How to start a Web Hosting business

Hi,

Many hosting providers starting their business from a simple, reseller account, as it gives a great management tool - WHM control panel, which is very useful to create separate cPanel accounts for your users or customers.
In most cases, while starting a reseller business with a good hosting provider, usually they taking care about infrastructure - hardware & software maintenance, network uptime, backup solutions and so on, so resellers don't need to worry about those things and can be fully concentrated to their sales.
This is kind of great model for business startups in this industry. However, when the business grows, you'd definitely think about expanding your environment so it requires to move up to the next level - first of all upgrade your account to VPS or Dedicated server, I think VPS is most common and good solution for that, as you can get full server control, root access, etc. for much cheaper price then a dedicated one.

Running successful web hosting business directly depends on the quality traffic to your site, as well as on your hosting plans, offers, prices and professional customer support.

Anyone who's interested to start a web hosting business, who already runs one, or who's just curious about what is it a web hosting business please post your thoughts, questions, experiences here.

Cheers!

 

Good tips above! With the competitive nature of web hosting, it's critically important to understand what your USP (unique sales proposition) will be. How will you differentiate yourself from the competition? How will customers know to select your service vs. the countless others? Answer those questions as you run your hosting business, and you should find success.

 

Exactly, it's quite difficult to surprise your clients with the prices, as hosting plans are available from 0.01 on the market, but mostly, cheap doesn't mean a good quality.. So the mission is to start and maintain a great quality products and services, but the most difficult step is to make people trust you, satisfy your customers' needs and be the best business partner they can rely on you.

 

Hey euro-space!
How much startup money do you think is needed to start a hosting Business. Is it possible to start without actually buying the servers, but renting them somewhere?

 

I run Two free web hosting sites going to make one paid one soon

 

Never thought about starting a business like this, I think it would take too much time for my personal lifestyle, but some great info there, I'm sure it will help alot of people. thanks for sharing!

 

I am going into this business, but not quite for the same reasons that everyone else does. Everyone else is going in to make a quick buck, but for me, I feel like I have to do this. The bar is so low, which is my motivation for doing this, to hopefully raise the bar.
Just for example, I know a business that has asked its webdesigner to redo the entire site from joomla into a different cms as the hosting company doesnt have the joomla icon on their instant install option, and the hosting company doesnt know how to install it! Hosting company doesnt even know how to access webmail, or know the settings required so that the business can access mail on their phones! You can see that something is seriously wrong with this situation.

A vast majority of hosts are just kids with reseller accounts (or hosting at home with their parents home computer). In fact there are hosts that are advertised on here (where DP members have signed up) that are right now (as we speak) being negotiated to be sold off from one dodgy person who cant manage it to anyone that has a couple of $$$. The company will be sold off with no regard to the people who rely on the host. There is no skills test, no thought or care to the users privacy, websites or domains, and thats just wrong, I just hope all the DP members at least have backups of their sites as I doubt their sites will be there next week.

For myself, even with 2 years of experience, in hosting websites, and providing free basic web solutions and hosting to others, (and solving issues for other people who run hosting 'companies') I still feel under-ready to start. But ready or not, will be starting in July (starting at the start of the financial year for tax reasons). Cant compete on price, and cant compete with "unlimited" but I am confident that for my target niche that I can provide a quality basic web solution.

 

I used to run one that I ranked fairly high in the search engines, I didnt get a lot of customers, probably due to the shit web design I had, It was a shitty reseller account on hostgators shitty reseller plans, when or if i relaunch the service it will run on a VPS or colocated box.

 

It all depends on how involved you want to be in the delivery of the service.
If you are going to support them VPS is a superb option for reselling.

 

Reseller hosting business is very sensitive business and your success will be totally dependent on the service level you offer. That's why having reliable reseller hosting provider means so much, as your clients are residing actually on your provider's server, so if their server management lacks, you'd be ready for the trouble.
Running a VPS is quite good idea for reseller hosting, though you may need to have some knowledge in Linux f.ex. Other option is to speak with your VPS provider , so they'd provide professional management for your server. Or, you can hire a team for that.

 

Oh i know linux, I just didnt want to bother with it, I did it mostly to learn more about it, but as you say, you should know a lot of server admin stuff to run on a VPS or dedi.

 

Yes, that would be good, but your hosting provider can also help you a lot.

 

For anyone who wants to go into webhosting as a business, just think of this:


Hosting is something that is highly competitive. If you start and aim to compete only on pricing, you are in for a world of hurt.
There is always someone cheaper then you, and everyone, (even people with hostgator reseller accounts) claim to be the best.
For my own company, next year, I will be dropping the cheaper plans, focusing more on tailored business solutions.

@helge, one issue with hostgator, is that the "websitewelcome" tells ALL potential clients that you are a hostgator reseller. Any client can go to your website, and type in :2087 and it shows the server hostname.
many people that buy reseller accounts to go into hosting do not know this. You can go throw the DP ads, and find a dozen hosts using hostgator or other obvious reseller accounts.

On a side note, anyone wanting to offer reseller accounts, need to understand this issue, and the need for a white label hostname that does not point back to the server owner in anyway.

Just as a minor note. I have met alot of people, brought out company's, (bid on dozens I didn't get) and I am telling you now, that most of them would WISH they had earnt just 10cents per hour they had worked, whereas most of them all made a shocking loss.

 

for anyone starting out, I recommend the "web host manager" handbook, its a great resource. Mine is old and outdated... but so many people rely on just reading a couple of quick help guides, rather then reaching out for a solid quality book. There are a few other great books on my shelf, but the WHM book, is by far the best one for people first starting out.

 

Web Hosting business is profitable business if done right. Take it one step at a time and try to understand the business concept as you grow.

 

With a good provider, they'll put private nameservers and rDNS for the reseller, you may also get dedicated IP for your account(s) and whitelabel solution, also, getting VPS or dedicated server often solves this issue completely.

Web hosting is definitely very competitive business and you may not become rich in 2 months. However doing business right and with patience shall bring you the good result. Again, you'll need a knowledge and good hosting partner to succeed.

 

Yeah I 100% agree. But doing business right really does require business skills, or a partner that has these skills. If I was to write a guide on starting a business, or any business for that matter, I would start with the basics such as doing a course on business and or even understanding tax for small business. The company's that tend to start and do well are usually ones that have multiple business partners, that is, someone that is able to run the admin side of the company (tax and sales and so on) would do well to partner up with someone that is a marketing / social media expert as well as partnering up with someone who is an expert at server management.

One piece of advice I can share with those wanting to start a hosting business is this -> have a solid business plan for attracting clients and where practical TEST it out. By this I mean, signup for an affiliate for hosting company's that you respect-> IF you cannot make money as an affiliate for a solid reputable provider that has been around for years, IF you cannot drive sales using your techniques, then you will likely struggle. The difference is promoting an affiliate costs you almost nothing, compared to starting a company, that can cost a fortune each year just to register and comply with tax paperwork.
Running a webhost review sites, with affiliate links is one good approach to practice your methods for bringing quality and interested traffic to your site, it also works as a long term strategy, where if you make alot of money from affiliate commisions, and then decided to register and start your own company, you simply use your existing money making affiliate website to promote your new company.