SickPuppy Posted March 15, 2010 Share Posted March 15, 2010 For all the small GSP owners out there thinking about selling, try to be realistic on your asking price. Just because you company makes $5000 a year doesn’t mean it is worth $5000 Do an honest assessment of your company’s value. If you rent your servers and software and all you have to offer is 20 or so customers, guess what, your company is not worth $5000 and probably not even $500. Things to consider are your Net Operating Income, Cash flow, and Assets. If any of these are negative then you are in a position of weakness and this will have a negative impact on price. Also keep in mind Fixed and Variable expenses. Time is the factor that most sellers do not accurately consider. How much time do you devote to the development and operation of your company and how can you use this time more efficiently. The average small business owner works 60 to 80 hours a week running their business. Link to comment Share on other sites More sharing options...
dimitrifrom31 Posted March 15, 2010 Share Posted March 15, 2010 the good price is the price you estimate. If you think your company is worth 5000$ then it probably means you would not sell it for under 5000$ so it is a good price, whatever anY1 else think about it. Those who disagree with your price are free to not buy if not interested. Ppl will then adjust (or not) their price if they really wana sell facing they overestimated it. That being said Ive been asked several times to sell my company, I know the price I ask for is "insane" for those who were interested in buying but I wouldnt sell at any lower price so for me its a fair one. Link to comment Share on other sites More sharing options...
swish Posted March 16, 2010 Share Posted March 16, 2010 Most companies are purchased for at least what a 1 year profit is. However it seems to be the case of large low ball gaps in the GSP world. Unfortunately most companies will not sell for what they make in a one year period because either when they are ready to sell they are headed to bankruptcy or nobody will pay the asking price. Either way good writeup and good points for things to consider when valuing. Link to comment Share on other sites More sharing options...
SickPuppy Posted March 16, 2010 Author Share Posted March 16, 2010 What the seller thinks his company is worth means little. It is what the buyers think the company is worth that matters. The factor considered by most buyers is the risk level. A high price tag is not a problem if the investment is low risk. And a low price tag could be a problem if the company is a high risk investment. A company that has been in business for less than a year is high risk no matter what their net operating income is. Link to comment Share on other sites More sharing options...
SickPuppy Posted March 16, 2010 Author Share Posted March 16, 2010 Most companies are purchased for at least what a 1 year profit is. Not true. This depends on the position of the company. A well established company could get many times that amount where a new company that is in financial trouble may only get a small percentage of their net operating income. Link to comment Share on other sites More sharing options...
lpgservers Posted March 16, 2010 Share Posted March 16, 2010 How are any of you going to make generalized statements about an argument that begins with no facts? Your talking hypothetical situations based on your own individual beliefs. Here is the simple fact, a Company is worth what someone is willing to pay for it. Making generalizations or drawing upon made up "facts" (referring to the statements of the average small business owner works 60 to 80 hours a week running their business or Most companies are purchased for at least what a 1 year profit is) isn't a valid nor intellectual argument. However, I do thoroughly enjoy reading what wonderfully extravagant statements that some around here make and look forward to more as they are delightfully entertaining. Link to comment Share on other sites More sharing options...
ECF Posted March 16, 2010 Share Posted March 16, 2010 Interesting thread. Here is some general info on business valuation: http://www.ustyleit.com/Valuation_Best_Practices.htm?gclid=CL25q5nHvKACFctx5QodiUpTTw Link to comment Share on other sites More sharing options...
dimitrifrom31 Posted March 16, 2010 Share Posted March 16, 2010 Here is the simple fact, a Company is worth what someone is willing to pay for it. 100% agree, thats just market law and same goes for many other domains. If your interested in football (what Some of you call "soccer") you get a good exemple (even if at another scale) of how are things/^^m valued. Buying a good player is often a high risk investment however you can reach crazy amounts just because both parties agreed on a price that is fair enough for one to buy and for the other to sell. Link to comment Share on other sites More sharing options...
SickPuppy Posted March 16, 2010 Author Share Posted March 16, 2010 Here is the simple fact, a Company is worth what someone is willing to pay for it. I think I already made that statement What the seller thinks his company is worth means little. It is what the buyers think the company is worth that matters. Link to comment Share on other sites More sharing options...
SickPuppy Posted March 16, 2010 Author Share Posted March 16, 2010 Making generalizations or drawing upon made up "facts" (referring to the statements of the average small business owner works 60 to 80 hours a week running their business .... isn't a valid nor intellectual argument. This is a fact my friend, do a little research it is not hard to find this information. You can start with the Small Business Watch survey. Link to comment Share on other sites More sharing options...
adamnp Posted March 16, 2010 Share Posted March 16, 2010 It is annoying sometimes when you are trying to pickup some things at a bit of a discount from someone dropping off the face of the earth and they want prime dollar for it. I can understand the frustration. It's a close resembilence of some of these domain guys that register all your domains then try to hold them hostage for $5000 a piece--When they mean nothing to nobody but you. Such is life I guess Usually just saying no, then waiting a bit longer ends up saving you money anyway. Link to comment Share on other sites More sharing options...
lpgservers Posted March 16, 2010 Share Posted March 16, 2010 I think I already made that statement Actually you didn't. Your insinuating that the buyer only sets the price when in fact that couldn't be farther from fact. There is always negotiation and bargaining but obviously you don't quite understand that. Also, what you said and what I said are fundamentally quite different. This is a fact my friend, do a little research it is not hard to find this information. You can start with the Small Business Watch survey. I don't mean to imply that your naive or misinformed. I'm just pointing out to you there is no way to prove that. Facts are facts since they are able to be proven. Hypothesis or theories aren't facts even though there may be corroborating or factual information available but cannot be proven. So again, there is no way to substantiate your blanket statement that the average small business owner works 60-80 hours per week. However, I'm done trying to point out to you that your generalizations are fallible and you may continue to post them as they continue to maintain being comical at the least. Anyhow, let the charades continue. Link to comment Share on other sites More sharing options...
SickPuppy Posted March 18, 2010 Author Share Posted March 18, 2010 I don't mean to imply that your naive or misinformed. I'm just pointing out to you there is no way to prove that. I have an M.B.A with a major in marketing so I am not some kid that rents a few dedicated servers and calls himself a company. This data is available and extensive research on the subject has been done. Google is your friend dude, it knows all. Link to comment Share on other sites More sharing options...
tehrichie Posted March 18, 2010 Share Posted March 18, 2010 I have an M.B.A with a major in marketing so I am not some kid that rents a few dedicated servers and calls himself a company. This data is available and extensive research on the subject has been done. Google is your friend dude, it knows all. I don't know- To be honest after reading your posts, I don't even think I would be comfortable with selling my clients off to someone as yourself. Is this how you always are or only on these forums? I came into this thread, not with the intent of selling, but with the intent of just browsing, and your first post is telling the seller 'Guess what? I have a piece of paper and I'm not just a kid living in my parents basement selling servers, yer company ain't worth shit!' Come on man, seriously? A simple 'PM me if you're interested' would have done just well, and then you could at least negotiate with someone. Just my two cents. Link to comment Share on other sites More sharing options...
HIS-MOTHER Posted March 19, 2010 Share Posted March 19, 2010 Just my two cents. My degree says your Two cents is only worth 1.33 cents on the market. Of course mine came in the Cracker Jack box. Link to comment Share on other sites More sharing options...
Feltz Posted March 19, 2010 Share Posted March 19, 2010 LOL this post was silly to start with but like LPGServers said its funny as hell to read the ego stroking. Link to comment Share on other sites More sharing options...
tehrichie Posted March 19, 2010 Share Posted March 19, 2010 My degree says your Two cents is only worth 1.33 cents on the market. Of course mine came in the Cracker Jack box. I better quit smoking and save big bucks like you. Link to comment Share on other sites More sharing options...
HIS-MOTHER Posted March 19, 2010 Share Posted March 19, 2010 I better quit smoking and save big bucks like you. I'm also running 18 miles per week!! 5 Mon, 5 Wed, and 8 on Fri! By next year I'm gonna try for the Marathon held here in Chicago............. Pretty damn good for a 42 yr old fucker that smoked for 27 years eh? .. Link to comment Share on other sites More sharing options...
OldMan Posted March 19, 2010 Share Posted March 19, 2010 Off track i know YOUR ONLY A PUP MOTHER Link to comment Share on other sites More sharing options...
tehrichie Posted March 19, 2010 Share Posted March 19, 2010 I'm also running 18 miles per week!! 5 Mon, 5 Wed, and 8 on Fri! By next year I'm gonna try for the Marathon held here in Chicago............. Pretty damn good for a 42 yr old fucker that smoked for 27 years eh? .. Which marathon is that? And hell yea that's good. Link to comment Share on other sites More sharing options...
Mike Posted March 19, 2010 Share Posted March 19, 2010 I'm also running 18 miles per week!! 5 Mon, 5 Wed, and 8 on Fri! By next year I'm gonna try for the Marathon held here in Chicago............. Pretty damn good for a 42 yr old fucker that smoked for 27 years eh? .. Pat if you run the marathon next year, I'll run it with you Link to comment Share on other sites More sharing options...
HIS-MOTHER Posted March 19, 2010 Share Posted March 19, 2010 Which marathon is that? And hell yea that's good. Bank of America... http://www.chicagomarathon.com/CMS400Min/Chicago_Marathon/runner_information/index.aspx?id=500 Link to comment Share on other sites More sharing options...
lpgservers Posted March 19, 2010 Share Posted March 19, 2010 Pat, that is amazing and I certainly wish I could say the same. At 30 I've quit now for only two years and certainly am in no condition to go run 5 miles. When I was a kid I was a long distance runner (too short and lacked the speed to do sprints) and ran 5-6 miles a day. Oh I really need to get myself back into it but I feel it everytime I go run. I've taken up bicycling as I find it gives me a great workout yet my knees, ankles, and shins don't get pounded. Link to comment Share on other sites More sharing options...
Mike Posted March 19, 2010 Share Posted March 19, 2010 Swimming is my new favorite. Been training for my first triathalon and all the pool time has definitely payed off. Also really easy on the joints (unless your doing flys of course ). Link to comment Share on other sites More sharing options...
Feltz Posted March 20, 2010 Share Posted March 20, 2010 Wow I reckon ill put my popcorn and soda away cause this topic went to soft cute puppies and clouds Whats running? Link to comment Share on other sites More sharing options...
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