Hosting company with 300 sites, affilate program

[tibberous]

About how much should a hosting company with 400 websites ($400/yr average), an affiliate program (20k / month), and a bunch of custom software sell for?

We are dealing with a business broker, but I wanted to get some opinions from you website guys. It's all residual income, so I'm wondering if we're not selling ourselves short basing it on the EBITA.

[Lykos]

Hmmm ... am not sure i understood you.

U wanna sell hosting company or aff program with websites?

And $400/yr average and 20k/ month, what's that for ? Costs or profit?

[HomerSimpson]

depends on how much profit does it make?

[Aquarius]

None, The Hun only gets revenue for the.... fuck, don't remember the rest lol

[The Ghost]

Whats for sale?

[shake]

So the hosting company, which has 400 direct clients at $400 / year = $160,000, also $240,000 a year in sales that have come through affiliates. Total revenue: $400k

How much do the affiliates make? What are the running costs of the company? If these numbers aren't too bad, you'll probably be looking at 500k-1 million range?

But without knowing profit it doesn't mean much.

[uniquemkt]

Used to be that the same price would be equivalent to roughly 1.5 years profit.

[Barefootsies]

Originally Posted by shake

But without knowing profit it doesn't mean much.

Correct. Most of it is emotion and semantics.

In the end it comes down to the total monthly profit being made, minus all expenses, licensing, leasing, or other contractual commitments (should they exist). That is just the surface however. There are the other intangibles, like how long you've been in business, average churn, type of clients, and so on.

Until you get down to some hard numbers and facts, you are just pissing in the wind.

[chaze]

Originally Posted by uniquemkt

Used to be that the same price would be equivalent to roughly 1.5 years profit.

We get offers for three years times our annual profit. But we are not selling.

The domain is a big factor too, if it's hosting.com selling then that would an extra 100k+ just for the domain.

But to answer the main question, three years times the hosting companies total profit.

Hardware and software is a wash.

Let me know when you get an offer, we might be able to counter offer it.

[cgiGeek]

you need to post some margins if you want an answer

[raymor]

BTW when calculating profit for 1.5 X profit, don't forget to include the salary of an employee owner as an expense. If I make $100,000 per year but I work 55 hours per week for it, that's not profit, that's a job.

If the owner is lead tech and manager, figure what profit would be after contracting us to do administration at
$150,000 / year.

[tibberous]

Wow, gave up on getting replies - came back today to a ton of them.

Basically, there is an affiliate program (not adult), and 400 websites paying about $400/year between hosting and domains.

The affiliate program is used almost exclusively by the sites we host, but almost none of them get commission off it. (profit this month was like $14k)

Costs of running the company are pretty minimal - there is a program who is part owner, and a secretary. A lot of the money is pulled out as owners salaries, but if the company was purchased, all it would need is a secretary and a full/part time programmer, and possibly a sales person depending on whether you were trying to grow the company or just collect the residuals. Company has offices, few assets, ect. but those could all be gotten rid of.

Your basically bringing in 320k / year, and would need 2 employees to run everything. If you wanted to have a sales force, a designer, ect. and actually try and grow the company - that would be an option too, as you'd basically be selling cookie-cutter websites out of an already-made CMS system.

[youdeserve]

In the Shark Tank you would be having a 100000$ for 75% offer on the table for these numbers.

[tibberous]

Originally Posted by youdeserve

In the Shark Tank you would be having a 100000$ for 75% offer on the table for these numbers.

2 months revenue eh?

Personally, I don't think the company needs sold, so much as it's liabilities gone. Sometimes it doesn't make sense to grow a company - sometimes it makes sense to get rid of expensives and collect checks.

[ShoeBox]

I would hold onto it for a Year and then decide..

[Just Alex]

Webhostingtalk would be your place. Why asking here?

[Brad Mitchell]

There are several business brokers who specialize in selling host entities and ISPs. If you or the owners of the company you are referencing would like to be introduced to one of them or solicit me with the opportunity, please send me an email or give me a phone call. I think I am familiar with it from discussions years back but would be happy to revisit.

Sincerely,

Brad Mitchell

[chaze]

Originally Posted by Just Alex

Webhostingtalk would be your place. Why asking here?

That forum is a bunch of scammers and twelve year old kids acting like that run a business.

Your get much more professional feedback here.

[epitome]

Originally Posted by chaze

That forum is a bunch of scammers and twelve year old kids acting like that run a business.

Your get much more professional feedback here.

LOL haven't been there in like 8 years. Seems like nothing has changed. Everybody had a reseller account and acted like they owned three data centers.

[Tjeezers]

Originally Posted by chaze

That forum is a bunch of scammers and twelve year old kids acting like that run a business.

Your get much more professional feedback here.

HI

was on your site
found some url`s that do not work

http://dwhswebsite.com/tryout/www/in...der/TryoutFP/1
for example this ^ url, that should show a online demo for your future clients.

[chaze]

Originally Posted by Tjeezers

HI

was on your site
found some url`s that do not work

http://dwhswebsite.com/tryout/www/in...der/TryoutFP/1
for example this ^ url, that should show a online demo for your future clients.

Oh yeah the site building demo, thanks!

It's rv site builder, thanks again.