How I built a successful web hosting company with little money.

How I built a successful web hosting company with little money.


I would like to pay forward and share the steps I took on building a successful web hosting company with little money.

In 2008, I started with a reseller account. I was building websites for clients and also selling turnkey websites on eBay resulting in most of them asking that I host their websites paying me $5 - $10 a month. The core of my business was at that time, creating and selling websites and did not pay too much attention about the hosting business.

As time went on I realized I was earning more from hosting then with the creation of websites, it was then I realized that hosting was what I wanted to do. From there I registered with WHT and began posting and contributing what I knew in regards to web scripting. I started to get more clients and found the need to migrate the reseller account in to a dedicated server. I remember I thought in my mind that $300/month (the cost of the server) was so much money and was abit nervous. Needless to say growth continued and the server got filled up within several months which a few months before I was not even sure if it would get fully used.

Even today with many servers, tens of thousands of accounts, the primary source of new business are the forums and referrals. Ive experimented with paid advertising but I did not get much in return from it.

1. Forum post
2. Be there for your client
3. Keep servers stable.

Although it's tedious as you always have something to do, it's not rocket science. As time progresses growth will be organic.

 

I just saw this on WHT

 

Good eye I wrote it on wht, then I thought to also share it on dp. I hope it helps someone whos getting in to the business.

 

Forum posting is my fav way to get traffic and customers. Kudos to you!

 

Can I ask you some serious questions about how you manage that business?

Would you mind? For my own personal growth, that is it, I am not making a movie, website or book,

I just struggle with some things in business and would love some feedback,

 

Like as you said, "Be there for your clients" is the most important SEO trick that people ignore and that is the difference between you and the others. Kudos Man

 

Sure, please tell me some of the challenges you are facing so I can give feedback on what I would so in a similar situation.

 

I hope you will become the next hostgator or fatcow. I tried reseller's hosting providers in the past and it never worked well for me. The customer support always sucked. And no sufficient tech support was given.

You look like a different beast altogether. Great job!

 

Yeah I saw it on WHT, I wouldn't expect too many secrets to be shared but any further info would be nice, like how long it took for growth to get to certain levels, how much forum posting you did etc, customer retention

 

Thank you. Don't give up on reselling hosting because of your provider. Did you know Brent Oxley, the founder of HostGator failed with his first hosting company? HostGator was his second try.

 

I have just over 1000 posts on wht over 6 years, one thing I did notice was after around 200 posts in the first year I stated being recognized, also organic traffic on my website were increasing. I have much fewer posts on dp, probably because I know the links are no follow.

One thing I do that helps with attrition is that I email clients that are no longer with us a promo to return to us. This brings many back to us. Its true that the more customers you have, the more you lose but your database also increases to invite them back.

 

Thanks, I will ask, one thing at a time to make it easy for me and everyone , so we can learn


How do you deal with all the emails in one day? Customer service, compliments , etc.

How many hours a day do you honestly work a day?

Do you have staff? If so, how many help full time.

Do you scream at your wife when things go wrong and if so, how have you worked that out? If you do not have a wife, skip this one.....LOL

What is your charge-back % and how do you deal with chargbacks and configure them into your yearly loss with your accountant?

Are you structured as an individual or a company?

Do you have all your severs on one host or multiple?

Do you use just one merchant services account or a few?

Has your money ever been frozen by a merchant services company and how did you deal with that?

Thanks in advance

Joseph

 

Yeah the thing is, hosting is basically patience.

Blog post, forum post, create content good trailing keyword pages etc etc and keep working on your clients, as you have been around longer it grows and grows and grows, hosting is patience IMO, I have been around the industry a long time, and I can say this is what it is about, patience, which can suck if people have non! LOL

 

How do you deal with all the emails in one day? Customer service, compliments , etc. -----> We don't get many emails, lets say around 5-10. Most of them are all minor issues that take less then 5 minutes to resolve

How many hours a day do you honestly work a day? -----> All day if i can! The more you put in the more you put out. We don't pay for advertising or marketing. There isnt alot of ROI. So I like to spend as along as possible searching for leads and opportunities to attract new customers and improving the website/client panel

Do you have staff? If so, how many help full time. -----> No, but we're looking for some!

Do you scream at your wife when things go wrong and if so, how have you worked that out? If you do not have a wife, skip this one.....LOL -----> Keep your work at work, and your home at home

What is your charge-back % and how do you deal with chargbacks and configure them into your yearly loss with your accountant? -----> 0%

Are you structured as an individual or a company? ------> at the moment, individual, but by mid 2014 we I hope to be company structured

Do you have all your severs on one host or multiple? -----> We have our servers in one datacentre

Do you use just one merchant services account or a few? -----> Only 2 for now

Has your money ever been frozen by a merchant services company and how did you deal with that? ------> Never

Thanks in advance -----> Youre welcome

Joseph, if youre looking to start out, try a reseller. Theyre cheap to run and will allow you to generate some profits so you can then upgrade to a VPS or Dedicated server when youre ready

 

Thanks for all of those answers......

 

Business is business, but you need to consider your costs and your time that you put in your business. I made $277,000+ in net profits from my online business and I invest 5/6 hours per day. Your time is VERY IMPORTANT

 

It's great to hear of your progression. And i'm sure it will inspire more web hosts to be serious about the services they provide. Good read

 

Thanks so much

 

And that my friend is why there is such a constant movement in the hosting business. It is something quite cheap to start (thus many people entering) and it requires a lot and lot of patience. The thing with hosting is that you cannot expect quick bucks, most hosts operate on super cheap promo deals for starters and the real revenue is made after year 1-2, come renewal time. There is a reason why more experienced hosts refer to the younglings as "kiddie hosts" and its certainly not in spite - its just that the young blood crave more movement, more results, more excitements (I know I did in the beginning ). So failing to see those quick results makes them bail and jump ship. This in term leaves them out of the big game before it even started.

Understanding the concepts and having the patience to follow your path has another benefit - knowing you are not hurry is a great opportunity to focus on every minor detail, put more time into an appealing website filled with great and useful content, researching and testing various Marketing and SEO methodology etc. Its like a game in Training mode - this is the time to learn a thing or two, because once the real game starts, believe me, you will have much on your plate and you better be prepared