I feel it is time to sell my hosting business for personal reasons. No other details are provided as this post is not a request for offers, and it is inappropriate at this time to contact me. I will be posting in the Offers forum when I have made my decision.

What I'm looking to find out right now is, what is the usual process for this? Mostly from a technical standpoint. Do buyers usually essentially buy customers and transfer them to their current host? Do they essentially take over operation and keep the server, etc? Depends on the situation? For scale purposes, I have about 100 clients.

What I'm most curious about - I use a control panel and management software I developed over time. Account management is web-based and new-account setup is very simple. But much of the server management is not automated - I've always been comfortable managing the server from a command-line and most everything is compiled from source as new versions are available - not RPM's. Now, would I be better off converting to a cPanel (or other) system, or is the management system (php with source code) essentially valuable in itself? Or is it typical to just sell the clients and the business/brand, not really the actual "server"? Depends on who's buying? :D So many variables, and so new to me - didn't spend much time learning how to sell the company.

I was going to keep this simple, but I'm really gonna miss my customers. :bawling: I think what I'll probably do is get a low-end dedicated server for my own personal sites and close friends (who aren't paying anyway.) But 4 years... despite being a "side-business" it's become a integral part of my identity, really. But I gotta let something go.

Thanks for any comments or "case study" stories about others who have sold or buy companies.

TheWHIR may be able to help:

http://www.thewhir.com/hostassets/

Hi Adam,

First of all, it's good that you're doing real research into this and not just looking at the dollar signs (as in "I can get $5000 for my hosting company! Woohoo!")

It sounds to me like you just don't have time for it and/or the hosting business doesn't make you enough money. I wonder if you are really looking for a solution other than "sell" -- perhaps an automated billing solution so you don't have to constantly invoice clients, or outsourcing some of your support to a friend or trusted relative to help ease the burden?

Of course, you mention friends who don't pay for hosting -- that could be part of the problem, too. In my case, instead of giving friends free hosting, I charge them a reduced rate (usually $10 a month for one of our Advanced plans, which are normally $14-$19 a month.) Most of my friends prefer it that way -- that way they get a good deal, but they don't feel like an obligation or a burden.

In fact, one client of mine was being given free hosting by a friend. She begged him and begged him to charge her so she wouldn't feel like a burden when she called and asked him to set up accounts, etc., but he refused. She left his hosting company and went to mine because she felt like she could call me on the phone and ask about problems since she was paying me.

Moral of the story: If people pay, it's better all the way around -- they're more satisfied with the service (especially if they're running a business; it's tax-deductible and they need their website to be up and running), and you're happier because you're getting paid.

If you think you can't charge the people who are currently getting hosting for free, I'd say you're mostly wrong. Just explain the situation: "Look, my costs to provide this service have gone up and I'm faced with either selling the company or starting to charge everyone." They'll gladly pay $10 a month or so to host with you, especially if you toss them freebies. If I were you, I'd consisder that route before I'd ever consider selling the company.

Basically, what I am saying is to look at ways to make your time spent on this venture worthwhile, instead of taking the "this isn't worth it" route. This may include getting a packaged control panel instead of using your own custom-built one. Since you're a sysadmin already, stay far away from cPanel -- you'll hate it. Try DirectAdmin or Plesk -- either will work well for you. DirectAdmin only does accounts and restarting services, and it's very inexpensive; this will probably be your best bet.

Good luck with whatever you choose to do!

Thanks for the advice Erica (and others who have pointed me to articles). It's not really a money issue, it's been doing pretty well for me, and I think I made it so easy I got bored with it for a while. I've been doing it for 4 years as a single-employee operation. I'm ready to start "living" again :cool: -- be able to take off for the weekend. Part of it is because my past jobs have required me to be on-call, so it was already pretty well tied down, and I loved the responsibility. But late this summer I got a good job as Sr. Database Administrator / Application Developer for a large non-profit company (provides diverse communication services for the deaf and hard-of-hearing, such as TTY Relay) with national headquarters 8 blocks from my house. At the same time, the hosting side has been really easy. Tough problem to have, right?

Since then I've had a few small issues, and things have picked up a little in the support department. Even though I love helping customers, it's just been harder to jump on every email, especially since I'm becoming involved in other things that also require my attention. I started hosting because I loved it, not because I was good at business. I've learned a ton about business. Like you suggested, after about a year I wrote a good automated billing manager and it made a world of difference - I could work on the server, support customers, and the day-to-day billing managed itself. Every morning I get an email about yesterday's deposits.

I do worry that I'll miss the income, but I've got a good day job, and I think it's reached the point where I'd rather have more evenings and weekends free.

"Free" hosting probably only accounts for 5% of my domains, and I actually intend to keep them on a small server with my own personal sites/hobbies. If it goes down at 1AM Saturday morning and I'm passed out in a bar (for the first time ever), I'll fix it when I wake up Tuesday. Most of my friends have migrated to paid accounts anyway, mostly for the reasons you gave - it's guilt-free to pay! So while I feel I am making pretty good money, I'm just not able to give it my full attention, and I'd rather sell than go back on 4 years of "fanatical" support. Purely a personal decision really, nothing about the business could change - I already love it! It will be hard, but, Adam has too much and doesn't want to burn out and refer to himself in third person all the time. Webhosting... my precious! Though the "easiest" of my hobbies, it's also the heaviest burden.

Gosh, what a long and emotional post. This summer I would have given 1:3 odds that I'd quit my day job and host full time. But I had to choose one or the other. If you still enjoy webhosting, keep doing it! As for me, it's time to logout and let someone else be r00t.

Hello! :)

Very mature and open eyed decision that you stop when you are at top, and not step by step slowly "destroy" a great service( your support etc) due to other important things in life.

:)

First off, I will say that I commend you for your maturity and responsability in knowing when you've had enough. Knowing this much already shows that quality of service/support you've given your customers over the past 4 years.

As for selling your company, what it's worth/what people are interested in buying of it (clients, whole package, etc) is completely subjective.

For example, if someone was interested in starting up a hosting company and had a chunk of change to invest, they may want to buy your entire company (clients, brand, etc.) and grow from there. Others have started their own companies already and purchase clients from hosting companies in order to expand an existing company/client base of their own. Sometimes the brand is important to them, but not always.

As for what the company as a whole is worth, there are numerous factors to keep in mind. ie. brand recognition, client stability (how long they've been with you), hardware, software, designs, etc.

In my personal opinion, if you ARE going to sell, you may get a little less for having your own software if you are selling to an existing company. The reason for this, is that they are setup with certain controls already (and support for these controls) that they would probably want to move the clients over to. This often means a higher churn rate, as oppose to clients going from server to server but keeping the same controls.

At any rate, I wish you the best of luck in whatever you decide and hope that you get fair market value for what you've worked so hard to build.