop owner, you cannot charge customers for Wi-Fi access, but many commercial/shopping areas now have free Wi-Fi, so it is unlikely that people will pay for something that they can get for free.

In the past few years, the cost of equipment and technical knowledge required has fallen significantly, making starting this type of business very simple.

You can charge people to use the service on an hourly, daily, weekly, monthly, or yearly basis.

Internet Connection

The first thing you will need is an Internet connection. You must make sure it is one which allows resale, so you will most likely need a business Internet connection. As it will be shared you should get the fastest connection available and ensure that it comes with an unlimited download allowance.

You will not be using the Wi-Fi signal from the router supplied by your ISP so you should base your choice of ISP on cost, speed, and standard of the service provided, not on reviews of the router's Wi-Fi performance.

When choosing an Internet provider to support your Wi-Fi hotspot you should choose the best service you can afford. Not all services are the same. You might be tempted to choose the first cheap Internet service you find, but it always pays to do your research first. Just a quick Google search for reviews of the service you are considering using will provide invaluable information and save you a whole lot of trouble later down the line.

Something few cheap Internet service providers fail to mention is 'contention ratio.' Simply put, this is the number of properties who will be sharing the advertised bandwidth. Contention ratios are usually 20:1 or 50:1. This means there will be between 20 and 50 people sharing that 'Up To 8Mb download speed' advertised.

Yes, I'll say it again just in case you missed it, up to 50 people will be sharing a 8Mb Internet connection!

This is why you almost never get the download speed advertised because all your neighbours are hogging the bandwidth. So you must keep this in mind when shopping around for an Internet connection for your Wi-Fi hotspot.

Here are the most common types of Internet service available.

• ADSL: This is the service which uses the old copper telephone wires. Most of these wires are old and if you are more than a few miles from the telephone exchange the service and speed is going to be pretty poor.
• Fibre: Maximum speeds can be very good but only if fibre is used from one end to the other. Often the 'last mile' will still use old copper wires so a lot of the speed is lost. Only Fibre-to-the-Home (FTTH) or Fibre-to-the-Premises (FTTP), where no copper cabling is used, will achieve true Fibre speeds but services are expensive and limited.
• Leased Line: This is the best option and is what most businesses will use. It is however very expensive and usually subject to a hefty monthly fee. It is an 'Uncontented' or 'Dedicated' line which means the contention ratio will be 1:1, i.e. if the advertised speed is 8Mb, you will get 8Mb and it will not be shared with anyone else.

The Equipment

To keep this as simple as possible and allow anyone, regardless of technical knowledge, to start a Wi-Fi business, I suggest using the free Open-Mesh/Cloudtrax system. In order to set up a paid-for Wi-Fi network, you will need a special Wi-Fi router.

You simply purchase the Open-Mesh router, add a few details from the back of the router into the Cloudtrax central Wi-Fi network management dashboard (free), plug in the Open-Mesh router to your Internet router and the Wi-Fi network is up and running.

Wi-Fi Management System - CloudTrax

In order to charge customers for access, you will need a central Wi-Fi network management system. There are many available (free & paid for), but I suggest you use the free one provided by CloudTrax. You will need to open an account and enter a few simple set up details such as the network name (SSID) which customers will see when they connect to your network. You will also need to open a PayPal account (free), if you don't already have one, to accept payments for access from customers. The Cloudtrax system includes free splash/landing pages which can be customised and full Paypal integration.

Using the CloudTrax dashboard, you can access, monitor and control your Wi-Fi network from anywhere in the world with an Internet connection, including from a smartphone.

To use your Wi-Fi service the customer will connect to your Wi-Fi network and when they open a webpage they will be redirected to your splash/landing page. Here you can put some information about the service, instructions, TOS or even advertising. On the splash/landing page the customer can select the amount of access time they require which you can set at anything from 1 hour to one year.

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I would suggest offering a range of access packages such as;

• 1 Hour
• 1 Day
• 2 Days
• 1 Week
• 1 Month
• 3 Months
• 1 Year

After the customer selects their chosen access package, they will be taken to Paypal to pay and issued with an access voucher. Everything is automated and once set up requires very little input on your part. You can also create access vouchers if the customer wants to pay in cash or over the phone (if you have card processing facilities such as the new Paypal Card Reader for iPhone/Android phones).

CloudTrax Dashboard

How to Set Up a CloudTrax/Open-Mesh Wi-Fi Network

Positioning of Equipment

When starting a Wi-Fi business you want to provide coverage to the widest possible area in order to reach as many potential customers as possible. Wi-Fi signals only have a range of about 100ft indoors and 300ft outdoors so you must place/install your routers where you think they will provide the best coverage.

In a cafe or coffee shop this will probably be on a wall or ceiling. In a residential area I would suggest a roof-mounted or window-mounted router where they will get the best clear line of sight (LoS). This means the signal can travel directly to users without having to pass through solid objects like walls, floors and ceilings.

If you have a balcony or window overlooking many other properties this would be the best place to put the Wi-Fi router.

Can I Just Use One Big Antenna? How Many Antennas Will I need for X sized Area?

Wi-Fi signals only have a range of about 100ft indoors and 300ft outdoors, hence you will need to have a Wi-Fi router/repeater spaced approximately every 100ft indoors and 300ft outdoors, and more if there are lots of obstructions.

It is true that you can increase the power output of Wi-Fi routers/Access Points, but firstly this may break local laws and secondly it is pointless because your customers will be able to receive a strong signal but their device will not be powerful enough to 'talk' back to the router, this will just result in lots of unhappy customers who can't use your service and time wasted trying to fix problems you created.

I have written this guide to help people, and I'm happy to answer questions, but I still receive lots of questions about this exact point. Since I have devoted a paragraph to explaining this point, I will just delete any questions such as 'How many units/antennas do I need for 10km sq.?' Or 'I want to provide Wi-Fi to a village with 1000 people, how many routers do I need? as it means the guide has not been read properly and starting this type of business requires a lot of initiative, problem solving, working alone, and there are no real guides to work from, I pretty much learnt everything on my own, so if you have this guide then you already have a massive advantage and if you can't take onboard the information, then maybe you should stick to a day job.

Sorry if this sounds a bit harsh but I'm just trying to be honest.

Power Over Ethernet

The Open-Mesh router supports 'Power over Ethernet' (PoE) which means the data and power for the unit travels over the same Ethernet cable at just 12 volts. So there is no risk of electrical shock from outdoor installations and a qualified electrician is not needed to install outdoor units.

The maximum length of the Ethernet cable with PoE support is 300ft, so your Internet router can be installed near the phone line and the Wi-Fi units can be installed in other rooms or on rooftops up to 300ft away to create a much larger coverage area. You can also connect another unit to the first one with another 300ft cable and so on in a daisy-chain formation. Weatherproof Ethernet cable can be used for outdoor installations.

Scaling up the Business

This business is highly scalable. You can start with just one unit and as demand or funding grows you can just add more units to the system to increase coverage and reach more potential customers.

The meshing capabilities of the Open-Mesh routers allow you to simply plug in another unit in to a power outlet and it will connect to the other units creating a much larger coverage area and reaching even more customers.

I have created a more in-depth page on the CloudTrax system and meshing capabilities here.

Open-Mesh MR900 Performance Wi-Fi Hotspot Router

Open-Mesh have just created a new product, the MR900, a high-performance router designed for high-usage areas and installations. It supports the common 2.4Ghz range and the less congested 5Ghz range to give optimum performance and speed, up to 900Mbps.

Just like the OM2P routers, the MAC address only needs to be added to your Cloudtrax dashboard and the network/hotspot is up and running. It can also be added to existing networks and will mesh with OM2 routers.

• Supports 50 - 100 Simultaneous Users
• AR9558 700mhz Processor
• 182MB DRAM
• Backwards Compatible with OM2P

I have not tested this unit yet but taking into account the performance of other Open-Mesh equipment I expect it should be very good. It is more expensive than the OM2P routers but is much more powerful and can support more users. The 5Ghz support is a big advantage as 5Ghz is being incorporated into more devices such as laptops and smartphones.

You can see a full list of the specifications on Amazon.

Other Wi-Fi Equipment to Consider

Although the Open-Mesh OM2 routers have been mentioned throughout this page it does not mean that they are the only Wi-Fi router that can be used to create a paid-for Wi-Fi hotspot. Another popular manufacturer of WISP (Wireless Internet Service Provider) equipment is Ubiquiti. Their products fall into the same price range with similar functionality and can be used with the Cloudtrax Wi-Fi hotspot management system.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2013 SpaceShanty

Post Your Question or Comments Here

Manjee on August 30, 2020:

Hi, good evening. I want to start my outdoor wifi business too but there are some areas in our village that can’t reached by a signal, should I ask the main provider about 20km away from us and open this up? There are hot spots/wifi zones that is hackable how am I to evade this said hackers? For my wifi to be inpregnable? Thanks

Haile Admassie on August 23, 2020:

please tell me all the require accessories to start

SpaceShanty (author) from United Kingdom on August 14, 2020:

@Mohammed ALAMIN

You can cover an area of any size. For an area of 10km (I assume you mean 10km/sq) I would recommend having a router/access point connected to the Internet for each 0.5km/sq or 1km/sq area and then using meshing to increase coverage for that area.

WiFi signals only have a range of about 100ft indoors and 300ft outdoors, hence you will need to have a WiFi router/repeater spaced approximately every 100ft indoors and 300ft outdoors, and more if there are lots of obstructions

SpaceShanty (author) from United Kingdom on August 11, 2020:

@David

Yes, Open-Mesh have discontinued the product range, I will research some new products and update the article.

David on August 09, 2020:

Since open-mesh products are now discontinued, which product is the best to replace this one.

SpaceShanty (author) from United Kingdom on July 14, 2020:

@Mkhululi Sobekwa

I do not think this will be an issue as the majority of fixed internet service providers offer unlimited downloads/bandwidth.

If you are looking to start a WiFi hotspot business you must always look for an unlimited internet service provider.

Mkhululi Sobekwa on July 08, 2020:

Hey man i see all what your saying but, if you get a lot of people in one hour, are you not going to find yourself paying a lot of money to the service provider?

Because people will download movies and series

Nahashon Ngare on June 01, 2020:

Which is the Best marketting strategy that can be used. Or can i target apartments, or maybe can target open space public transport areas. Am Nahashon Ngare from kenya

SpaceShanty (author) from United Kingdom on January 21, 2020:

@Auni

Every set up is very different due to physical environment, number of users, available download speed etc.

But as a VERY rough guide each WiFi hotspot router will have a range of up to 50 meters indoors and 100 meters outside. However the further away a device is from the router the slower the connection will be. In environments with lots of obstructions like buildings and trees this can be drastically reduced.

So as a very rough guide I would create a map of the area you wish to cover and divide it in to a grid with 50 meter spacing. Try putting hotspot routers 100 meters apart and then test the speed and coverage. If it is poor then place routers 50 meters apart.

Auni on January 17, 2020:

I want to start this business in my small village i need to know more

LexApp on June 02, 2019:

Thanks for this info

SpaceShanty (author) from United Kingdom on April 27, 2019:

Hi HowardHelg!

Inheriting a WiFi business can be both a blessing and a hassle, unfortunately it sounds like you are experiencing the latter at the moment! Am I understanding you correctly that the main issue you are having is with the payment process programme/software?

If so, I suggest you do what I did and switch to Cloudtrax, it's completely free and you will only pay a small percentage on Paypal fees received for payments for access to the service (i.e. customers buying access to your service.)

The only issue is that your existing equipment must be able to run the OpenMesh firmware (free), if it does that you will just need to 'flash' your APs/Routers with the new firmware which is pretty simple and there are lots of YouTube tutorials.

If you know the model numbers of your APs/Routers then I can tell you if they are supported or not.

I have not run the WiFi business for a few years now and see that OpenMesh has now become a new company, I cannot comment on the chances but I think you should take a look at both the Cloudtrax website and OpenMesh https://www.openmesh.com/datto-networking

Good luck!

HowardHelg on April 25, 2019:

Hello I am new to this forum and have a couple of questions I hope you can answer? I own and operate a small WISP in the south Pacific Islands. I have had nothing but problems trying to connect payment gateways so my customers can pay via credit card at my Hot Spots. I inherited this business when both of my son in laws left for various reasons. I was intrigued with the the technology and could see the future value in it. Its been 10 years and I am still in business although most of my investment has been out of pocket. If anyone has experience in payment gateways any advice would be greatly appreciated. Thanks.

SpaceShanty (author) from United Kingdom on September 16, 2018:

Domestic yes, which is why you should get a business line and check the ToS.

Rajat on August 29, 2018:

Thnxx ...you have a whole lot of stuff about wifi at the same place...

Its pretty helpful...

#Keep it up...

Francis432 on November 08, 2017:

Reselling bandwidth is most likely against the ToS of your internet provider.

SpaceShanty (author) from United Kingdom on June 06, 2017:

Serge,

Sorry for the late reply, your comment went in to the 'spam' folder here but I think you raise an important issue which I have considered myself.

Firstly I am not a lawyer so please do not take my answer as 100% accurate legal advice, also different countries have different laws.

Everything everyone does online is tracked or logged somewhere, somehow by someone, which is good and bad!

In other words if someone did do something very illegal (child p0rn probably being the most concerning activity) on your network there would be a record somewhere of which device (smartphone/laptop/table/pc) as well as MAC address and serial number of the device. So if the police did come to investigate you could explain that you run a WiFi network, and they are free to check all your devices forensically and would find out it was not you. However this probably isn't ideal either.

The other option is to have some kind of parental block on the network which stops all adult/illegal file sharing sites. Again this might upset some customers who want to view legal adult stuff!

One other option is to monitor and record all of the activity on your network, BUT then you are risking breaching data protection privacy laws!

So there is no 100% right answer here really. Just use your best judgement and maybe seek some legal advice first.

SpaceShanty (author) from United Kingdom on June 06, 2017:

Mike, Happy to hear this helped you!

SpaceShanty (author) from United Kingdom on June 06, 2017:

Ovidiu, I am surprised too, but I have been using it for years and they have never asked for a penny. I think it stared as an MIT project, I guess not everyone in the world only does things for money. Yes they might make something from the routers but you can flash other bands of routers too.

SpaceShanty (author) from United Kingdom on June 06, 2017:

You can start this business almost anywhere in the world.

SpaceShanty (author) from United Kingdom on June 06, 2017:

Huduma Poa, You can just order the OMP2 routers from their website http://www.open-mesh.com/products/access-points.ht... eBay, Amazon or many other websites.

SpaceShanty (author) from United Kingdom on June 19, 2016:

Abdulrasheed, Thanks for your comment and good luck!

Abdulrasheed on June 08, 2016:

Hi, thanks for your time on this article. Just wanna be a pioneer of a wifi distribution company in my country. I am happy it's this cheap. I will dedicate £10,000 for this project. I need to grow, beginning with a work force of 15 employees. Once again, thanks a lot and stay blessed

Ferhan Patel from Montreal, Canada on April 27, 2016:

Very interesting idea. Thanks for the information!

SpaceShanty (author) from United Kingdom on April 05, 2016:

Yahya, Yes 3km Sq. WiFi zone is feasible, you may need a larger budget than $1200.

Unless you can have a unit connected to the Internet every 300ft you will have to use repeaters.

SpaceShanty (author) from United Kingdom on April 05, 2016:

mohamed, The equipment you can buy from the vendors website, eBay, Amazon or any other major networking equipment website. As the article states I suggest you use Open-Mesh routers and the Cloudtrax system management dashboard. The equipment does not require any configuration, you just enter the MAC address of the router in to your Cloudtrax dashboard.

SpaceShanty (author) from United Kingdom on April 05, 2016:

Anuj lohiya, As stated in the article, you can set up a network for the cost of a single AP (router) which is less then $100 new, far less with a used device.

SpaceShanty (author) from United Kingdom on April 05, 2016:

tushar, With the Cloudtrax system you can limit the speed for any user, regardless of the device they are using.

SpaceShanty (author) from United Kingdom on April 05, 2016:

Avdhi Kabra, If the router can be flashed with third party firmware then yes.

mohamed on November 15, 2015:

thank you so much for sharing such wonderful information. i have been on the internet over the last couple of days trying to search for information on how to start a networking service i.e providing both wireless and wired network . i also walked through most of our shops in Nairobi,Kenya but it is too unfortunate that most of the networking equipment i find on the net are not available here. finally, i have not done any IT course but have the basic computer skills. i would appreciate so much if you can give me guidance on the best equipment to buy for my potential business and how to configure them. your kind response is highly awaited. thank you so much.

SpaceShanty (author) from United Kingdom on November 04, 2015:

alanhalley, I know from personal experience that you can use other brands but you will have to 'flash' them (install firmware) with Open-Mesh firmware. And they say so on their site! https://dev.cloudtrax.com/projects/dev/wiki/Ap51-s...

SpaceShanty (author) from United Kingdom on November 04, 2015:

Vikas Phougat, The Open Mesh routers support 'Power over Ethernet' (PoE). You will a special 'power injector' which Open Mesh supply and just a normal/standard Ethernet cable, the maximum length is 300ft. Instead of plugging the power adapter directly into the router you plug it into the power injector. There is a picture in this hub https://discover.hubpages.com/business/How-To-Make...

Yahya on October 08, 2015:

Hi

I want to know if 3 square km wi fi zone is feasible(budget of $1200)

if i do not use any repeater,because it is not possible here.

And you also said that many laptop,dongle etc will not support more than 300 ft range but what if we increase their range also means replace them with high range dongles.

I want to know what i have to do in that case.

Thank you very much you reply to almost everyone :-)

SpaceShanty (author) from United Kingdom on September 18, 2015:

YAKUBU SKY, Do you have Skype?

YAKUBU SKY on September 18, 2015:

Thanks very moch my brother, i will try to buy and i need your parsonal contact.

SpaceShanty (author) from United Kingdom on September 17, 2015:

YAKUBU SKY,

Thanks for your comment. I do not sell the equipment myself, I just use it. You can click on any of the amazon links in the article to buy the Routers. Thanks

SpaceShanty (author) from United Kingdom on September 17, 2015:

alanhalley,

You can buy the open Mesh router from their USA site or Amazon and get them delivered to Brazil. Or you can flash one of the supported routers found here https://dev.open-mesh.com/projects/dev/wiki/Ap51-s...

YAKUBU SKY on September 17, 2015:

My brother thank you for supporting me, i want to buy all this divice, please how i will send you morney to buy it for me?

alanhalley on September 09, 2015:

I'd like to offer free WiFi in my neighbor's restaurant. I've read about Open-Mesh and that seems like a good hardware/software solution, but I'm in Brazil and Open-Mesh products are not sold here. Can I use another brand of AP with CloudTrax?

Thanks for any ideas.

Alan

SpaceShanty (author) from United Kingdom on September 01, 2015:

YAKUBU SKY,

Hi! You can just use an Open-Mesh Router ($75 USD), you can add a bigger antenna ($15), Cloudtrax (FREE). That is all you need really to get started, you will need to set it up on a computer but as the system is cloud based you won't need a computer to run it. You can produce vouchers in the Cloudtrax dashboard which produces a code which you can give to paying customers. I think you can buy a small printer for the vouchers but this is more suited to hotels, I have never used one.

SpaceShanty (author) from United Kingdom on August 27, 2015:

Shanky, Please read my other guide which is far more detailed. Thanks

Here is the link https://discover.hubpages.com/technology/How-to-Bu...

SpaceShanty (author) from United Kingdom on August 27, 2015:

There is always a risk with any wireless technology, even your cellphone data can be hacked. Security is getting much better but you can sell VPN services to customers who are concerned about security.

Bhavesh Sathawara on August 25, 2015:

Hi , I want to start this business in my city, How to stay safe by using public wifi? Security can be issue? do we need to use VPN ?

Thank you

shanky on August 23, 2015:

hello shanty ...I Want to a wifi service in my city as a bussiness can tell me briefly how to start it from the beginning.

I am waiting for your response

SpaceShanty (author) from United Kingdom on July 27, 2015:

You could buy 2 Open-Mesh WiFi routers with $100 to start. Just use one to start your n