Starting a Web Hosting Business, part 1

Running a web hosting business can be a very profitable and
successful business, but it is not a get-rich-quick scheme. You will need to
devote a lot of time into your business to make it successful. In this part 1 of
Starting a Web Hosting Business, we will cover your business plan, in
which you will lay out the different aspects of your business.

You will need to know how you will be hosting your clients.
I recommend starting out with either a reseller plan or VPS, and as you grow,
eventually move up to a dedicated server. One limitation of a reseller plan is
that you cannot sell reseller accounts. You need root access to the server to
do that, which requires a VPS (virtual private server) or a dedicated server. For
most hosting startups, a $20-30 a month reseller plan is fine to start. If you
want to sell reseller plans, you can get a VPS starting at about $40-50 a
month. There are many different providers out there, I recommend using Google
to find hosts and then looking for reviews on them at WebHostingTalk.com.

Now, I am going to compare reseller plans, VPS, and
dedicated servers.

Reseller plan:

A reseller plan is the cheapest way to start your hosting
business, but with the most limitations. If you don’t have much money to
invest, I’d recommend getting a reseller plan from a reputable provider. Don’t
go with the company with provides the most for the lowest price, because they
are simply overselling and crowding their servers, and you will pay for it in
overall performance.

VPS:

VPS is an abbreviation for virtual private server.
Usually, a reseller plan is more cost effective, but a VPS gives you more
freedom. You can install your own software on it, and other users can’t slow
down the performance. One strong advantage is that you can sell reseller plans
to your customers.

Dedicated server:

A dedicated server is the most cost effective (what you
get vs. what you pay for,) and offers the most flexibility, but
costs the most. You also need to consider management costs if you cannot manage
it yourself. You can sell reseller plans, which is another big advantage, as
well. Pricing starts at about $150 for a server that is suitable for hosting
websites. You can get servers for less, but I wouldn’t recommend them for
hosting websites, as they aren’t powerful enough. Dedicated servers aren’t
always the best for start-ups, unless you have some money to invest.

Choosing how you will be hosting your clients is an
important step that I recommend looking carefully at.

Once you know how you will be hosting your clients, you will
need to look at support. Are you going to be running it by yourself, running it
with a partner, with employees, or are you going to outsource?style="mso-spacerun: yes"> If you are running it all by yourself, you
will need to dedicate a lot of time into answering your support tickets, which
can very time consuming. If you have a partner, you can both answer support
tickets, which results in faster result times for your clients. You could also
hire employees to deal with sales and support tickets, but you will need to
have the money to hire. Another popular solution is to outsource your support.
There are companies that you can pay per-ticket, per-client, or per-server.
This is popular for growing companies who don’t have the money to hire their
own employees.

Now, we’re going to look at customer management. There are
quite a few programs out there that can be used to accomplish this. You want to
find a program that handles customer signup and billing. Three of the popular
ones are ClientExec, ModernBill, and WHMAutoPilot. These are scripts that you
install and run off of your server. None of these are free, but there are
different ways you can pay for them. You can buy an owned license, where you
pay for it all at once, or a leased license, where you pay for it monthly.

That wraps up part 1 of Starting a Web Hosting Business.
In part 2, we will cover advertising and marketing your new company.

About the Author

Dave Summits writes aricles for Web Hosting Insider and runs a daily updated hosting blog, Hosting Insider.