Hmmm, that's a little tough for the mere fact that the chances of someone "selling" 10 or so clients is not likely, UNLESS, a hosting company is going out of business and have only like 10 or so clients.
Also it's really dependant on what type of client the client is. For instance, a client who's already paid for the year, you'd expect to pay a lot less. Where as a reseller who pays monthly would be an entirely different price. Hope you follow.
like everyone will says - it's a very subjective question.
one way to look at it is value what you're willing to spend to acquire a client - is the new customer worth $10 to you ? $100 to you ? woudl your $ be better spent advertising, or buying leads ?
we *reckon* that a new clinet on average costs us £25 to acquire. so 10 clinets would be a cost of £250, so around $400 as a straight client acquisition.
obv. the more the client is used to paying, the easier they'll fit to our existing plans etc. a client who's willing to pay $2.99/month is worth *almost* nothing compared to the cost of supporting and hosting them
if the client has paid annually for hosting, then they're a liability - you will have to provide a years service, but the previous host gets the money - so we generally deduct amounts for annual clients.
when buying companies outright we like to offer *around* a years profitability, less any liabilities (annual accounts) and adjusted based on historical churn rates etc.
once you've bought a few build up your own formulae, possibly even a s/sheet where you can just entre numbers and come out with a value - i like to calc it on paper with a pencil , but thats just showing my age
Originally posted by othellotech when buying companies outright we like to offer *around* a years profitability, less any liabilities (annual accounts) and adjusted based on historical churn rates etc...
Excellent answer. I hope all buyers and sellers read this so the expectations are balanced.
May I ask you how you derived the $25 cost of acquiring a customer?