I may be selling my company and would like some information on what to take into consideration when finding the right asking price.
I have over 1000 clients. (paid annyally and monthly)
Leasing 6 servers from EV1 (5 shared - 1 dedicated for the hosting company)
Fully owned ModernBill license
250+ domains registered via enom reseller account (through MB)
May I ask why you are selling? When will renewals be? How much are the operating costs versus revenues. How many employees do you have and how many of those are part time, full time and or offsite or onsite? What merchant processor do you have.
I don't think he is ready to sell, just trying to figure out what to consider when he DOES sell.
Things to consider about your potential buyer would include:
- their own company's history (how long have they been in business)
- their own customers' satisfaction with them, their expertise,
- how will they be paying for your company (I'd recommend escrow for all parties involved)
- how easy it will be to transfer everything over to them (EV1, I believe, requires some paperwork to transfer a server over to a new owner)
- how well do they communicate with you throughout the process
You'll want to provide as much information upfront as you possibly can, which would include what viabandwidth and contractdata have asked about. Because of the apparant size of your company, you'll probably want to secure an non-disclosure agreement (NDA) from potential buyers so you aren't wasting your time.
You'll want to breakdown how much your monthly and annual expenses are, and how much income you are bringing in from your monthly and annual customers. Don't forget to include domain registrations and extra services that you may offer your customers.
You'll also want to account for any custom work you've had done for your company (such as custom Web design, external subscriptions, etc.)
After putting together all of these figures, you should be able to determine how much your company is worth and from that determine what monetary value you would be comfortable with to let go of your business. Usually, asking prices are anywhere from 10-12 months profits to even 18 months.
Hope that helps! Good luck with your possible sale.
Last edited by alphabet soup; 05-13-2005 at 12:14 PM.
Yeah I did. I'm kind of ignoring most of the PMs as I said - not ready to sell.
Although one company has made a "more than I expected offer" and is currently the only company I'm truely interested in hearing from at this time.
The desicion is not final - and when we have more information, I will likely reply to most of the higher end offers I've received to see if anyone can exceed the current offer.
I guess what that means is - if you're interested, start throwing some numbers my way to ensure you hear back from me.
And anyone able to outright purchase the company is encouraged. While the monthly payment method works best for the buyer - I'm all for just closing the sale and being done with it. Provided the one time payment is comparible to the offer I'm looking over now
Last edited by Devil Inside; 05-13-2005 at 09:58 PM.
We have decided to sell. We are still accepting offers under these terms and these terms ONLY!
Before any company information is released, an nondisclosure agreement is required to be signed and faxed to us.
We are NOT accepting any monthly payment options. With the exception of one we are still investigating.
With regard to that one monthly offer, if the company is continuued "as is" our actual selling price after the monthly payment term is ended would fall in the $40k+ range.
However, we'd prefer to simply sell at a one time payment (lump sum). If you can not offer us a purchase price in the area of $40k, please do not offer.
With a payment plan - there are too many unknown variables which could adversely affect the actual selling price. Though with a lump sum payment, we know that our company and clients will be well taken care of as the buying company will not take chances in losing such an investement.
Obviously we want the most money for our company possible, so we will be reveiwing all offers made, and providing those figures to all companies that have made an offer. This will allow all interested parties an oppourtunity to counter-offer should they feel the need.
The future of the company and the clients of the company are extremely important to us. We prefer the purchasing company to maintain our company as it's own entity or subsidary of their parent company. Having built a highly reputable company - a simple "buy-out & merge" tactic would be unfavorable for the purchasing company.
Our company is growing and will continue to grow!
Lastly, we have a plan in the works to help maintain a high client retention rate after the sale and we are out of the picture. We are doing everything possible to ensure that the buyer receives a business that will return their investment and more!