Buying Clients/Established Business

[Matt Midgley]

Hello again,

I would be interested to know how many people have either bought clients or bought and established web hosting business. What were your experiences diring the transfer? Just any notes/ideas/thoughts on the matter would be appreciated.

 

[Matthew]

Hello Matt,
I have evperience of selling a hosting business and buying a web property (but not a host).

This list is not complete but will help a little.
Choose a company with the technology you are familier with. For example you are a Helm Control Panel Windows Host from what I see in your sig. So it would be worth buying clients who are in Helm.

If I was buying I would prefer to buy the clients and the whole business so that you can move them over and they are the same brand and familier with the website they have purchased hosting from.

Do not change prices for them as they wouldnt want new owners who was out to change everything. They will like what they have 99% of the time. This means that you shouldnt go buying clients who you do not feel your business plan can support... meaning do not buy a host who offers unlimited everything

Make sure you have a good contract and that you come to some agreement on payment so that both the buyer and seller are happy with the terms and you do not get ripped off.

See if the owner can help with the transition... if not then it will be a long day/week of transferring clients. Just take them 1 at a time and test them and you will be ok.

Price to pay.... Some people argue a hosting business is worth 12 months of the annual revenue and some say higher and some say lower. I do not know the official answer, but you want to make it fair for both people.

 

[imported_etechsupport]

Hello again,

I would be interested to know how many people have either bought clients or bought and established web hosting business. What were your experiences diring the transfer? Just any notes/ideas/thoughts on the matter would be appreciated.

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As far as buying clients is concerned I fear there is chances that the former company try to pull back those customers after establishing a new hosting company.

 

[monaghan]

I know it's an old subject, but as it's been raised again...

My concerns would be as to why people are selling, looking at the offers on some web hosting forums, people seem to be paying huge sums for newish companies where the client base has had little time to get bedded in.

If the client base is good or the company is doing well, then why do they sell ? There are (I'm sure) some genuine sales, but in my opinion, the only reason I can see for selling clients is the fact that you've messed up big time and need a way out

 

[Lesli]

Interesting thoughts, monaghan.

That might be another thing to research: why are they selling their client base? What's been the history of their business? Are their clients planning to bail because service has been so lousy? Will any new buyer have an uphill battle to re-establish client trust (or just the normal one of "Hi, new owner here, but don't worry, everything's going just fine"?) And, possibly just as important: are they using the hosting-company sales as a moneymaker, and are they be opening up a new hosting business and starting the cycle all over again? (Not only could the new business be a potential competitor, like etechsupport mentioned; but I'd personally rather not buy from people who are doing this.)

 

[Matthew]

I think with people paying huge sums for newish companies is where the hosting industry is unfortunatly been going for the past few years. Hosts starting up thinking it's easy and quick money and then realising the hard work, selling up and someone buying thinking the high amount paid will easily be made back because "hosting to them is easy" until they do it

I think there can be a number of reasons why hosts are sold and it comes down to being wise when buying and asking the right questions and getting contracts sorted out.