How To Start a Web Hosting Business

When starting out in the web hosting business arena, or any business for that matter, there are a few important points you need to consider. Starting a web hosting business is fairly easy, but to survive and succeed is a big challenge, thanks to the competition that just continues to grow day by day.

By fairly easy, we meant that you could start out as a brand new player in the web hosting business in a matter of mere minutes, and the initial investment required is next to nothing. But if you want to stay ahead in the game, it will take some work. You will have to address the increasing demands of your prospects and customers. This could cost you time, money and effort. The business of web hosting today has become fiercely competitive – low prices, high quality timely support and customer-centricity are the major factors that have helped the big players stand where they are today. All this, after years of hard work; and to address these issues and stay profitable in the web hosting business is a very difficult task. So, let’s set the facts straight at this stage – if you want to start a web hosting business, first think long term and second, be ready to give it your all.

When starting a web hosting business, you should start off as a reseller hosting company. What that means is that you would buy some server space and bandwidth from an established hosting company, which owns data centers (or server storage centers); and you’d be getting permission from them to sell the given space and bandwidth (along with other features) to a set number of people for a price you wish to charge.

Let’s look at an example. Let us assume that ‘i123Web’ is an established web hosting services provider (with their own fully-managed data centers), and ‘YourHostingCo’ is the name of your new web hosting business.

You would approach i123Web and buy 10GB server disk space with a total bandwidth of around 100GB (per month), all other features like e-mail addresses, add-on domains, sub domains, MySQL databases and such remaining unlimited.

Now, i123Web could impose a limit on you saying you can sell only 10 accounts (with 1GB disk space and 10GB bandwidth each), or there could be no such limit.

Also, i123Web would give you a suggested price to sell the hosting services at, but that’s completely up to you to decide how much you want to charge your customers.

So, what you’ve just done is purchased some infrastructure on i123Web’s data centers and you’re ready to take your web hosting business to the marketplace and make an offering to acquire customers.

One important thing to note at this stage is that once you start a reseller web hosting business, the business becomes completely branded by you. While you could always communicate to your prospects that your servers are powerful and are managed by an established company like i123Web, you cannot use their name for extensive branding. In other words, you’re on your own – yes, even for the support. You will need to spend a lot of time yourself offering technical support (apart from billing support and sales support / customer support) to your customers; and they could have technical issues at any time. It’s highly unlikely that you’ll be able to manage it all alone, especially when your business kicks off really well. In that case, you might need to hire a few qualified and experienced support technicians or outsource it to a specialist online. This will mean more costs, and you’ll need to work out your profit margins and make some tweaks in the pricing of your hosting plans.

Once you’re ready to tackle these difficult aspects of a web hosting business (remember we gave you a hint above – it’s not that easy. But if you plan well and stick to it for long, you’ll taste success), here are some other things to consider:

To bring in more business, you need to start promoting/marketing your web hosting business and your website. Here are a few starters’ tips for the same:

– Build a neat, attractive looking, website with a user-friendly interface.

– Offer what your competition doesn’t offer. Of course, offer all of what your competitors do, but walk an extra mile – that will be your USP (Unique Selling Proposition). For example, top notch technical support around the clock (ticket response within 15 minutes).

– Spread the Word – Tell your friends and ask them to pass on the message to their friends. But, never SPAM. Your web hosting business might even get de-licensed, depending on the severity of the SPAM activity.

– Advertise – There are a lot of options like Google AdWords, banner advertisements on relevant websites, and making special offers on web hosting related forums.

This business is not easy, but can be very financially rewarding if you treat it like what it is – a business. Once you’ve taken care of these basic issues, you should see some business flowing in soon. From there onwards, it’s about taking your new web hosting business to the next level.