Comments on: Web Hosting Company | Shopping Cart Software http://www.internetbizhelper.com/web-hosting-shopping-cart-software/ Buy An Internet Business Opportunity, Start An Internet Business Opportunity, Sell An Internet Business Opportunity Thu, 29 Dec 2011 13:13:16 +0000 hourly 1 http://wordpress.org/?v= By: Don Janke http://www.internetbizhelper.com/web-hosting-shopping-cart-software/comment-page-1/#comment-6679 Don Janke Wed, 05 Sep 2007 10:38:07 +0000 http://www.internetbizhelper.com/web-hosting-shopping-cart-software/#comment-6679 The Asking Price is not set. What I've explained to the owners is to expect an offer comprised of two components. The first componenet is a cash down payment. The second component is a proposal of an "earn out". An "earn out" is made when a business can not support a higher offering price based on historical earnings; but the future earnings potential is based on the "intrinsic" value of the business. An <em>earn out</em> is typically a percentage of gross revenue or gross profits over a period of one to three years. The Asking Price is not set. What I’ve explained to the owners is to expect an offer comprised of two components. The first componenet is a cash down payment. The second component is a proposal of an “earn out”. An “earn out” is made when a business can not support a higher offering price based on historical earnings; but the future earnings potential is based on the “intrinsic” value of the business. An earn out is typically a percentage of gross revenue or gross profits over a period of one to three years.

]]> By: cory http://www.internetbizhelper.com/web-hosting-shopping-cart-software/comment-page-1/#comment-6675 cory Wed, 05 Sep 2007 05:26:43 +0000 http://www.internetbizhelper.com/web-hosting-shopping-cart-software/#comment-6675 Hello What is the estimated asking price for this company? =================== Hi Cory: The owners received an offer at $195,000; which was declined. The successful Buyer will most likely make a two part offer. Part one is cash at Closing. Part Two is an "earn out". An <em>earn out </em>allows the Sellers to participate in a percentage of revenue, gross profit, or net income; typically for a period of three to five years post closing. This form of purchase is made when the owner's have substantial assets invested in the business, and a strong recognition in the category, but has not yet monetized to any great extent. For example, look at the ~$400M purchase price of MySpace.com when its' revenue were "a few million". Social Networking web sites have yet to find the magic to properly monetize; although, the category is strong and monetization will arrive in the future. The purchase of MySpace.com included an <em>earn out</em> formula based on future monetization. Don Janke, Internet Business Broker Hello

What is the estimated asking price for this company?
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Hi Cory:

The owners received an offer at $195,000; which was declined. The successful Buyer will most likely make a two part offer. Part one is cash at Closing. Part Two is an “earn out”. An earn out allows the Sellers to participate in a percentage of revenue, gross profit, or net income; typically for a period of three to five years post closing. This form of purchase is made when the owner’s have substantial assets invested in the business, and a strong recognition in the category, but has not yet monetized to any great extent. For example, look at the ~$400M purchase price of MySpace.com when its’ revenue were “a few million”. Social Networking web sites have yet to find the magic to properly monetize; although, the category is strong and monetization will arrive in the future. The purchase of MySpace.com included an earn out formula based on future monetization.

Don Janke, Internet Business Broker

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