Merging companies and bad billing

shockym

shockym

New member
We have been thinking of purchasing up some smaller companies out there but I fully dread having to go through someone else's billing to make sure I am not buying into something that would take an adutor to organize. Has anyone had to deal with this before?
 
You wouldn't necessarily go into their billing system right away. You need a review sheet of costs and profits. The person selling the hosting company to you will provide you with the breakdown on active clients, outstanding invoices, monthly recurring costs and income etc.

When buying another company there's no real way to get a feel for them without exposing the books 100% so you know exactly what you are buying. Failure to do this is shooting in the dark. In the interest of full disclosure, you have to have accurate books reviewed by accountant, business partners and a lawyer to be sure you're getting what you want.

Smaller companies, maybe not so much, but you still need to get in there and see exactly what is going on.
 
I have already had one bad experience doing this (from a "friend" who we took over his clients) and by the time we got to the books (what was barely there) ended up being the biggest headache you could imagine.

I just wondered if others had some pointers to keep in mind for the next time it rolls around.
 
Usually when we purchase other companies, we have a lump sum that we pay the company that we purchase, and then when we assume their clients, they continue with the existing companies pricing plans etc until a specified time in which they either merge into our business for more value services, or they seek other hosting. Eventually (usually within a 1 year period) all clients are either moved over to OUR plans, or we no longer provide hosting services to them. Aquiring new clients through this manner can be good and bad, but for the most part, it's good for both the customer & the business.

It's definitely a headache trying to get everything squared away, and depending on the size of the business you purchase it can leave a big hole in your pocket. You're purchasing a company "gambling" that they will continue to stay with you.

The days of buying a hosting company for 5 years worth of their value are long gone. Even getting 12 months revenue for a sale is a tough thing to do these days. Most times I'm seeing companies sold for 6 months revenue. Sometimes even less.
 
My problem with not completely examining everything as soon as possible would be that you'd not know whether you were actually getting the profitable entity you thought you would. Whilst it might be a nightmare I think you owe it to yourself to put yourself through the nightmare.
 
You can't merge 2whmcs or 2clientexecs into one ;)
You will need to keep paying for both licenses and run separate billing.

We bought 3 smaller company's and had tu buy 3 WHMCS licenses.
 
You CAN merge billing softwares - there's just no "off the shelf script". We have taken other billing software and imported the data into the WHMCS. You just need to align the tables right, and with some fancy scripting you CAN import. If you have a few hundred or thousand customers you need to import, have a programmer make a script for you. There's no reason to have double and tripple expenses on billing software. It can also lead to confusion with customers on HOW to do thing based on KB articles or even confusion on the helpdesk staff.

Keeping people on a SINGLE type program is the best method from support and customer use angles.
 
Downside with keeping them separate is that you've now got to market and brand 2 different companies. If the packages are all different sizes, different software, different specs and different billing procedures and methods - it makes for a more complicated support system (from staff angel).

We've always absorbed the purchased companies and migrated their clients into our systems. Less overhead.
 
Yeah, marketing two diffirent companies would be hard; but it could lead to more sales. It depends if you can pull it off.
 
Take a look at some of the other hosting companies out there such as "ipowerweb.com" or "ipower.com".

This is the same company, the same machines that the customers end up on, and the same support staff. Yet, they market the two domains differently and even have different pricing, getting more bang for their buck on some plans versus others.

It's common these days to see hosting companies competing with themselves for the top spot, but as a smaller hosting company, spending the money and effort to market two competing companies is often such a drain that they both lose.
 
Well, I understand what you are saying but there could be other reasons to have two diffirent companies. For instance, I own Fusion-Hosts as you know but I recently bought a small company (which will be named later) and I am thinking about marketing the two. I decided to let the clients keep their packages that they had with their former host while their with me. This way there is no need to switch packages after a pre-set time.

This would give people more a choice when buying one of my services. Someone could either buy a package from the other site, or from FH site.

See where I am going with this? Same servers, same quality support, but more options.
 
It is allot of work linking 2 companies together, what fusion-host is a good idea but it is something I would not do. If I were to buy a hosting company I would want to move all clients to my servers and billing system.
 
All clients have been moved over to my billing system and server, but what I was saying is still leave the other site up and market the two. When I advertise on here I can include both sites packages; this gives more options to choose from.
 
owning 2 companies also allows for the two to pit themselves against eachother package wise, and has been done across many industries in the past to gain more custom from a marketing point of view. however live support can be dificult as it is often branded to a particular company
 
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