Hosting company with 300 sites, affilate program

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  • tibberous
    Registered User
    • Jul 2007
    • 21
    #1

    Hosting company with 300 sites, affilate program

    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.
    Tags: None
    • Lykos
      Too lazy to set a custom title
      • Apr 2003
      • 31032
      #2
      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?

        Comment

        • HomerSimpson
          Too lazy to set a custom title
          • Sep 2005
          • 13826
          #3
          depends on how much profit does it make?
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            • Aquarius
              Confirmed User
              • May 2004
              • 4754
              #4
              None, The Hun only gets revenue for the.... fuck, don't remember the rest lol

                Comment

                • The Ghost
                  IslandDollars.com
                  • Oct 2004
                  • 12188
                  #5
                  Whats for sale?
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                    • shake
                      frc
                      • Jul 2003
                      • 4663
                      #6
                      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.
                      Last edited by shake; 05-23-2012, 10:45 AM.
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                        • uniquemkt
                          Confirmed User
                          • Mar 2012
                          • 305
                          #7
                          Used to be that the same price would be equivalent to roughly 1.5 years profit.

                            Comment

                            • Barefootsies
                              Choice is an Illusion
                              • Feb 2005
                              • 42635
                              #8
                              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.

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                                • chaze
                                  Confirmed User
                                  • Aug 2002
                                  • 9774
                                  #9
                                  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.
                                  Like the desert needs the rain
                                  We do fully manged WordPress, VPS, and Servers. Adult Host Pro https://adulthostpro.com/ Since 2001

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                                    • cgiGeek
                                      Confirmed User
                                      • Jan 2002
                                      • 203
                                      #10
                                      you need to post some margins if you want an answer
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                                        • raymor
                                          Confirmed User
                                          • Oct 2002
                                          • 3745
                                          #11
                                          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.
                                          Last edited by raymor; 05-28-2012, 10:56 AM.
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                                            • tibberous
                                              Registered User
                                              • Jul 2007
                                              • 21
                                              #12
                                              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.

                                                Comment

                                                • youdeserve
                                                  Confirmed User
                                                  • Nov 2011
                                                  • 695
                                                  #13
                                                  In the Shark Tank you would be having a 100000$ for 75% offer on the table for these numbers.
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                                                    • tibberous
                                                      Registered User
                                                      • Jul 2007
                                                      • 21
                                                      #14
                                                      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.

                                                        Comment

                                                        • ShoeBox
                                                          So Fucking Banned
                                                          • May 2012
                                                          • 2056
                                                          #15
                                                          I would hold onto it for a Year and then decide..

                                                            Comment

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