$17,000 pushed through 2checkout
$115,000 (minus some chargebacks) in Modernbill
Modernbill active customers – 464 (450 realistic, some may not be active anymore)
Last 6 months of billing invoices:
March: $4,848.24
February: $4,543.30
January: $3,960.66
December: $3,735.31
November: $3,825.63
April: $4,589.37
Total due: $6,509.16
Hosting company #2
Modernbill – 162 customers
April: $1,537.73
March: $2,884.26
February: $3,378.83
January: $849.51
December: $952.65
November: $1,650.24
Total due: $6,183.90
I’ve owned the original hosting company since it started in early January of 2003. I was very stingy with my plans and it was very difficult to market this hosting company because no one saw the plans in hosting directories because who would search for 1 GB of bandwidth or 100 MB of space for $4.95/mo. Because of this though, the server tend to not get filled up as much. As a result, we have 969 accounts on this server and right now it’s 91.7% idle with a load of .32. Sure it spikes when heavy MySQL or Exim are used, but all in all it can handle a lot more accounts. Most of the clients have simple html pages and use up no resources at all. There are, of course, a few that do not. Also, not all 969 accounts are from clients, some clients have more than one site and we have a few resellers, but around 200 of the accounts are my own sites or sites of my friends that I host for free. I’ll move these to another server before or during the sale. I’ve stopped marketing this company and it grows only via word of mouth right now. It grows about 50-75 customers per year after cancellations. One other important factor to note here is that the vast majority of the customers are paying monthly. You will be hosting very few accounts that have paid for a year already.
As for the second hosting company, I bought it last December on Ebay. I believe it’s about 1.5 years old. The server was held together with duct tape and the old owner lied to me on many occasions. It was my first and only hosting company purchase, and overall it went pretty well. The biggest problem was I decided right away to get a merchant account for it. Past complaints and promised credits to customers caught up to us and before we knew it we had a 2% chargeback rate. Rather than call us and ask us for a refund, customers simply charged back. Our merchant account told us there was no point in disputing or even trying to work with the customers on these chargebacks since it was unlikely we’d end up with too many of them. Well, we ended up with too many. I lost the merchant accounts for both hosting companies this way and haven’t been billing either of them for over a month. As part of this sale, the new owner will get all chargeback notices (so as to know which hosting customers never to bill again) and the ability to back-charge all customers that are getting free hosting right now for both hosting companies. As mentioned above, that’s over $12,500. Realistically $10,000 of it should be paid. If you have experience with Modernbill, you know the numbers never seem to fully catch up to each other with owed and paid. As for this second hosting company, many of the customers are paying bi-annually or annually. You will need to host many of them for a while before they pay you again.
The reason I’m selling is I’m tired of owning hosting companies. For the most part I have one guy that runs these 2 companies for me. He handles the phone support, email support, and administration. He does a pretty good job of this, however many customers still call, email, or IM me directly though. I’m more of a webmaster and a marketer than an admin/support guy and I don’t like handling support at all. I figured by now, after more than 3 years in business, the hosting business would be more lucrative for me, but it just isn’t. After credit card fees, server fees, and paying this guy to run the business for me, it doesn’t make me a whole lot. In the right hands, these 2 companies would make someone else a lot more money if they had offshore support, or in-house level 1, 2, and 3 support, admins, etc. Having one person run all of the above isn’t efficient or cost effective. This doesn’t mean I’m desperate to sell, but it does mean I’m willing to part with my baby (and the newer bought hosting company) for a good price. I’ve got a merchant account app sitting here on my desk and I’m debating on whether it’s worth the effort to fill out and get these companies billing again. I’d rather sell though, so contact me with your questions. You will need to sign an NDA in order to learn the domains.
Also, I'd consider splitting these up for the sale but would prefer to sell them together.
AIM: leifer2
ICQ: 293789555
Email: leif@karmamedia.com