UK Hosting Business - What's it Worth?

RX926 · 14th September 2008

I'm considering selling my hosting business. I have 2 businesses and the hosting is taking too much of my time - my family do not see much of me anymore and that needs to change.

I have an eNom account with 350 customer domains.

I have a UK dedicated server (cPanel/WHM) with 581 accounts (we have 27 resellers who have control of 433 of these accounts), giving 148 directly sold shared hosting accounts

I also have a US VPS with 60 shared accounts.

I also have a reseller account on a FTP/rsync backup server with 7 accounts.

Overall, the annual turnover from this is around 16K GBP

Most new custom is from recommendations. The majority are annual paying customers, but some pay monthly.

The business has been established 4 years and we have a good name/reputation amongst our customers.

How would I go about estimating the value of this? I'm not looking for offers right now, as I'm only considering selling my the hosting business, with it's worth being a key factor in this decision. Has anyone got any idea of it's value from what I've said above?

Karl · 14th September 2008

Generally speaking, profit will be how it is valued, TBH after 4 years, 16k isn't a lot, especially with the number of accounts. I'm sure you'll find a buyer though.

thebyp · 14th September 2008

General rule of thumb at the moment is about 10 months profit.

administrator · 14th September 2008

Do people really sell for 10 months profit?

JamieBeeston · 14th September 2008

People sell for anything Neil.

I'm more of the old skool 8-12x EBITDA camp, but as recent threads from some other of the more takeover experienced members, it can be anything from small multiples of Turnover, to larger Multiples of Gross, to very large Multiples of Net

J

thebyp · 14th September 2008

Unfortunately it is the current trend.

JamieBeeston · 15th September 2008

Current trend for what?

< £10k businesses?
< £100k businesses?

Certainly not for any decent sized multi-staff employing going concern.

dazmanultra · 15th September 2008

As a small business which can be easily integrated into a larger host's existing platforms, it is probably worth around 1 year's turnover (10-14 months). Possibly a little more or less depending on growth or client churn rates.

Karl · 15th September 2008

At the end of the day, it's that old cliche, it's only worth what someone is willing to pay. For many that depends on things like ARPU, factoring in that a good percentage will leave etc.

othellotech · 15th September 2008

Quote:

Originally Posted by administrator

Do people really sell for 10 months profit?

Yes, others fors fixed amount per direct client, others for x months t/over, others for a random number plucked from thin air ...

The majority of "hosts" dont make any money, quite often being a "drain" on the finances from the operators "real job" - largely due to a lack of planning, foresight, business knowledge and a decent pricing strategy - from a buyers perspective why would you want to integrate into a business something that is haemoraging cash ?

Back to the OP ...

Quote:

Originally Posted by RX926

* eNom account with 350 customer domains.
* UK dedicated server (cPanel/WHM) with 581 accounts
27 resellers who have control of 433 of these accounts
148 directly sold shared hosting accounts
* US VPS with 60 shared accounts.
* reseller account on a FTP/rsync backup server with 7 accounts.
* annual turnover from this is around 16K GBP

Without knowing what you pay for any of the accounts, domains etc, guestimating gross-profit is difficult

So assuming:
10/year/domain = 3500 - cost 1750 = 1750/yr
200/year/reseller = 5400 - cost (12*100) = 4200/yr
30/year/shared = 6240 - cost (12*100) = 5040/yr
50/year/rsync = 250 - cost (12*25) = -50/yr

You'll get offers ranging from 8k to 16k depending on the reputation/name, what other software/forums/etc included, what system handles your billing etc et

FH - Tim · 15th September 2008

To be fair the reason a lot of these "hosts" get sold for so much is they usually have customers on a low spec server which if its holding its own means you can move the customers to your boxes without any worry and just have the extra income.

But then Mr.Golding already knows that and so do half the people who keep out bidding me, namely that suh**** bloke (can't remember his name)

othellotech · 15th September 2008

Quote:

Originally Posted by FH - Tim

so do half the people who keep out bidding me

Then ether you or they are valueing it wrong :P

FH - Tim · 15th September 2008

I'm valueing it at what its worth to us, which is the only way to value them

DCH-Josh · 16th September 2008

Hello,

Are you still selling this company? Mind if i pm you to chat about selling it? I might buy it or might have someone who will.

I'll message you now.

Thanks

othellotech · 16th September 2008

Quote:

Originally Posted by DCH-Josh

Are you still selling this company

In my extensive experience in these matters, one of the general pre-requisites to a well structured takeover deal, is that both parties at least have basic training in the usual fundamentals like being able to *READ*, I suggest you go back to the original post and spot the miscommunication ...