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  1. #1
    Join Date
    Mar 2007
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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:
    ---
    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

  2. #2
    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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  3. #3
    Join Date
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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

  4. #4
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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 + assets
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  5. #5
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    I think the brand HostXNow is worth millions... I doubt anyone would pay that much for it though.
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  6. #6
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    Quote Originally Posted by HostXNow View Post
    I think the brand HostXNow is worth millions... I doubt anyone would pay that much for it though.
    Then your thought is wrong. I can say my shoe is worth a million but doubt anyone will pay much for it....think of something sensible.
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  7. #7
    Join Date
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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.
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  8. #8
    It is worth three times medium xx.xxx€ annual income

  9. #9
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    Quote Originally Posted by tamouh View Post
    Then your thought is wrong. I can say my shoe is worth a million but doubt anyone will pay much for it....think of something sensible.
    So I'm wrong just because you disagree? You might not think its worth millions but someone else might think it is.

    Lol at the shoe example.
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  10. #10
    All web hosting companies are worth millions look at gatorhost.com they now have 8,000,000 domain they started with one

  11. #11
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    Quote Originally Posted by markgrannum18 View Post
    All web hosting companies are worth millions look at gatorhost.com they now have 8,000,000 domain they started with one
    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.
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  12. #12
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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.

  13. #13
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    Quote Originally Posted by wisenerl View Post
    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.
    Earnings and potential if you're a smart buyer.
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  14. #14
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    Quote Originally Posted by Techy View Post
    Earnings and potential if you're a smart buyer.
    So true. The current owner could be making just 15k net profit a year due to lack of resources, etc. Run by someone with better resources/knowledge could double or even triple that.
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  15. #15
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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...

  16. #16
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    Quote Originally Posted by wisenerl View Post
    I turn over about £58,000 a month, I am happy to take offers based on you guessing and not looking at anything else...
    Your net profit is probably 8-18k month
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  17. #17
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    Bear in mind though that providing hosting services makes up less than £25k a year of what I do

  18. #18
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    We get the point.
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  19. #19
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    what's the profit?
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  20. #20
    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

  21. #21
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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.

  22. #22
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    Quote Originally Posted by devonblzx View Post
    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.
    Finally, someone who doesn't read the WHMCS scripts and uses the word Income as Revenue !


    Quote Originally Posted by winuser View Post
    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
    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.
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  23. #23
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    Quote Originally Posted by winuser View Post
    I think net profit is much more important than turnover
    This is t'interwebby, we dont use real-numbers or acceptable accounting methods to determine value, e use last week's lottery numbers multiplied by a random phone number
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  24. #24
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    Quote Originally Posted by othellotech View Post
    This is t'interwebby, we dont use real-numbers or acceptable accounting methods to determine value, e use last week's lottery numbers multiplied by a random phone number
    Which lottery? That'd be quite a number
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