It's nice to hear of a story like that for a change!!!!! Good for you two.
As I see it there's three ways that this would work out.
Buy out his cash input plus a fair amount for his sweat equity.
Figure out your last 12 months income, multiply by 2 if you're making money,
1.2 if not, if it's close use something in between. Divide that by 2 and
pay him his share.
Lastly, and probably my favotire (remember I'm sitting here not there), pay
back his cash and leave him as a 10% or so such figure stock holder.
Hope that helps!
Marlon
(509) 982-2181 Equipment sales
(408) 907-6910 (Vonage) Consulting services
42846865 (icq) And I run my own wisp!
64.146.146.12 (net meeting)
www.odessaoffice.com/wireless
www.odessaoffice.com/marlon/cam
----- Original Message -----
From: "Mark Nash" <[EMAIL PROTECTED]>
To: "WISPA General List" <wireless@wispa.org>
Sent: Thursday, April 27, 2006 3:51 PM
Subject: Re: [WISPA] Business Value
Thanks Marlon... For the record, it's not a rough split between me and my
partner. He's got a more profitable business going, he's put up money for
the wireless business, he's 53 and going to retire when he's 55, so he
wants to focus on his other business. That's what I would do if I were
him. The money he put in is easy to account for and pay back, but he has
also put in a considerable amount of unpaid time and he'd like to realize
some benefit from that, and I should honor that in the split. Makes
sense. So I'm trying to figure out what's reasonable to offer for his
part in all of this.
Mark Nash
Network Engineer
UnwiredOnline.Net
350 Holly Street
Junction City, OR 97448
http://www.uwol.net
541-998-5555
541-998-5599 fax
----- Original Message -----
From: "Marlon K. Schafer (509) 982-2181" <[EMAIL PROTECTED]>
To: "WISPA General List" <wireless@wispa.org>
Sent: Thursday, April 27, 2006 3:45 PM
Subject: Re: [WISPA] Business Value
Hi Mark,
I don't have time to get into the deep details right now. I can probably
help with this if you'd like. I've done some valuations based on income,
customer base etc.
Standard business stuff would put your company value at 1.2 to 2x annual
earnings. OR 3 to 5 x annual profit (probably not much of that if you're
growing well).
With a wisp, it gets more complicated because most wisps are growing fast
and are just starting to get into the profit mode. So the value of the
company won't even hit most guys for a couple more years. shrug
I've also seen WISPs get paid for the number of homes passed in addition
to the above.
The last valuation I did I took the number of customers possible on the
hardware installed, cut that down to more reasonable numbers (100 users
per ap), figured a moderate growth rate (max of 4 per day after 3 years)
and came up with an expected customer base in 36 months. That's the
point that I put a value on the company. I used 1.5x annual earnings.
At this point the company would have been HUGELY profitable though.
(started out with 1 install per day, ramped that up by 1 every 6 months
or so) *I* think I had a reasonable growth rate (market size was nearly
1,000,000 people much of which had NO broadband) and left room for
several competitors to gain market share.
On a partnership breakup it gets more difficult. No one probably has any
money (or they'd not be fighting so much in the first place). One guy
usually put up all the funding and the other one did all of the work.
There are hard feelings and often friendships on the line. In those
cases about all you can do is to take the income today and use that for
the value. Or one partner can agree to go silent and let the other one
carry on with business. Tough stuff either way.
Hope that helps. Feel free to call if you'd like to talk it over some
more.
Marlon
(509) 982-2181 Equipment sales
(408) 907-6910 (Vonage) Consulting services
42846865 (icq) And I run my own wisp!
64.146.146.12 (net meeting)
www.odessaoffice.com/wireless
www.odessaoffice.com/marlon/cam
----- Original Message -----
From: "Mark Nash" <[EMAIL PROTECTED]>
To: "WISPA General List" <wireless@wispa.org>
Sent: Thursday, April 27, 2006 7:31 AM
Subject: [WISPA] Business Value
I may be splitting with my partner in the coming months. We'll have to
come
up with a buy-out agreement. Has anyone got experience with valuating
WISP
businesses?
Mark Nash
Network Engineer
UnwiredOnline.Net
350 Holly Street
Junction City, OR 97448
http://www.uwol.net
541-998-5555
541-998-5599 fax
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