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  1. #1

    If i decide to sell. How much can i ask?

    Hello,

    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.

  2. #2
    Join Date
    Jun 2005
    Location
    Columbus, Ohio
    Posts
    171
    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.

  3. #3
    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.

  4. #4
    Join Date
    Jul 2006
    Location
    Detroit, MI
    Posts
    1,955
    8-14 months net revenue, though it really depends on a lot of factors...



    Regards,

  5. #5
    Join Date
    Feb 2002
    Location
    New York, NY
    Posts
    4,612
    Quote Originally Posted by newbayhost View Post
    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.
    Tell her that you're spending most of the time sneaking around with another woman, and so the small amount of time that you're actually spending on the company is actually worth it.
    Scott Burns, President
    BQ Internet Corporation
    Remote Rsync and FTP backup solutions
    *** http://www.bqbackup.com/ ***

  6. #6
    Join Date
    Feb 2002
    Location
    Australia
    Posts
    24,009
    If you have $24k/yr in revenue, then you could start with that as the asking price, all things being equal.
    AussieHost.com Aussie Bob, host since 2001
    Host Multiple Domains on Fast Australian Servers!!

  7. #7
    Quote Originally Posted by Aussie Bob View Post
    If you have $24k/yr in revenue, then you could start with that as the asking price, all things being equal.
    Personally for a 4 month old company I would want to know everything about the customers and the company before paying that.

    But as bob says if everything is "ok" then thats probably about what you would get.
    Data Republic - UK Managed Servers - Server Management - Managed Backup/R1Soft
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  8. #8
    Join Date
    Feb 2002
    Location
    Australia
    Posts
    24,009
    Quote Originally Posted by FHH - Tim View Post
    Personally for a 4 month old company I would want to know everything about the customers and the company before paying that.

    But as bob says if everything is "ok" then thats probably about what you would get.
    Yeah, my "all things being equal" means if it all checks out ok, under the microscrope.
    AussieHost.com Aussie Bob, host since 2001
    Host Multiple Domains on Fast Australian Servers!!

  9. #9
    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.
    Frank Stiff
    Cheval Capital, Inc.
    www.chevalcap.com

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