Hi, I am in discussions regarding buying a local webhosting business, its a reseller and mostly hosts local businesses and not much traffic to these sites. I am knowledgeable about webhosting, etc, but has anyone here ever done something similar? Any suggestions or things to look for, etc? Thanks!
It is a common online business these days to selling hosting services as a reseller. I think that it is a good business as evidenced by the sprouts of so many hosting sites. Give it a go then and come back here at DP once you are already earning money out of it. Perhaps by then you can give us deep discounts on your services.
I have heard a lot of stories when people bought web hosting company and most of the clients never renewed their accounts. If you really want to buy web hosting business, make sure that the existing clients base is happy with the service and be careful if you want to make any changes.
1/ try to confirm the number of active accounts. 2/ ensure the current host is not going to open up another hosting domain and possibly have clients follow them. 3/ try to pay no more for the business than an amount equivalent to 12 months hosting profits. As you have no guarantee that these clients will ever renew - which is enough of an investment to risk. Good luck.
I also recommend you make sure the existing company owner has a good billing and provisioning system setup. If they've done everything manually -- from sending invoices to setting up accounts, you could have a real mess on your hands. If they have a good system in place though, like WHMCS, then you'll be able to see the history of each client and see how much money is being earned. And the business transfer should be pretty seamless as well for you, the business owner and the clients.
Thanks for the replies, there is whm installed and cpanel for the customers and pretty automatic. The seller is going to sign a non-compete, but really I am not sure that would stop anyone since they can use a different name. I know this person on a personal level and doubt he really wants to be in the business anymore.