That is very dependent on whether the business is being run as “milking the 
cash cow” or “reinvesting to grow the business”.  Especially since section 179 
allows a lot of capital purchases to be expensed in the first year.

 

I suspect many WISP owners prefer to add staff and equipment and towers and 
customers, rather than declare profits and pay taxes.  That doesn’t mean their 
businesses are worth less to a buyer.  Back when I worked for corporate 
America, I remember around 1990 working for a public high tech company and at 
stockholder meetings the CEO would be asked why the company at every earnings 
statement would just break even or a little more.  He would answer they were in 
business to grow, not to pay taxes.

 

I am sometimes puzzled by competitors who seem to have crappy service, are 
hated by their customers, and have high churn.  Then I realize they are milking 
the cash cow, spending as little as possible, and probably making as much or 
more profit as I am.  In the case of big, crappy companies, they probably don’t 
sweat the churn because there are millions more suckers out there, you just 
need advertising to rope some of them in to replace the cancellations.  Like 
when asked about Frontier, I describe them as the slum landlord of phone 
companies.

 

 

From: AF <af-boun...@af.afmug.com> On Behalf Of Chuck McCown
Sent: Saturday, August 22, 2020 10:02 AM
To: AnimalFarm Microwave Users Group <af@af.afmug.com>
Subject: Re: [AFMUG] Buying and selling ISP’s

 

Whatever 5x your earnings are.  Not sales or revenue or gross profit but bottom 
line earnings on your income statement/ pl. Your taxable income.

Sent from my iPhone





On Aug 22, 2020, at 8:16 AM, Mike Hammett <af...@ics-il.net 
<mailto:af...@ics-il.net> > wrote:



What does the revenue multiplier end up being, though?

5x EBIDTA / revenue gets you what, in purchases that have been made?



-----
Mike Hammett
 <http://www.ics-il.com/> Intelligent Computing Solutions
 <https://www.facebook.com/ICSIL>  
<https://plus.google.com/+IntelligentComputingSolutionsDeKalb>  
<https://www.linkedin.com/company/intelligent-computing-solutions>  
<https://twitter.com/ICSIL> 
 <http://www.midwest-ix.com/> Midwest Internet Exchange
 <https://www.facebook.com/mdwestix>  
<https://www.linkedin.com/company/midwest-internet-exchange>  
<https://twitter.com/mdwestix> 
 <http://www.thebrotherswisp.com/> The Brothers WISP
 <https://www.facebook.com/thebrotherswisp>  
<https://www.youtube.com/channel/UCXSdfxQv7SpoRQYNyLwntZg> 





  _____  


From: "Chuck McCown" <ch...@wbmfg.com <mailto:ch...@wbmfg.com> >
To: "AnimalFarm Microwave Users Group" <af@af.afmug.com 
<mailto:af@af.afmug.com> >
Sent: Friday, August 21, 2020 8:20:47 PM
Subject: Re: [AFMUG] Buying and selling ISP’s

5 x ebidta

Revenue multiples are of no value.

Sent from my iPhone

 

On Aug 21, 2020, at 5:30 PM, cjwstudios <cjwstud...@gmail.com 
<mailto:cjwstud...@gmail.com> > wrote:



1x annual revenue and hope the customers stay on

 

On Fri, Aug 21, 2020 at 5:43 PM Matt Hoppes <mattli...@rivervalleyinternet.net 
<mailto:mattli...@rivervalleyinternet.net> > wrote:

This is the issue I’ve always had when I’ve looked at buying an ISP. It always 
seems like a lot more money I would have to put out to buy then I could just 
build and take the customers if something is wrong with the current network.



> On Aug 21, 2020, at 12:43 PM, Seth Mattinen <se...@rollernet.us 
> <mailto:se...@rollernet.us> > wrote:

> 

> On 8/20/20 8:13 PM, Steve Jones wrote:

>> I think you either buy or sell, isp isnt really a flip thing

> 

> 

> There is/was someone in my part of the country buying up ISPs and trying to 
> package them all together as a flip. My ISP customers tell me it's far easier 
> to get the flipper's customers to cancel and switch than buy their company.

> 

> -- 

> AF mailing list

> AF@af.afmug.com <mailto:AF@af.afmug.com> 

> http://af.afmug.com/mailman/listinfo/af_af.afmug.com



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