I have an offer from a hosting business to buy it out. What things should I check? How should I value the deal?

TIA. :)

Buying a already built hosting company can be very good as most of the work is done for you but I would suggest you check the following:

1) Do a number of google searches with the companies name and see what sort of results come up
2) Check on as many review sites to see what (if any) customers think of the company
3) Ask to see all records relating to income & expenses
4) Also ask to see a full list of clients / accounts with details like when they joined and if any of the clients have special requirements
5) Check the location & company that hosts the server/vps/reseller account and see if you may have problems with them
6) Try and base your offer on the amount of income that the company gets from their older clients not ones that have just joined.

Hope that helps :) I probably have missed some ideas but sure other members here will comment...

Make sure the host was selling packages that you can still afford to sell. Theres been a guy running around opening up hosting companies, offering HUGE amounts of space and bandwidth on a $10-20 yearly plan, and then selling the company for a couple hundred bucks....


Needless to say, the person that buys it has to talk to the clients and let them know that they can't continue paying so little for so much, and most clients end up leaving.

Make sure the host was selling packages that you can still afford to sell. Theres been a guy running around opening up hosting companies, offering HUGE amounts of space and bandwidth on a $10-20 yearly plan, and then selling the company for a couple hundred bucks....


Needless to say, the person that buys it has to talk to the clients and let them know that they can't continue paying so little for so much, and most clients end up leaving.
When you buy a hosting company, you're also buying their brand and reputation, how could you expect to come in and change their hosting plans like that?

Thanks so much guys for replies.

There are not too many apprehensions about the profitability. The fella charges more than I do :stickout: and I know him personally since more than half a decade. He is selling off because of his other more rewarding business and not because of loss.

He isn't so big that there will be reviews about his hosting anywhere on net. It's mainly reseller hosting and at max VPS.

My main concern is the valuation. How to do that? Probably he won't hand-over his brand to me but shift the clients with personal recommendation. Not too sure though.

Thanks so much guys for replies.

There are not too many apprehensions about the profitability. The fella charges more than I do :stickout: and I know him personally since more than half a decade. He is selling off because of his other more rewarding business and not because of loss.

He isn't so big that there will be reviews about his hosting anywhere on net. It's mainly reseller hosting and at max VPS.

My main concern is the valuation. How to do that? Probably he won't hand-over his brand to me but shift the clients with personal recommendation. Not too sure though.

Normally you would pay for 6-12 months of profit. So lets say his monthly profit is $300. you might pay him $1800-$3600 for them.