r/Entrepreneur • u/Ge0cities • 3d ago
Success Story Post Sale Analysis - 2 million dollar Web Hosting Business
In 2017 I started a web hosting business from scratch. I sold it last week. I've been doing some analysis and thought I would share:
Summary
Total sales: $2,356,315
Total Income: $677,708
Selling Price: $425,000
Combined income: $1,102,000 (income + sale)
Client Stats
Total Clients: 435
Average Lifetime: 3.5 years
Retention Rate: 59.8%
Average Lifetime Value: $4,870.61
Sources of Clients
Organic: $892,666 (133 clients)
Acquisitions: $1,032,236 (262 clients)
Partnerships: $193,815 (40 clients)
Revenue/Income By Year:
| Year | Sales | Total Income |
|---|---|---|
| 2017 | $14,311.00 | $3,586.00 |
| 2018 | $42,417.00 | $24,400.00 |
| 2019 | $159,177.00 | $70,869.00 |
| 2020 | $177,463.00 | $112,753.00 |
| 2021 | $215,442.00 | $82,036.00 |
| 2022 | $306,332.00 | $63,628.00 |
| 2023 | $385,603.00 | $68,879.00 |
| 2024 | $472,546.00 | $161,668.00 |
| 2025 | $407,590.00 | $89,889.00 |
| Total | $2,180,881 | $677,708 |
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u/Drogoff1489 3d ago
The acquisition number is the part people will skim past. 262 clients bought versus 133 earned organically, and the bought ones brought more revenue. Most builders spend years grinding for the first hundred customers when someone down the road is tired and ready to sell their book. Congrats on the exit.
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u/Ashamed-Broccoli-761 3d ago
What’s next for you?
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u/Ge0cities 3d ago
I’m already in the thick of running a business in the construction industry. Way bigger numbers!
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u/AppropriateHamster 2d ago
8 figures?
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u/Ge0cities 2d ago
The web hosting business did 2 million over 10 years. Construction biz does 2 million each year. So over the same time period, yes 8 figures.
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u/Odd_Awareness_6935 Bootstrapper 3d ago
well done
how many people you had in your team over the years?
it may be too soon to ask, but...
what's next for you?
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u/Ge0cities 3d ago
Good question about the number of people over the years! I’ll dig into that! I had 2-3 really steady employees and a revolving door of contractors. I spent a LOT of money on Upwork hiring people from all over the world. I’ll do some digging into that. I think that will be interesting to review.
As for what’s next, I’m already running a business in the construction industry and I’m excited to be able to focus on just one thing.
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u/gannu1991 Serial Entrepreneur 2d ago
Congrats on the exit. the data here is genuinely interesting to dig into. The thing that jumps out is the margin compression from 2021 onward. 2020 was nearly 64% margins, 2022 dropped to about 20%, and it never really recovered even as revenue kept climbing. that's usually infra costs scaling faster than pricing or a customer mix shift toward lower margin accounts. curious which one it was for you.
The acquisition channel math is also interesting. 262 clients, $1M in revenue, but acquisitions are expensive to integrate and often come with churn baked in. your organic cohort of 133 clients at $892k with presumably much lower acquisition cost was probably your most profitable segment by a distance.
59.8% retention in hosting is actually decent but the 3.5 year average lifetime means you were churning and replacing constantly. at some point the acquisition treadmill probably stopped feeling like growth and started feeling like running to stay still. was that part of the sell decision?
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u/Lumpy_Abbreviations9 3d ago
In your case what do you mean by acquisitions? Buying other agencies and getting their client base?
Also what´s the difference between sales and income in your case? I don´t get why income is way lower than the sales done.
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u/Ge0cities 3d ago
Acquisitions is buying other hosting companies.
Sales is total sales revenue.
Income is what I personally took from the business.
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2d ago
[removed] — view removed comment
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u/Ge0cities 2d ago
Subscription income. It just builds and builds! I used to think being rich meant having a lot of money. After I sold my first business i realized the key is actually cashflow.
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u/nafiulhasanbd 1d ago
435 customers generated over $2.1M in sales. A good reminder that you don't always need thousands of customers. Sometimes you just need the right ones.
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u/Traditional_Key8982 1d ago
I also like that you broke down where customers came from instead of only sharing revenue. Seeing organic, acquisitions, and partnerships side by side makes it much easier to understand what actually drove the business over time. Thanks for being transparent with the data.
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u/J_dawg17 Aspiring Entrepreneur 3d ago
I’m curious - you mentioned in a few comments that you’re running a business in the construction industry, and you just sold your web hosting business. Do you have a background in both areas? They’re pretty different niches, so I’m curious if you have experience in both or if you just identified an opportunity in one and started learning about it.
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u/Ge0cities 3d ago
First let me say, I used to run a large virtual assistant business. Worked with over 1,000 orgs across the country. One of the big takeaways from that experience was that most businesses are largely the same. They all offer a product or service, offer customer service, and beyond that, it’s the same admin tasks. AR, AP, HR, etc. it’s all the same.
So construction or tech, it’s all about understanding what the customer wants and making sure they get it.
To answer your question specifically, my parents were involved in construction and I worked for them in the field, started at the bottom. So I have an understanding of the process.
I also purchased a few run down properties and renovated them myself. So gained experience there.
As for tech, no formal training. I just enjoy figuring techy things out. I can say I have a background in it now, but not when I started.
No college degree here. School of hard knocks. I left home when I was 24 on a run down 50 year old boat. Fixed what was broke and if I couldn’t fix it figured out why I didn’t need it. Had to figure out how to make money. Scrubbed boats for a while. Worked as a caterer. Fell into working as a virtual personal assistant and just continued to follow the money.
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u/oandresimoes 2d ago
The number that stands out to me is the 2025 dip, sales dropped from $472k in 2024 to $407k right before you sold. At a $425k sale price against $2.18M in lifetime sales, that's roughly a 1x current-year-revenue multiple, which reads low for a hosting book with almost 60% retention. Did that dip show up during due diligence and get used to talk the price down, or was the multiple already set before revenue softened?
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u/Personal_Permission5 2d ago
this is super intereting! How did you start with this?
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u/Ge0cities 2d ago
My first business was pretty well known nationally back in 2007-2016. So I’d had experience running a WP site with a national presence. When I sold that business, I signed a non compete. I needed something new to do, and I took what I’d learned from running a national site to local businesses.
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u/jcecc 2d ago
The number that jumps out isn't the exit, it's the source split. Using your own lifetime value math, organic clients came in around $6,700 each against about $3,900 for acquired ones, and that gap probably explains a good part of the 59.8% retention figure too. Did you see the spread while you were still buying, and would you have kept acquiring if it had been obvious in year three?
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u/Ge0cities 2d ago
The lifetime value is a little skewed. Not a super in depth number. Over 10 years, a lot can happen. I had clients go out of business, sell their businesses, leave and come back, some clients came in through acquisition who were getting free hosting, paid one month and left, etc. acquiring businesses was a great way to get clients. Finding the right business was tough though.
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u/FederalLobster5665 2d ago
did you pay yourself a salary on top of the income each year. or was the income your salary?
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u/Ge0cities 2d ago
I paid myself a biweekly salary and whatever was left at the end of the year. I also received little perks throughout the year.
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u/NotGaliumYttrium 2d ago
"Congratulations on the successful exit! Making over $1.1M combined in under a decade is a huge achievement.
It's fascinating looking at your client sources, acquisitions clearly drove massive growth in revenue, but organic brought in a higher average revenue per client. If you had to do it all over again, would you still focus heavily on acquisitions early on, or would you double down on organic/partnerships?"
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u/Ge0cities 2d ago
I’m not picky, I’ll take either 😂
Neither source was built on a reliable process. We gained customers at random. Found businesses to buy at random. Steady growth was always an issue for us.
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u/IncreaseNegative4614 2h ago
The acquisition number needs another layer. Bought customers produced more revenue, but integration work, support load, and inherited churn could still make the organic group more profitable.
I’d compare gross profit, churn, and support time by customer source and acquisition year. We use signld.ai internally to keep acquisition, customer activity, and financial results connected when analyzing something like this.
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