What's the right price for a Shared Hosting Business
Just a hypothetical question:
How would you price the Business for Sale if you are selling your shared hosting business? Let's say the business has been established over 3 years and stable customers with marginal growth every year. What would be the right price, just for the accounts, no equipment included? 1 Year's revenue? 2 year's net cash flow? Just curious. I would like to hear from someone who has recently purchased or sold their shared hosting business.
Also how would you set the payment arrangment? 50% upfront, balance due over 1 year? How about any clauses of price reduction, if the customers starts dropping out?
On shared accounts, paying monthly, and paying at least say $10 per account on average you could probably get 6 - 8x monthly billing for less than 400 accounts, and you might could get 12x for up to 1,000 accounts or more.
Working from that simple rule - start giving yourself or taking away "points" for things like - annual billing, personal vs business accounts, whether or not you run a clean system that is easy to port, contracts any customers have, etc.
Obviously what payment terms you settle for can decide the over all price as well.