Hi, I am buying webhosting company with 50 to 60 customers... All are few years at firm. The price should be around 1500$. Is price ockay? Any advice on what should I put attention on? Average price for 1y hosting is 60$... That sounds alright? Should I buy? Tnx
Hello, Seems decent, I would try to avoid taking on 50-60 yearly customers paying $60 a year for hosting. It's around $3600, It's worth it. How long until most of the customers renew?
Depends on the profitability, how many resources they use that cost you money, how many servers they have, and whether you already have a hosting company that can absorb these customers into an existing infrastructure. If this is your first foray into hosting then it's going to take you a long time to get your money back and you'll need to keep working in the meantime as there isn't enough income being generated. If you already have a hosting company then it would be more attractive.
Hm, it is first hosting adventure, but I have mine very good friend who had worked at webhosting business so that would make things easier! Tnx opinions guys!
Actually, that's pretty bad advice, since you will see no revenue from those clients until their year is up. You want monthly clients so that you immediately start seeing revenue from the business. Either way, tradition shows a 50-60% attrition rate when a hosting business is taken over. You should have 25-30 clients who stick around for the long term. That's not even enough profit to pay for the server. In fact, 60 clients will barely be enough to pay for the server. So you probably shouldn't count on seeing profit from your investment for quite some time.
If that's that case then you need to be very sure you can make money, get your investment back, and be prepared to deal with any eventuality at any time of the day. Hosting is a tough business competition wise, but it's a even worse on your social life and family life when you're starting out. You always need to be available for support, and you must always be ready to deal with servers and software not working so you can't stray far from your place of operations and you can forget vacations, weekends away, or days off for the next few years until you can make enough to employ staff. People think it's just a case of renting a server and the money will flow in. It couldn't be further from the truth which is why so many hosting companies fail and very few make it past a few years. Don't count on it. He has his own business to run. He won't give you advice or help you out for long without some sort of remuneration or without you falling out and no longer being friends. Your business is not his concern and it will eventually lead to resentment if you rely upon him too much. Be prepared to do it yourself - or not at all.
I would like to than all for their opinion, and sharing valuable advices. I dont gonna buy that hosting because all customers are friends or acquaintances of owner, so allot of them would flee after purchase is made. And one more thing - there is no contract between them, so.... Make allot of research before you buy anything.. Once more thank you for good advices!
Welcome, and good for you for checking into the client base and seeing what kind of clients they actually were. A lot of hosting companies get their friends to sign up for free account, or offer these ridiculous prices (i.e. $5/year unlimited everything) before making a sale so that it looks like there is a lot of revenue. Then the clients never continue service.
Are you familiar to hosting biz at all? I'd consider buying if only have an experience and know some strategies for it.
I have some reseller experience, and mine good friend worked for biggest local webhosting and one of biggest company in the world as technician. But no mater now, I quit because of reasons statet here before (customer flee, etc)....
Right, I got it. I mean, I'm guessing something was lost the first time. I understood your second explanation.
With $1500 in your pocket, you can start with a fresh site and start making an income within a month or so. I wouldn't buy 50-60 yearly clients for half that much.