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  1. #1
    Join Date
    Feb 2005
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    suggestions needed

    Not sure this is the correct forum to post this but I really couldn't find one that
    fit the post correctly, Mod, please move this to where it belongs if I made a mistake please.

    I need to know the feasibility and suggestions on how to go about selling an internet business. I'm thinking some of you may have done this. I have a very profitable game server business with no debts and about $70K (current street value) in servers. My ebit is about 6000 a month currently so I cant really sell it the conventional way I see these things being sold (i.e. customers only or 1 or 2 boxes and customers there are 45 dual cpu boxes all collocated in dcs around the country.)

    Anyone have any suggestions as to where/how to market the business for sale?

    Thanks
    afgservers

  2. #2
    Join Date
    Mar 2003
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    1,584
    http://www.webhostingtalk.com/forumdisplay.php?f=97

    is a place to start.

    EBIT is not worth much and a small revenue base will make it hard for a broker to market you. Sorry for the bad news........
    Last edited by music; 11-15-2006 at 11:11 PM.

  3. #3
    Join Date
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    Quote Originally Posted by afgservers
    (i.e. customers only or 1 or 2 boxes and customers there are 45 dual cpu boxes all collocated in dcs around the country.)
    I have no idea what your trying to say here.

  4. #4
    Join Date
    Feb 2005
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    .

    Really i thought 6K a month profit was decient but I supose everything is relative.

    I meant when i said that, its not a small 2 or 3 box business its a larger business with hundreds of customers servers I dont think i could do what I normally see people doing and thats selling the customers off or a small 2 or 3 server business assets and customers. Its larger than that. Not huge but larger than someone saying ok ill write you a check for 8K or something.

  5. #5
    Join Date
    Jun 2001
    Location
    Denver, CO
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    3,301
    What's your monthly revenues?
    Jay Sudowski // Handy Networks LLC // Co-Founder & CTO
    AS30475 - Level(3), HE, Telia, XO and Cogent. Noction optimized network.
    Offering Dedicated Server and Colocation Hosting from our SSAE 16 SOC 2, Type 2 Certified Data Center.
    Current specials here. Check them out.

  6. #6
    Join Date
    Feb 2005
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    it varies month to month but it would safely average around 10K my costs are about 4K a month.
    Im ballparking for the sake of this post just to give the idea of what i needed/was looking for.

  7. #7
    Join Date
    Mar 2003
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    EBIT of $6,000 a month and profit of $6,000 a month are very different.

    Definition of EBIT

    Earnings Before Interest and Taxes. A measure of a company's earning power from ongoing operations, equal to earnings before deduction of interest payments and income taxes. EBIT excludes income and expenditure from unusual, non-recurring or discontinued activities. In the case of a company with minimal depreciation and amortization activities, EBIT is watched closely by creditors, since it represents the amount of cash that such a company will be able to use to pay off creditors. also called operating profit.


    Definition of Profit

    The positive gain from an investment or business operation after subtracting for all expenses. opposite of loss.

  8. #8
    Join Date
    Feb 2005
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    Im sorry i used the term incorrectly. Lets do it this way:

    earn 10K
    costs 4K
    _________
    6K profit

    Sorry if i confused anyone with my misuse of the term.

  9. #9
    Join Date
    Oct 2004
    Location
    Nevada
    Posts
    887
    You might want to contact a broker such as Tom Millitzer tom @ com-broker.com
    The focus will likely be on the gross revenues and the contribution to margin; rather then the capital spent on the hardware.

    Suggest that you get non-disclosure agreements (NDAs) from anyone expressing interest in your business.

    Document everything -- colo contracts, server support contracts, customer contracts, how to maintain the servers, how to market for more customers, potential pitfalls, etc. Disclose everything

    Get your financial statements perfectly straight and clear before you engage anyone -- if you can, have your bookkeeper proivde audited financial reports.

    Perhaps the most difficult is to keep all emotion out of it. It doesnt matter if you have worked your butt off for the last two years, that you have toiled and troubled over it 18 hours per day. Think of it as a piece of paper that you are selling, a pure and simple financial transaction.
    Last edited by Dennis Nugent; 11-16-2006 at 01:04 AM.

  10. #10
    Join Date
    Nov 2005
    Location
    Michigan, USA
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    Well I don't think you have too much to worry about, put your ad up in the other related offers forum and see what comes of it.

    Maybe see what GriffinRun did, they just recently sold their business (which is probably near the same size or bigger) which was in debt so I don't think you'll have too much to worry about if your business is doing well.

  11. #11
    Join Date
    Feb 2005
    Posts
    46
    griffin run sold on ebay for 18K but had 26K in debt. Only 130ish servers running and no profit if i remember correctly. I saw that, but this isnt really the same thing. But it got me thinking.

    I suppose it cant hurt to put an add in you are correct.

    Thanks for the input dennis, thats a good idea as well. I was thinking my business is too small for a broker to care about but too large for an add in the forums. A limboish area im in methinks.

  12. #12
    Join Date
    Nov 2002
    Posts
    2,780
    Well, your cost is only the pure operating cost. you said you have about 70K of servers, so what you need to do is figure out the amortization of that equipment and put it into the monthly expense. You shouldn't be considering the 70K of equipment as a one time thing.

    But as a note, if there is no debt and 70K (street value) for the equipment, then your minimal price should be set at 70K because that will be the value if you jsut liquidate all the equipment.

  13. #13
    Join Date
    Feb 2005
    Posts
    46
    I figured the value of the servers as part of the expense of buying the business.

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