We are in the position to make an offer on another web hosting business that we see as a main competitor.

As I was previous employee of this business I have a fair idea of the loyalty of the customers. The service this currently one man show is about 4/10 and all of the accounts that are setup are still done by me as I am the server admin (outsourced to me). So I have him over the barrel. Also to state I am getting ~2 clients a month from him as well, but would like to get my customer base to a reasonable level.

I have two questions.

Should I try to get the clients by other (legally) means or purchase? (I didn't have a employee contract so I can approach these clients.)

If I was to make an offer what would be a resonable offer from the details below based on these figures.

Clients: ~60
Average Per Client: ~$15
Have been with business average: ~10months.

We were looking at a formula like

Clients * Average Per Client * 06 months. = $5400
Clients * Average Per Client * 09 months. = $8100
Clients * Average Per Client * 12 months. = $10800

First of all, approaching the clients directly is highly unethical, and I would suggest you do not do this.

As for a formula to buy out his customerbase, you need to ask him directly what it would take to get it.

I would start with a small offer like;

clients * ( clients monthly payment * 2 months )

See how that goes. However, I would personally buy out his customerbase and his business, and keep it silent.

I wasn't thinking of approaching his clients directly.

This business in question owes myself > $5000 in wages / supperannuation and commisions still. I already have legal issues proceeding these guys.

I know he would be looking at somewhere in the vacinity of $35,000 which I know is unreasonable.

The delima I have is if I stop giving him server admin support he would disappear anyway and loose a lot of his customers to us. But I feel to do this would tarnish my business.


Side Note: He pays upfront for any work that he does now.

Understood.

I had the same problem awhile ago. I changed the root passwords and installed a multitude of other little work-arounds to remain the superuser

In that case, I told the person up-front - You owe me x amount and if it isn't paid by x time, I will be undo'ing all work.

If you are in a position to buy him out, offer;

amount of customers * charge per month

Have you discussed with him any sort of payment terms for the work you have done?

Also, if you do end up deleting anything you have done make sure you have a backup....somewhere

What operating system is the server?

> I had the same problem awhile ago. I changed the root passwords and installed a multitude of other little work-arounds to remain the superuser
He is not the owner of the server for whom I have a contract with, but for him to add clients he needs to use my services.

> In that case, I told the person up-front - You owe me x amount and if it isn't paid by x time, I will be undo'ing all work.
I was employeed not contracted so I have some problems with that.

If you are in a position to buy him out, offer;

amount of customers * charge per month

> Have you discussed with him any sort of payment terms for the work you have done?
Not discussed, this will be a flat out offer take it or leave it. He isn't in the position to ask for more. It will be the offer - outstanding debt.

> Also, if you do end up deleting anything you have done make sure you have a backup....somewhere
Do daily backups :)

> What operating system is the server?
Redhat 7.X

Unless you had a contract in Australia you should be able to continue with what direction your going.

If you signed a contract it will be fairly hard to shake them.

Definately no contract, tried to get employer to sign contract for 18 months, but he refused.

Reasons why I left,

Couldn't get a straight answer where my super was held.
Wasn't guaranteed to receive 100% of my wage on time.
Was offered commissions that where never paid.
Tax wasn't paid on my wages.
Found out after I quit tat Super was never paid (over 2 years worth)

Now I am thinking of buying his clients (not the business as that is in financial trouble because Ex employees are after his money) which is causing me grief because of the situation I am in.


Why give him money that he owes me to get him out of financial trouble, just to let him stay around and be my competitor.

If he doesn't pay you your entitlements, what makes you think he will give you his clients?

Perhaps small claims court might be an avenue worth exploring.

> If he doesn't pay you your entitlements, what makes you think he will give you his clients?
He is broke! and needs a quick fix.

> Perhaps small claims court might be an avenue worth exploring.
Have tried that. (We are now hitting 7 months)

Small claims court will only get th money (if at all possible)

Your best bet is stop his access to ther servers.

Send a letter of demand with your alternative.

Make sure he responds in writing!

NO PAY NO ACCESS!

Make sure you put time limits on responses you don't wan this to drag out!