I don't know if i'm in the correct forum to ask this but here we go. I started a shoutcast hosting company 4 months ago. As of now, I make $1000 a month after paying another $1000 in expenses every month. If I decided to sell today. How much can I ask? My company has around 25 new signup every month and aroung 2 to 3 cancellation a month.
Do you keep books? If so, you should probably sell it for around your net worth.
My advice, though, is to stay in it longer than four months unless you have to get out for personal reasons. Hosting is definitely not a get-rich-quick industry and if you put your effort into it for a few more years you may see a much better return on your investment.
Thank you. And yes i keep books. I need a better way to convince my wife that all the time that I'm spending on this will be worth in the long run. I'm doing this by myself. Any suggestion will be appreciated.
Is the following extrapolation from your post correct?
1. 25 new adds/month * 4 months = 100 current customers on the system
2. $1,000/mo in profit + $1,000/mo in expenses = $2,000/mo in revenues and $24,000 in annualized recurring revenue.
3. Avg revenue per current customer of $20/month
4. Monthly revenue growth 25/cust * $20/mo = $500/mo
5. Annual revenue growth $6,000.
Based on the above, I might start out asking a little more than 1.0x your annualized revenue of $24k but I would expect to end up somewhere in the $20k-$24k range. Another option since you seem to be adding revenue (and thus value), might be to see if you can automate your business to reduce your workload. If this enables you to hang on longer you might end up making more.