VPS might not that encourage because some company might not provide huge freedom access on your VPS and do not have private label to sold your share hosting. The best is you getting a reseller hosting plan which is more customize and easy to manager for those who wish to resell share hosting in the market . The price of the reseller might almost the same as VPS .
You can use a VPS or a reseller hosting account to start a shared hosting business. With reseller hosting you will get good amount of space and bandwidth at a very economical price. You may get the same amount of space and bandwidth with VPS but the price might be slightly higher than a VPS. In case of Reseller hosting, you get fixed amount of space and bandwidth but there its no restriction on the RAM, as per your website requirement you can use the RAM to a good extent. I would personally recommend you to start with a reseller hosting package to start your shared hosting business.
Yes it is possible but I won't suggest you to do so, as the quality for your customers can be pretty poor if you don't have control about the dedis the VPS are hosted on to ensure there are always enough resources available. So for all customers I would also suggest to only go with hosting companies that have their own dedicated servers as this way not only the resources will be ensured but also in case of downtime they will be the ones who can handle the problem in the data center.
Yes, that's a perfect place to start with doing shared hosting. You may also start with reseller accounts!