Hey Everyone,
One of my good friends has a hosting company that really copied off of ours (RN Web Design & Hosting). He can't handle alot of the tech support requests, so he needs to sell the company outright. I told him I would try and help him out alittle, hes been contacting some private companies, but no luck.

First of all, it would be a total buyout. Meaning you would take servers, clients, email accounts, and much more.

Here is basically what he has:
- 100-130 Clients
- 2 Cobalt Raq 4i Servers
- Been hosting since January
- 800 Phone number
- Recieved about 70 accounts in March
- Custom Website
- Most clients pay 1 year upfront

Here is the breakdown of the services:
- About 60 people for $2.95/month
- About 40 people for $4.95/month
- About 10 people for $9.95/month
- About 4 people for over $19.95/month

They really just copied off our sites services, and we didnt mind much. I was willing to purchase it, but since we just purchased another company, we are low on cash. He isn't looking for much, just something to compensate his efforts. The company is doing very well, and he wants to have someone who will take everything and will keep it going. The clients are friendly and do not need much support, but sometimes they need help. He normally gets somewhere around 50 emails a day, most are sales emails.

Well, hopefully someone can post here the prices they would give a company like this. The business can easily gross about 120 clients a month.

Thanks,

Jim

This person emailed us with the request and even called us. We were interested until you read his auto-replier

"If you are emailing us about your site, you will need to reupload it due a virus"

He also claims his making $500 a month, but in fact, its around $100 a month after you take away the $199 x 2 servers he has online now

I wouldnt recommend this buy to anyone unless you just want to throw your cash away

His business suffered a virus attack which was their first downtime ever. That isnt a good reason to attack their company and say that about them, PepsiCoke. C'mon, even you realize that this company can turn into something, or else you wouldn't be posting.

Also, anyone can incorporate the clients into current servers that you use. You do not need to purchase the servers, I suggested to him that if someone doesnt want the servers, he could just sell them on ebay or something.

Jim

[Edited by jimb on 04-07-2001 at 04:23 PM]

Originally posted by PepsiCoke
He also claims his making $500 a month, but in fact, its around $100 a month after you take away the $199 x 2 servers he has online now


130 clients and you are only making $100 a month? That's not a lot....

cheers,
:beer:

If I am going to post my company or servers on the net for sale, I will be sure to make aware of the fact that my servers had an outage. As i told the person who emailed me, its best to be truthful then hiding something as important as that.

I also asked him about his profits, which everyone agrees is one of the most important aspects of a sale agreement, I asked is the $500 profit or just revenue, he said profit.

I been in this business to long to know that i see the difference between profit and revenue. Look at your figures and add them all up, they will come out to about $500-$600

Now you (he) has 2 servers, each at $200 amonth, why dont you do the math

PS: I was interested sure, as any company would be, but this is the 2nd time you or your friend has posted the ad to buy, and i am not the first to bring up the fact that these $3.00 accounts are pretty high maintance, specially if the server just crashed due to a virus.

Also to add to this, now we know its acually a site that was bumped off as his, when in fact it was yours.

Sure we can take the customers and leave the servers, for 150 sites, and only $100 a month profit, thats just not enough even if you do put them on your own server.

It would be a different story if these accounts were $10 or $20 a month, but they are $3.00-$10.00 accounts


[Edited by PepsiCoke on 04-07-2001 at 10:04 PM]

You have to realize that these accounts do not require much techincal support or server resources. If you consider it, you could put upto 500 of these accounts on one server. At $3.00 per month with 500 of these accounts, that makes $1500 per month, and the servers will still only cost you $200.

We have seen throughout the industry that our plans grab more peoples attention since they are low cost. People tend to dislike paying $9.95 or more for a hosting account for a personal site. If you think of it, you could receive upto 500 clients a month if you market the site the right way. That means that you could make a killer profit off of this low-cost business. We realized this and it was one of the reasons why we started to provide our services for so low.

So you see, this industry can be very profitable.

Also, when we talked to WHN, we were just thinking of selling. We still are, and its not final. We still have to add up profits, but you can do that with the basic outline we gave you.

Looking for any offers.

Jim

I would like to discuss this with you - but via email. Please contact me at tina@affordablehost.com

I'm interested in the customers only, not the servers or any of the other things.

--Tina

Check your email affordablehost

Jim

we are interested too: info@hostvelocity.com

let's talk online (icq or aim)

Boris

Interested. E-mail me at jkehe@plusweb.com.

A good example of why most serious hosting companies won't offer a $3 a month account... In general it will attract the sort of people who flood support, and at the end of the day isn't very sustaining. No wonder he went out of business.

You pay $3 a month, expect $3 a month worth of support.

Greg Moore

Originally posted by akashik
No wonder he went out of business.


In no way did we go out of business. We have 4 staff on hand, working part-time for us, and we were over ran with requests for new accounts. We simply cannot set up 10 new accounts a day with really only 1 person working full time. Someone can easily attach this business to there business and make thousands a month.

Jim

Okay, this is starting to sound shadier and shadier the more I find out about it. I spent some time last night talking with you and quite a few of your answers don't seem to add up.

First, you said it's your friend's business, then you said it's your business, then it's your business AND a partner out of VA - even though a WHOIS on your nameservers indicate a company in Australia, of all places. You, personally, are located in Maryland.

Also, I just don't see how the amount of traffic you're getting could generating that many sales - and if it did, you most certainly should be able to handle it with the help you have. I have over 1000 customers, and I do this with one full time person and a couple of VERY part time sub-contracted people. We average about 3 - 8 new sales a day and there is NO problem with tech support or any other issue that you claim to have.

Also, you told me that most of your traffic comes from this forum or search engines. A quick look at your stats page shows that most come from one particular site...not a search engine, this forum or a hosting related site.

There was a DRAMATIC increase in traffic for March....almost no traffic up to this point. You haven't adequately explained this, in my opinion.

You're selling the RAQ 4i's at $2000 each - which is slightly below what most people in the biz can get them for anyway....and we've already heard that there's been a virus infection on at least one of these machines.

Basically, the only thing that MIGHT be of any value to anyone here is the customer base. This might actually be enough for someone to consider......except almost all of these customers paid for a year in advance IN MARCH.

I would STRONGLY caution anyone considering this offer to ASK ALOT OF QUESTIONS AND DO ALOT OF FOLLOW-UP RESEARCH!!!


--Tina

Originally posted by AffordableHost

There was a DRAMATIC increase in traffic for March....almost no traffic up to this point. You haven't adequately explained this, in my opinion.

You're selling the RAQ 4i's at $2000 each - which is slightly below what most people in the biz can get them for anyway....and we've already heard that there's been a virus infection on at least one of these machines.


First of all, the dramatic increase in traffic was due to our growing support of places like hostsearch and the individual sites. Also, we turned to promoting our business more through other places like WHT for the first time.

The virus was cleared up, it was a LION and if anyone knows anything about this virus, it affects the DNS servers. It was a pain to fix, but we did it, just like anyone else would have. The customer base is not growing because we stopped orders, and already have a list of about 30 people who would like to sign up for our services. We would really like to start to accept these clients, but would also like to them sign up with the new company that "merges" us. (would take alot less time in configuring)

Jim

I looked at your stats and I didn't see a huge number of hits from HostSearch or any other host site.

The more you talk about this, the less I believe most of what you say.

--Tina

In March 2001, we received:

Non-Links, Email Links, Others: 4426
Hostsearch: 404
WebHostingTalk: 214
Crshomeone: 294
WebHostDir: 77
ResourceIndex: 67
FindaHost: 55
Network54: 131
Yahoo: 47
WebHosters: 18
WebHostingFirms: 17
HostIndex: 15
BudgetWeb: 10
Cnet: 9

Total of: 5490 PageViews from Host Related Sites

So you see, we did have a large number of hits from Hostsearch and other host directories. Keep in mind that we never did any advertising or promotions and still received this traffic. We just added our plans to the engines and this is what we got out of it.

Jim

I just pulled this from your stats page (referring URLS) - for period April 1 - April 8, 2001. If I'm misreading these results, please let me know:

"Referring URL Total for Period

http://www.hostsearch.com/companyinfo.asp? 28
http://www.hostsearch.com/plan_info.asp? 33

Start of Query Range: Sun Apr 1st, 2001
End of Query Range: Sun Apr 8th, 2001
Number of Days in Selection: 8
Unit of Measurement: Referrals Made
The Referrers by URL report tabulates what links or URLs (Universal Request Locator) have sent visitors to the Web site, for any day, week, month or range within recorded Web Site history."


There were others that had a few single digit numbers - but nothing that I would consider a decent or marketable amount of traffic.

--Tina

Originally posted by jimb
In March 2001, we received:



We are going by the stats for March 2001. When you are in the stats area, you can click date selection, then hit previous (above the calendar) then select month range. After you have done that you can click the Refers by Domain and that will give you all the referes we had by domain name. (i.e. hostsearch). If you need us to help you out you can either post here or email us.

Jim

Yes, I understand that is March's traffic. However, that doesn't explain why it would suddenly drop off.

--Tina

LOL...The month just began on the 1st. The first week still hasnt been fully recorded, so it would appear that the stats have dropped off, but they are really keeping up. The Stats for our logs go by Weekly returns, which means that you wouldn't be seeing the total monthly, like March, until the end of April. Currenlty, if you start to compare the weeks from April and March, you can see that the traffic is keeping up. Sorry we didnt explain this to you.

Jim

Originally posted by jimb
Originally posted by akashik
No wonder he went out of business.


In no way did we go out of business. We have 4 staff on hand, working part-time for us, and we were over ran with requests for new accounts. We simply cannot set up 10 new accounts a day with really only 1 person working full time. Someone can easily attach this business to there business and make thousands a month.

Jim

If your tech person or sys admin can't handle 10 account set ups a day, you should really hire someone else -- or someone that has some idea of what they are doing. Even with full time tech support and administration, setting up 10 or 20 accounts a day, is not a big effort and can be easily fit into the schedule. If not, and it's not for any other reason, other than being constantly so extremely busy that you can't possibly even get 5 minutes to set up accounts, then you'd likely be making enough and have enough work to hire another person to help out. Most company's, when they get so suddely sucessful, will simply hire more people are they grow, not give up and sell. You can probably see how this seems a bit suspect to people, for that reason alone.

I don't buy it for an instant. Tim's right. If your admin can't set up that many accounts per day then either they are too lazy or too busy doing other things. If they are too busy doing other things unrelated to their job, and your primary business is hosting, then your priorities are wrong. If they are too busy dealing with problems diretly related to their job, then you have a poor setup or NOC to begin with. Tina is also right. The traffic patterns are bad. With the number of pageviews that you posted for March, you should have quite a bit more for April, even with incomplete first week data.

Let us know if you find a buyer, though, who is willing to do business with someone who appears to be a lot less than forthcoming with accurate details.

Originally posted by Peeps
If your admin can't set up that many accounts per day then either they are too lazy or too busy doing other things. If they are too busy doing other things unrelated to their job, and your primary business is hosting, then your priorities are wrong. If they are too busy dealing with problems diretly related to their job, then you have a poor setup or NOC to begin with.


We are a full time web design company, our designers are setting up the accounts. We never intended to get this big in the first place, so this is why we are selling. It has gotten to the point where we do not want to do the hosting part of the company anymore and want to get back to web design.

Its not that we are trying to cheat people, we are new to selling a hosting company and dont have everything organized. If you havent realized, I just gave tina the stats page too look at for herself, so why would I be trying to cheat someone. Also, we are open to any requests. We really just want this hosting division to be off our hands since we do not have the time. Our designers are becoming over worked with the design aspects and now the hosting.

What we could also do is send the person who purchases the company our clients for web design. Also, we could work for you to help promote the company.

Im sorry if I come across as misleading, but I am not trying to be. We are just new to selling a company, also a bit young at it and dont know the procedures. If you would like to research more, please do so because it will help the both of us out.

Jim

Just out of curiosity, if you have a part of your business that is growing very quickly, you would stand to make a lot of money from it. So why would you want to get rid of it?

read above.

Jim

I am not a moron. I can read very well. I just don't understand it. Business wise.

I say we let this thread die out.

Personally, I think something is not 100% on the level with this deal...but Jim, obviously, insists that everything is just misunderstandings/miscommunication.

Let's just agree to disagree and move on.

--Tina

Jim, let me give you some advice, as someone who has brokered deals: be as upfront as you can about all the details. If it is your company, say so. There is no shame in selling something. If there is a problem, say so. There is no shame in one part of your business (design) completely overtaking the other part (hosting). Give the most accurate numbers you possibly can, in the name of full disclosure. If you do so, you're much more likely to get a good response to your offer.

Thanks Peeps, Thats what I should have done from the start. The reason why I did this was so that any clients would not get scared because we are being sold. I didnt really wanna come out and say that, but it ended up this way. I can disclose of any information if you would like me too. Also, anyone who wants to see stats and would like to talk can email me at info@rnwebdesign.com

jim

Jim, I understand that temptation. I recommend against it, though, for the obvious reasons. Someone saw through it, and it casts doubt on the veracity of the offer as a whole. Your clients will have to know eventually, and what are the odds that they will frequent this forum?

I tend to shy away from offers without asking prices, since prospective buyers should have some indication of the general figures the seller has in mind, but that's just me. That isn't a popular view, I know, since people think they might get some outlandish bid for what they are offering. With full disclosure and a reasonable price range, you are more likely to get good, interested parties. Your average account price is $9.45, but the bulk of your clients are on the low end under $5. I know one host that would give you in cash, right now, $800 for the lot of the accounts, without the servers. That's about $8 a head. Not bad, for your company, making $155 in profit/month after server expenses are removed. We can continue this discussion via email, if you like (you can email me at geekerout@aol.com).

Forget It

[Edited by DaHost'nMan on 04-11-2001 at 03:09 PM]

Umm....Found this today @ Hostsearch...

Stay Away!!!!
RN Web Design & Hosting
by Anonymous 199.106.219.13 4/10/2001
Rating: 1


They advertise a 10 day trial period, but once they had my money they wouldn't return any email. The next day they disconnected their phone. Can't contact them and can't get my money back. Stay away!!!
Down...


http://www.hostsearch.com/showcomment.asp?companycode=2462

I agree to stay away.

For those customer that haven't left already, I'm sure many of them that are still with this company have a very bad taste and it will carry to whoever gets them.

Just imagine if you were a customer and got the following autoreply to the only email address they provide you:

<<If you are emailing us about your site, you will need to <<reupload it due to a virus

Would any of you dare to put this in an autoreply to your customers when this is the ONLY method they can reach you?
Please think about this. If you would even think about saying "yes", then I think you better think twice about your customer satisfaction strategy.

I think Jim has identified the main issue. This was a web design company that tried to get into a business they know nothing about and don't know how to maintain. I suspect that just because you can design web sites, it doesn't mean you know how to maintain a server and accounts, and it certainly doesn't mean you know how to provide good customer service.

Anything you ask them about, they blame on this "virus", even things that happened weeks before.

If any of you buy this company or the accounts, the best thing you can do is to make sure all the customers know that it is "under new management". I'm sure most of them will breathe a sigh of relief hoping that they might get some customer service.

Fantastic Service, Amazing Prices!
By subcultured 66.31.32.7 2/20/2001
Rating: 10


don't be fooled by these guys' low prices! wow, their service is incredible. I'm not sure how they do it, but their service is impressive. they have something like 8 different plans to choose from, ranging from about $3 to $30 per month. you really won't believe what they offer. and the best part is that they're for real - tech support has been great, i get informed responses typically within an hour (i surely didn't get that at another "budget" host), their servers are fast and they really are nice people to do business with. I recommend them highly!


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Great service, great price!
By Ian 66.31.32.7 2/15/2001
Rating: 9


well, after my bad luck with cavendo.com, i went to rn web hosting and can't say enough good things about them. their website looks shabby, but don't let that fool you. these friendly guys offer great packages at amazing prices. plus, their support is truly refreshing. I seldom have to wait longer than an hour at any time of the day to get feedback. i've had problems with many different "budget" hosts, and these guys really made me feel like there are honest web hosts still out there. the only problem i did have with RN is that the load time can be a tad slow (but i have crazy standards). Typically, downloads transferred at 10-20k. overall, they are certainly one of the best budget hosts i have run across. highly recommended.


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This was taken from the URL Pepsicoke referred to earlier. Look at the IP. Anything suspicious?

hmm is this the urgenthost.com company??? When we inquired on buying their company, they broke down how many accounts they had in each price plan and it broke down to the exact same specs as was posted in the first post....

Seems fishy to me...