I disagree with comments relating to X times annual revenue. I think the issue is more that buyers are realizing that in this market and economy X times revenue doesn't adequately valuate a company. A 3-4X times annual could still be achieved if the most of the gross revenue was actually monthly profit. Some businesses are in that situation. They have their gear paid for, most of their reoccuring costs are in-kind trade, etc. The problem is that isn't usually the case, which is why they get 1X valuations, if even that.. Usually what occurs is, a business has next to no profit, poor cashflow, and leased out the kazu for 3-5 years, and thus is tired out of working long hours for free. Further the buyer has to consider risk, and in this economy its uncertain whether business models will mature to success.
I think you need to really look at your business to determine its profile, before you can begin to establish a worth or a method of valuating it. For example, Surely a company that owns a million dollars of gear outright is not going to be valued the sam as a company that has 3 years of leases remaining on their books for the same amount. You could also look at how to get rid of your primary costs. For example, maybe backhaul is one of the large expenses? If so would a WISP that got a middle mile infrastructure grant, benefit by your network? The biggest problem I see with getting a high valuation on a 500 sub network is that there might not be enough subs to really cover the payroll of techs on the street that buyer would have to obtain to manage it. Tom DeReggi RapidDSL & Wireless, Inc IntAirNet- Fixed Wireless Broadband ----- Original Message ----- From: "3-dB Networks" <wi...@3-db.net> To: "'WISPA General List'" <wireless@wispa.org> Sent: Friday, July 17, 2009 4:36 PM Subject: Re: [WISPA] Question re: WISP for sale > Yeah don't expect over 2x annual revenue right now. 1x might be more > realistic. depending on the network and what a new operator would have to > do > to bring it into theirs, etc. > > > > Daniel White > > 3-dB Networks > > http://www.3dbnetworks.com > > > > From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On > Behalf Of Brian Rohrbacher > Sent: Friday, July 17, 2009 1:30 PM > To: WISPA General List > Subject: Re: [WISPA] Question re: WISP for sale > > > > I have heard .5-2 times annual many times on this list........ > > Josh Luthman wrote: > > One way I have heard it done: > > Take the annual gross revenue, times it by 3 (three years gross revenue) > and > that's the buy out cost starting point. Seen this more so with telecom > (voice) then data services, but it's a place to start. > > Josh Luthman > Office: 937-552-2340 > Direct: 937-552-2343 > 1100 Wayne St > Suite 1337 > Troy, OH 45373 > > "When you have eliminated the impossible, that which remains, however > improbable, must be the truth." > --- Sir Arthur Conan Doyle > > > On Fri, Jul 17, 2009 at 3:21 PM, Patrick D. Nix, Jr < > pni...@cnetworksolutions.com> wrote: > > > > I apologize as I know this has been discussed on the list before. We > are entertaining the idea of selling out of our respectable size > wireless ISP business in eastern Oklahoma. We have about 500 (growing > daily) subscribers. Anyway, we are working on determining the net worth > of the business. Any thoughts or formulas for determining this? > > > > Patrick Nix, Jr., > Computer Network Solutions > CSWEB.NET Internet Services > IT Manager > > http://www.cnetworksolutions.com > http://www.csweb.net > > (918) 235-0414 > > > > ________________________________ > > Attention: This e-mail and any attachments may contain confidential and > privileged information. If you are not the intended recipient, please > notify the sender immediately by return e-mail, delete this e-mail and > destroy any copies. Any dissemination or use of this information by a > person other than the intended recipient is unauthorized and may be > illegal. > > > > > > > ---------------------------------------------------------------------------- > ---- > WISPA Wants You! Join today! > http://signup.wispa.org/ > > ---------------------------------------------------------------------------- > ---- > > WISPA Wireless List: wireless@wispa.org > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > > > > ---------------------------------------------------------------------------- > ---- > WISPA Wants You! Join today! > http://signup.wispa.org/ > ---------------------------------------------------------------------------- > ---- > > WISPA Wireless List: wireless@wispa.org > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > > > -------------------------------------------------------------------------------- > WISPA Wants You! Join today! > http://signup.wispa.org/ > -------------------------------------------------------------------------------- > > WISPA Wireless List: wireless@wispa.org > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ -------------------------------------------------------------------------------- WISPA Wants You! Join today! http://signup.wispa.org/ -------------------------------------------------------------------------------- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
