Hello all. This is actually my first post here, but i have been looking around, and wish I would have found this resource earlier. I have had my own web development/hosting business for the past 13 years. Mostly small-mid size local business here in Canada
I have no interest in building a big business, or hiring full-time staff. My goal has always just been to make enough to live and not have to work for 'the man'.
Recently, things have been getting a bit out of control, in that previous clients are asking for bigger and bigger projects, and referring new business to me. This is all well and good, but its taking things in a direction I don't want to go. As things grow, more and more of my time is spent on hosting setup & tech support, etc. which ultimately can be a headache for me and takes me away from the bread and butter design stuff.
Ideally, I would like to sell the hosting portion of my business and retain the design portion. But I would consider getting rid of everything if I found a good offer.
ANYWAY, I Digress...
My question is... Has anyone here successfully gone through the acquisition process from the sellers viewpoint? Can you offer any tips or recommendations? What about the pros and cons of splitting the hosting from the design parts of the business?
Obviously I want to make this as easy as possible on my clients whom I have spent years building relationships with, and I don't want to risk getting poached either.
Very interesting topic. We have acquired a few hosting businesses throughout the years and here's some pointers:
1) Does the handover to the new host require changes in the customers setup? Even small changes, such as changing the incoming mail server address can cause fuzz and trouble. Try redirecting to new addresses where possible while informing the customers of the new server addresses.
2) Is there a dramatic change in pricing? This can be a dealbreaker for many existing customers.
3) How available you will be in assisting your soon to be old web hosting customers? If they have been dealing with you in the past, they are likely to contact you in the future. If you can be there and direct them to contact the right support/billing/sales people amongst their new host, that will make it an easier experience for your customers.
4) If you keep the design portion of your business, consider entering some form of partnership with the host who acquires your customers.
5) Take your time. Plan everything well, inform everyone in time and be available to answer any questions. Avoid custom solutions or special deals that only you and your customer know about. These are likely to raise questions with the new host.
6) Ensure that the new host can provide billing in a way your customers prefer it. Not everyone are willing to accept cheques or mail invoices.
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Have you thought about maybe taking on a partner to handle the web hosting aspect of your business? Web hosting and Web Design pretty much go hand in hand, so it might not be the best move for you to liquidate your web hosting client base (as that might also take away some of your design income). Just my two cents.
As things grow, more and more of my time is spent on hosting setup & tech support, etc. which ultimately can be a headache for me and takes me away from the bread and butter design stuff.
Do you use billing script and helpdesk for your hosting business?
They will help to streamline operation of providing hosting & support to your customers.
If profit from hosting is good, you can hire some server management company to take care of hosting support tickets.
I think you want to be more focussed on Designing when compared to Hosting. Better you make partnership with one of the good hosting provider available in your location and mutually. I wish you all the best.
Thanks guys, these are great suggestions. Considering a partner MAY be an option. Its scary to add a new dimension/personality to the business, but may work, it might be better than risking losing clients.
How many hosting clients are you currently providing services for?
I have about 80 clients, most pay $20/month, about 1/3 pay $10/month, as they are marking the fees up for their clients. (local computer companies) and a few of that 1/3 are non-profits, so I give them a discount.
I'll check out the for sale section. Thanks for that.
Anyone had any experience selling though? I'm a bit nervous of getting burned/ having my clients poached.
I think there will be a lot a variables and your going to be dealing with a good chunk of change. Your going to want use an escrow company such as escrow.com and make sure its a smooth painless transition for your clients, else hey are going to bail in mass anyway which will do neither you nor the buyer any good.
If you are a reseller perhaps you can work with the company you resell for to find a buyer within your current company and your clients would not have to change severs, IP's and such.