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How Much This Client Worth?

by spesialis
8 replies
This is a hypothetical question.

Let's say there's a client. Generating $500 of revenue per month.

Cost of providing services to him is $150 per month.

So this client will net you $350 per month.

- Services delivered is irrelevant, because all of it will be outsourced.
- There's no guarantee that the client will stay for a long time. (as there's no guarantee the website you bought on flippa will keep generating income).

How much are you guys willing to pay in advance for this client?

I'm just wondering how much market value for this kind of thing.
#client #worth
  • Profile picture of the author Anthony Gibson
    I would guess anywhere from 6-12 months revenue but I would want to see at least 3 months of consistent work to ensure that the revenue will predictably continue. I'm sure other people wouldn't need to see any proof. So I guess $3,000-$6,000. I'm not so sure you would have to include servicing costs, just gross revenue. My thoughts, hope that helps!
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  • Profile picture of the author beeswarn
    Revenue means almost nothing. Free cash flow means almost everything. With the information provided, I would offer less than MobilMarket says he would in the post above.. But the discounted cash flow model he's showing you is how to determine a valuation.
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    • Profile picture of the author jbyte
      I would also weigh how long the client has actually been a client.
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  • Profile picture of the author HorseStall
    It would be great if you could "lock" them in for a year minimum. This is what cell carriers do and they pay top dollar for customers because they know they are unlikely to switch after the commitment passes.
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  • Profile picture of the author massiveray
    No guarantee on further income, I'd give you $700 at the most.
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  • Profile picture of the author Jason Kanigan
    Ain't worth nuthin' to me--I haven't qualified them for myself yet!

    This is a lead, possibly with a strong referral...nothing more.
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    • Profile picture of the author spesialis
      Originally Posted by Jason Kanigan View Post

      Ain't worth nuthin' to me--I haven't qualified them for myself yet!

      This is a lead, possibly with a strong referral...nothing more.
      No, the client is willing to make a subscription. He's been sold.

      That's why I called them a client, not "prospective client".
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      • Profile picture of the author MorpheusMirror
        Originally Posted by HorseStall View Post

        It would be great if you could "lock" them in for a year minimum. This is what cell carriers do and they pay top dollar for customers because they know they are unlikely to switch after the commitment passes.
        Originally Posted by spesialis View Post

        No, the client is willing to make a subscription. He's been sold.

        That's why I called them a client, not "prospective client".
        What matters is how long of a subscription and is it automated. Only one client is to dangerous for me as a buyer. If you had a hundred people in a continuity program then most people would be willing to talk. The client bought "you" not the person you are selling the site to, so they would notice a change in "management."
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