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  1. #1
    Join Date
    Jun 2002
    Silicon Valley, CA, USA

    Question 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?

  2. #2
    Join Date
    Nov 2001
    Depends on if the business is making money.

  3. #3
    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.

    Good luck with it.

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