What are points to consider before you buy customers from any hosting companies,

I got a offer from a company who started price by $3000 for their 35 customers + resellers. Finally they were agreed to sell it for only $500. We didnt took that offer as we thought its just a short cut to earn money

Even i can book 50 domains or buy domains form other peoples and create the hosting accounts for each of these 50 websites and then come to market saying i want to sell 50 customers. to set up these 50 customers i dont thing it will cost more then $300-$400 including domains.


So i want to check out if any one knows what all points we should consider before buying customers or small companies?

You need to make them show you 12 months of bank statements and credit card/Paypal receipts, at the very least.

--Tina

They showed me Paypal statement. But how much time it takes to save as the paypal page and edit its contains and again call from browser. We can show $10000000 in any paypal account even is paypal has no value. I hope you are getting me.

If in doubt - walk away
If they cant provide the evidence you require (after signing an NDA) - walk away
If you feel uncomfortable with the sale/purchase - walk away
etc :D

Buy yourself a copy of "How to Buy a Great Business at a Great Price" - its a bit of a tome the first time you read it, but wil give you plenty of insight and procedures to base your own on.

The more questions you ask hopefully you'll get more answers. If after asking all the questions you possibly can and still don't have all the answers you wanted, walk away.

There will always be another out there.

There are pretty easy ways to determine if it is legitimate or not. Don't accept printouts as final. Everyone here knows that you can create whatever you want to print out.

Double check everything, and you should do a little digging, including looking at their last years Tax Return, if they have an accountant, etc.

Has any one successfully taken over such hosting companies. Companies that are coming up to sell off are not bug companies so accounts and tax returns from these companies are least expected.

Big or small, the "company" should have bank information to show as proof of income.

--Tina

If the purchase is large enough, pay an auditor to do a quick audit of their books. Then you'll know if revenues are what they claim them to be.

Any good and mid-size company looking to sell will already have audited financial statements available for the past few years before they start to sell anyway.

Big or small, the "company" should have bank information to show as proof of income.

--Tina

Definitely do your due diligence. Obtain bank reports for as long as possible, tax filings, etc.

It would be beneficial for you to speak with an attorney to go over all legal filings, contracts, etc.

Ask for login information to double check client information (numbers, packages, terms, pricing, etc.)

Others have made mention of books and guides online, there are many available and it'd be a great idea to look into those as well.