Hi all,

Not sure if this is the correct place to post but I know there are some knowledgable guys here that may be able to help ?

I've been building up a hosting / domain reg ( and some web design ) company over the past couple of years - it's been a hard slog but it's become quite successful. It's a UK based firm offering win2k hosting on a server we have in the States.

I'm getting tired of being tied to the computer 24/7 and am have also started something new ( still 'net related but not hosting etc. ) and am thinking about selling the company and moving on.

The question is what is a hosting company worth - our clients are all UK based, are very loyal and we have a very professional website. I've slogged really hard at this and want to pass it on.

The income from the business is currently around £10,000 ( $15,000 ) per annum and we're signing up new customers at the rate of 1 or 2 a week so in 12 months it the income should be around double what it is now.

Are there any accepted formulas for the worth of the company - I understand that for a bricks and mortar company the going rate is something like 2 or 3 times the annual turnover but I doubt this applies to our type of business ?

Any input greatfully received.

I've heard 1.5x annual revenue, but it really is not as simple as that. It all depends on the plans you're offering, the number of customers, and many other things. It would be a little easier if you posted the following:

Number of clients
Billing cycles, and the number of clients on each cycle (obviously if all of your clients have prepaid for a full year, your company would be worth much less than if all of your clients were paying monthly)
Hosting Plans you offer, and number of people on each plan.
Any other financial information you feel is important.

I've seen quite a few companies sold on these boards, so I'd maybe post in the advertising section and see if you can get any takers! :)

Thanks for the reply - to try to answer some of the questions :

The number of clients is around 130 total, about 80 of which are hosting customers, about a dozen are web site customers ( some paying on a monthly plan ) and the rest are domain names only though some have multiple domains so we're looking after around 150-160 domains.

Out of the 80 odd hosting customers around 70 are paying £100 ($150) per year with the rest paying between £50 ($75) and £200 ($300) per year.

Hosting customers are probably 75% paying yearly and 25% paying monthly however many of our customers have now been with us a year or more and yearly renewals are going through every month so there's a regular income.

It's not something that's been set up in the last month or so - these are good loyal customers ( most of whom I have got to know personally ) and would definitely stay with the company if it moved to someone that continued the good service they've been getting. We virtually never lose customers - have lost maybe 3 or 4 in all the time we've been running ( must be doing something right ;) )

I'm not sure yet if the company is going to be up for sale shortly or if I'll hold on another year - depends how my other projects pan out - but am trying to get an idea of what it would be worth to add into the equation.

Thanks, P