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  1. #1
    Join Date
    Aug 2002
    Atlanta, GA

    How to sell your hosting company.

    If you are a host trying to sell your company I would suggest you do the following in your posts. Just a suggestion, but I think it will stop many of the information only requests that will allow a buyer to make a clear decision on pursuing any purchase.

    1. Define what you are selling. Is it a web site, clients, support software etc. Or is it just part of the company such as clients only or domain only.
    Hi, I’m selling my hosting company it includes the domain name, 55 clients, leased modernbill and perldesk. I rent servers from host X. You may take over my lease at $X per month or you may move to your own servers. We started our hosting company in 2003.

    2. Provide a break down of the plans you offer. The number of clients in that plan, plan price, bandwidth, disk space for that plan.
    I have 55 clients
    23 on Reseller Plan A at $15.00 per month – 2 Gb disk and 5 Gb bandwidth
    8 on Reseller Plan B at $25.00 per month - 3 Gb disk and 6 Gb bandwidth
    12 on Reseller Plan C at $30.00 per month – 4 Gb disk and 8 Gb bandwidth
    12 on Virtual Plan A at $6.00 per month – 500 Mb and 2 Gb per month

    3. Break down client income by monthly, quarterly, semiannual, annual. Include how much revenue each of the clients groups generate.
    51 Monthly $765.00
    3 Quarterly $30.00
    2 Annually $60.00
    Total Yearly Income: $9,660.00

    4. Servers and control panel types. Also total disk space and bandwidth used.
    We are using 2 Cpanel servers with 2.4 Ghz P4, 1 Gb RAM, one 80 Gb HD and 1000 Gb of bandwidth per month.
    Total used disk space 110 Gb and total used bandwidth 1,200 Gb per month.

    5. What do you offer your clients?
    We offer our client’s 24/7 support desk, telephone support from 9-5 M-F, servers also have fantastico. We have a client forum with a VB that is included.

    I'm sure others can suggest some other things that would help.
    Atlanta, GA and Las Vegas, NV. Colocation

  2. #2
    Excellent advice.

  3. #3
    Join Date
    Apr 2003
    I would like to add that people interested in selling should learn about and accept Escrow as a form of payment.

    Escrow protects both the buyer and the seller during the sale. I've made a number of offers to purchase and eventually turned down the purchase because the user wouldn't accept escrow. I'm not about to send hundreds or thousands of dollars to someone I don't know to a country I don't even live in, you shouldn't either. is a premium plugin to make a directory using WordPress racing, mods, sales, and general discussion of pocket bikes

  4. #4
    Baal, could you recommend any escrow service in particular?

  5. #5
    Join Date
    Oct 2003
    Originally posted by Hey It's Me
    Excellent advice.
    indeed, but hope we will not need it
    RofyHost - Affordable Shared & Reseller Hosting Since 2003
    Proud Moroccan

  6. #6
    Join Date
    May 2004

    Exclamation GREAT advice


    Great advice I would also add,

    Please, please, please be realistic about your asking price. We have been involved in 10s of acquisitions over the past years, and I can not begin to tell you how many people are unrealistic and don’t do any research prior to listing there business.

    MRC (monthly recurring charges) = $50,000 (or early income of $600K) and this company was asking for $12 Million. This is a real example that we were faced with 3 weeks ago. Basically this person was asking for 20 years worth of revenues.

    You (the sellers) have to know that there is a certain metrix to selling a host, and that’s now (not 1998-2001 during the host hot times)

    For the most part it is realistic but then again sometimes these numbers can differ.

    1 Multiple = MRC X 12 months
    MRC $1,000 - $10,000 Multiple Average .35 - .65 Possibly higher depending on clients, hardware and terms
    MRC $10,000 – $99,000 Multiple Average .5 - .85 Possibly higher depending on clients, hardware and terms
    MRC $99,000 - $250,000 Multiple Average .6 - .99 Possibly over 1 depending on clients
    MRC $250,000 - $1 Million Multiple Average .85 and up
    Mike Gold
    [email protected]

  7. #7
    Join Date
    Jul 2003
    This is an excellent and realistic price range, and I wish more people selling their business would consider it seriously if they expect a quick and successful sale.

    We have involved in quite a few transactions, and almost all of the successfull ones are completed within the above range. Certainly if the business is worth more, then the seller should be prepared to put up a convincing argument why that is so. And back that up with evidences and/or an iron-clad future revenue guarantee.

    Personally, I would be wary of third-party appraisal services or brokers that give out very high valuations. After all is said and done, I would ask them just one question: "Can you guarantee finding a buyer at that price within 30 days (or even 60 days)?". If the answer is no, then I would dismiss the appraisal as nonsense. No comment on their business ethics.
    .: Signature not required nor available at present time :.

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