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Thread: Estimate worth of a company
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03-21-2012, 07:40 AM #1Junior Guru Wannabe
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Estimate worth of a company
Hi,
I just want an estimate worth of a 4 year company.
So, let's start with details:
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98% of customers are Greeks
Top Serps in local google(google.gr)
900 active customers
medium xx.xxx€ annual income
6 servers(cpanel,softaculous,sitebuilder)
WHMCS powered
Top xx number of orders monthly.
Let me know your thoughts!
Regards
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03-21-2012, 10:39 AM #2Junior Guru
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Not really enough information here to give you a number. However as a general rule I have found 75% of annual sales to be a good place to start. Of course there are all kinds of variables that could make it be more or less than 75%.
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03-23-2012, 09:21 PM #3Junior Guru
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+1 to the above assessment. Usually the value of your hosting company is directly associated with it's annual revenue. Acceptable initial values are 70-90% of annual revenue - regardless of costs.
Hope it helps.
-Jordan
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03-24-2012, 12:07 AM #4Web Hosting Master
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It's worth what someone will pay you for it, less your costs involved in selling it :p
At present I'm seeing small hosts (sub 1000 clients) go for 5 to 8 month T/over and on larger hosts about 2years profit + assetsRob Golding Astutium Ltd - UK based ICANN Accredited Domain Registrar - proud to accept BitCoins
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03-24-2012, 10:14 AM #5
I think the brand HostXNow is worth millions... I doubt anyone would pay that much for it though.
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04-04-2012, 07:52 PM #6Web Hosting Evangelist
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04-04-2012, 09:55 PM #7Web Hosting Master
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It really depends on what you're selling. I agree, that a lot is tied into annual sales, but if you have a strong balance sheet and a company is buying all of the assets (servers, firewalls, etc...) the price has a lot more factors.
On a side note, the business maybe worth more to someone in that region/market where 98% of your customers are versus someone in the Americas. All in all, there isn't enough validity behind your assessment to make a general consensus for a price.Doug
Finance, Operations, and Business Executive
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04-09-2012, 12:03 PM #8Disabled
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It is worth three times medium xx.xxx€ annual income
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04-09-2012, 12:10 PM #9HostXNow - Shared Web Hosting | Semi Dedicated Hosting | Enterprise Reseller Hosting | VPS Hosting
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04-09-2012, 12:16 PM #10Disabled
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All web hosting companies are worth millions look at gatorhost.com they now have 8,000,000 domain they started with one
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04-09-2012, 12:21 PM #11Web Hosting Master
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Really? So just because Google is worth billions of dollars, if I started a search engine, or replicated any of their products, my company would be worth billions too?
Very few hosting companies are worth millions... There are probably thousands, if not tens of thousands of web hosting companies. If that was the case, hosting would be the largest industry in the world.Doug
Finance, Operations, and Business Executive
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04-09-2012, 12:43 PM #12Web Hosting Master
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What about the obvious?
Incone is one thing, what about cost to run, infastructure and so on. Buying any business of relevant size simply can't be based on turnover.
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04-09-2012, 12:50 PM #13Web Hosting Master
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04-09-2012, 12:55 PM #14HostXNow - Shared Web Hosting | Semi Dedicated Hosting | Enterprise Reseller Hosting | VPS Hosting
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04-09-2012, 12:59 PM #15Web Hosting Master
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Yes I appreciate all that my point is people are guessing, equally the customers may well be with that owner because they have such a great relationship, along you come and out a fair majority of them will go. Due Dilligence, thats my point. Couple of big hosts were sold in recent years and many customers jumped ship just because that 1 person was not going to be there.
I turn over about £58,000 a month, I am happy to take offers based on you guessing and not looking at anything else...
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04-09-2012, 02:03 PM #16HostXNow - Shared Web Hosting | Semi Dedicated Hosting | Enterprise Reseller Hosting | VPS Hosting
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04-09-2012, 02:27 PM #17Web Hosting Master
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Bear in mind though that providing hosting services makes up less than £25k a year of what I do
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04-09-2012, 02:33 PM #18
We get the point.
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04-09-2012, 08:18 PM #19Web Hosting Master
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what's the profit?
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05-02-2012, 07:35 AM #20Newbie
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I think net profit is much more important than turnover or sales. A company could be making 100 000 usd turnover and no profit or 50 000 profit
When i was reselling hosting my net profit was more than 50% of turnover
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05-02-2012, 09:24 AM #21Web Hosting Master
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First off, what do you mean by annual income? So many people on these forums refer to revenue as income.
If you mean net income, then I would say 1-2x that plus fair value of assets depending on the brand recognition and reputation.
If your brand is well known and you have a flawless reputation, you could do 2x without issue.
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05-02-2012, 09:34 AM #22Web Hosting Master
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Finally, someone who doesn't read the WHMCS scripts and uses the word Income as Revenue !
In general this maybe the case. However, think of it like this. What if someone didn't get discounted pricing on leasing servers, or had lousy colo pricing and had INEFFICIENT expenses. The moral of the story is, you need to read the whole story. Is the company growing, are they profitable, what are the retention rates, how long have they been in business, brand reputation and recognition, competitors, is there an opportunity for me to make this business more efficient, more effective, and more profitable. Does this company fit into my current business model, do I have room on my infrastructure/network to take on this additional capacity and reduce operational expenses.
These are some of the key items I discuss with my clients when going through mergers or looking to buyout a company.Last edited by Techy; 05-02-2012 at 09:38 AM.
Doug
Finance, Operations, and Business Executive
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05-02-2012, 09:47 AM #23Web Hosting Master
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Rob Golding Astutium Ltd - UK based ICANN Accredited Domain Registrar - proud to accept BitCoins
Buying Web Hosts and Domain Registrars Today @ hostacquisitions.co.uk
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05-02-2012, 09:51 AM #24Web Hosting Master
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