Selling My Business

How should I determine a fair price?

[inwebsys]

I am considering selling my small managed hosting business, but I'm not sure how to calculate an acceptable selling price.

Any guides or pointers?

Thanks

[Shane]

The best bet is to get an accountant to do a business valuation.

Also, take a look at PreviousPost [webmasterworld.com]

It doesn't deal directly with a hosting company but the principles are the same.

Good Luck,
Shane

[mgm_03]

1. search Amazon for books on selling a business...a little homework.

2. then talk to an accountant who has experience working with businesses, or better has helped do calculations (this may seem obvious but not all of them have...check first)

If you've kept good financial records, that will help your acctant.

[netguy]

You might also want to compare what other hosting companies are selling for. The Wall Street Journal has one of the better business selling sites at:
bizbuysell.com

Drop down the menu to 'Internet Businesses,' then ISPs or whatever category that best suits your operation.

Inwebsys, I would think that it would be fairly easy to determine a reasonable sales price based on the number of hosting clients you currently have. If you go to the trouble to develop a 3-5 year pro forma, you might generate even more cash in the sale (show added investment for adwords or other promotion, additional capitalization in hardware, and anticipated sales increases (and net profits) for the period.

The good news is this kind of residual business can be quite appealing to the right buyer.

Best of luck!

Steve