Everyone knows somebody who has a website (or has his own) these days and they all need to be hosted. That's the reason that so many people think providing web hosting is a sound business idea. It may be, but you will need to know what you're doing before jumping in. After all, there are a lot of people doing exactly the same thing. Here is how you can start your own web hosting company. The only requirement is that you have your own domain name and website.
Before you even think about web hosting options, think about your new web hosting company as a business. Like any new business you will need a business plan. Even if you intend to fund the business yourself a business plan will help you develop your business in the right way and will help to keep you on track. It will help you to think about all the areas that are important for your web hosting business and will provide a road map for the development of your web hosting company.
Research Your Target Market :
You will need to start with some market research. As part of your market research find out what products and services other web hosting companies are offering and how they are marketing themselves. Discover what market segment you should target and what your costs are likely to be. This will give you some ideas for how you can make your company different. Sign up for web hosting forums and seeing what people are most concerned about and what other web hosts are discussing. This will give you advance warning of future opportunities and may help you to decide where to position your web hosting business.
In thinking about starting your own web hosting company, there is one major decision that you have to make. Are you going to do it yourself or become a web hosting reseller? There are advantages and disadvantages to each option.
Do It Yourself Web Hosting :
The DIY approach has the highest initial outlay, but all the profit is your own. If you are going to run all aspects of the hosting company yourself you will need a server on which to host others' websites. Your options for getting a server are to buy one or to lease one. Buying a server may seem like a good idea, especially since computers are no longer that expensive, but a good, reliable server is not cheap and don't forget you will need the latest technology and software for Windows or Linux hosting.
You will need to be realistic about how many websites you can actually host on your server. Overestimate this and you could be heading for a tech support nightmare - which you may have to handle all by yourself. You will also need to think about bandwidth, which means you need to get a company to provide that to you so that you can resell it to your customers.
An alternative to buying your own server is to lease a server (from a company such as Dell or Gateway) or dedicated server (from a company such as Rackspace.com or Cyberworldservers.com) and then resell the bandwidth to your customers. This saves you the up front cost of buying your own server, but it means you are not in control if there is a crash. When choosing a company to provide a server, look for one that has good customer support and as little downtime as possible. Servers do crash sometimes and you will need to be back up quickly so you don't lose customers.
Other costs that you will have to take into account are the costs of getting a control panel for managing the websites and the cost of technical support. All of these can add up if you are running a one person operation - and you will be working all day and all night, too, because most people expect 24 hour support from their web hosting company. So this is an important decision to make.
If you don't think you can be available all day every day you may need to consider taking on an employee or employees. This will make it easier for you to manage your own time but will make the cost of doing business add up. The employee will have to be paid even if you have had a slow month. However, it may be worth it so you don't have to do all the technical support yourself. Unless you employ a couple of people, you will still be working long days.
There are a couple more options for providing technical support. One is to include help desk software to manage support tickets or to set up a forum where your customers can help each other. A forum requires a low outlay and may run itself after awhile. You could also offer live chat to support your customers, though that may take time. Finally, you could outsource your technical support to a company which specializes in this area. It will add to your monthly costs, but could save you a fortune if your customers are kept happy.
Reseller Web Hosting
Another option for starting your own web hosting company is to act as a reseller for another host. This has several advantages, most of them to do with the time you save. Acting as a reseller requires a relatively low investment, with only the monthly reseller fee to pay. If you already have a couple of sites yourself, switching them to your reseller package could be cost effective. You do not have to worry about technical support, server size or bandwidth. All you have to do is promote and sell the web hosting package. Of course, this has its own challenges.
Some reseller accounts are anonymous, which means that you can brand your web hosting business as you like. Others require you to use the branding of the main host. With some reseller accounts everything is taken care of, which means that billing and any follow up are all the responsibility of the main web host. However, other resellers may require you to do your own billing so if you choose one of these you will need to think about how to handle that. This is the backend of your web hosting company and it is just as important as the front end.
Billing For Your Hosting Company :
Most web hosting companies offer a choice of monthly or annual billing, and may offer a discount or incentive for the annual package. You need to think about options for taking money. Your choices are an online payments processor such as Paypal or setting up a merchant account so you can accept credit card payments directly. You may also accept money through the mail but this could be unnecessarily complicated, so it may be best to avoid this. An online payments processor is flexible and allows you to accept a variety of payment forms. In addition, it can handle automatic billing. If you are accepting payments online you will also need an SSL certificate so that your customers' sensitive information can be encrypted during online transactions.
Once you have been paid you will need to set up the client's account through a Web Host Manager. There are several pieces of software that automate the process of collecting money and setting up the account, which means less work for you and instant gratification for your customers. Remember to keep a copy of your records offline for additional security. Include the customer's name, plan, price and billing date, as well as the domain name, email address, and subscription identification number.
Marketing Your Web Hosting Company :
To make your web hosting company successful you need to stand out from the thousands of other web hosting companies out there. This isn't easy. Compete on price and you could find that you are not making any money which is why many web hosting companies close as quickly as they open. Instead of playing this game, be smart about how you promote your business.
The best way to have a successful web hosting business is to get good word of mouth from your customers. So to start with you need to get some customers. You can offer free or discounted trial packages to get people through the virtual door. Once they're signed up treat them like members of your family (or even better) so that they get a wonderful service that they will brag about.
At the same time, pay some attention to advertising and marketing so you can attract more customers. Options to consider include Google Adwords, which works well for some people, submitting your site to search engines, after optimizing your home page for your target keywords and using article marketing. You can also try to get some buzz going by paying for blog posts. All of this will be a cost to be taken into account.
By now you will have realized that starting a web hosting company takes a lot of research and can be hard work. And the money is far from easy. If you do it all yourself, your startup costs include hardware and software, and you may have to add technical support to that. Even if you decide to go the reseller route, you will have to devote time and money to marketing your offering. But if you get the marketing right, the customers will come and you should succeed in having a thriving web hosting company
Before you even think about web hosting options, think about your new web hosting company as a business. Like any new business you will need a business plan. Even if you intend to fund the business yourself a business plan will help you develop your business in the right way and will help to keep you on track. It will help you to think about all the areas that are important for your web hosting business and will provide a road map for the development of your web hosting company.
Research Your Target Market :
You will need to start with some market research. As part of your market research find out what products and services other web hosting companies are offering and how they are marketing themselves. Discover what market segment you should target and what your costs are likely to be. This will give you some ideas for how you can make your company different. Sign up for web hosting forums and seeing what people are most concerned about and what other web hosts are discussing. This will give you advance warning of future opportunities and may help you to decide where to position your web hosting business.
In thinking about starting your own web hosting company, there is one major decision that you have to make. Are you going to do it yourself or become a web hosting reseller? There are advantages and disadvantages to each option.
Do It Yourself Web Hosting :
The DIY approach has the highest initial outlay, but all the profit is your own. If you are going to run all aspects of the hosting company yourself you will need a server on which to host others' websites. Your options for getting a server are to buy one or to lease one. Buying a server may seem like a good idea, especially since computers are no longer that expensive, but a good, reliable server is not cheap and don't forget you will need the latest technology and software for Windows or Linux hosting.
You will need to be realistic about how many websites you can actually host on your server. Overestimate this and you could be heading for a tech support nightmare - which you may have to handle all by yourself. You will also need to think about bandwidth, which means you need to get a company to provide that to you so that you can resell it to your customers.
An alternative to buying your own server is to lease a server (from a company such as Dell or Gateway) or dedicated server (from a company such as Rackspace.com or Cyberworldservers.com) and then resell the bandwidth to your customers. This saves you the up front cost of buying your own server, but it means you are not in control if there is a crash. When choosing a company to provide a server, look for one that has good customer support and as little downtime as possible. Servers do crash sometimes and you will need to be back up quickly so you don't lose customers.
Other costs that you will have to take into account are the costs of getting a control panel for managing the websites and the cost of technical support. All of these can add up if you are running a one person operation - and you will be working all day and all night, too, because most people expect 24 hour support from their web hosting company. So this is an important decision to make.
If you don't think you can be available all day every day you may need to consider taking on an employee or employees. This will make it easier for you to manage your own time but will make the cost of doing business add up. The employee will have to be paid even if you have had a slow month. However, it may be worth it so you don't have to do all the technical support yourself. Unless you employ a couple of people, you will still be working long days.
There are a couple more options for providing technical support. One is to include help desk software to manage support tickets or to set up a forum where your customers can help each other. A forum requires a low outlay and may run itself after awhile. You could also offer live chat to support your customers, though that may take time. Finally, you could outsource your technical support to a company which specializes in this area. It will add to your monthly costs, but could save you a fortune if your customers are kept happy.
Reseller Web Hosting
Another option for starting your own web hosting company is to act as a reseller for another host. This has several advantages, most of them to do with the time you save. Acting as a reseller requires a relatively low investment, with only the monthly reseller fee to pay. If you already have a couple of sites yourself, switching them to your reseller package could be cost effective. You do not have to worry about technical support, server size or bandwidth. All you have to do is promote and sell the web hosting package. Of course, this has its own challenges.
Some reseller accounts are anonymous, which means that you can brand your web hosting business as you like. Others require you to use the branding of the main host. With some reseller accounts everything is taken care of, which means that billing and any follow up are all the responsibility of the main web host. However, other resellers may require you to do your own billing so if you choose one of these you will need to think about how to handle that. This is the backend of your web hosting company and it is just as important as the front end.
Billing For Your Hosting Company :
Most web hosting companies offer a choice of monthly or annual billing, and may offer a discount or incentive for the annual package. You need to think about options for taking money. Your choices are an online payments processor such as Paypal or setting up a merchant account so you can accept credit card payments directly. You may also accept money through the mail but this could be unnecessarily complicated, so it may be best to avoid this. An online payments processor is flexible and allows you to accept a variety of payment forms. In addition, it can handle automatic billing. If you are accepting payments online you will also need an SSL certificate so that your customers' sensitive information can be encrypted during online transactions.
Once you have been paid you will need to set up the client's account through a Web Host Manager. There are several pieces of software that automate the process of collecting money and setting up the account, which means less work for you and instant gratification for your customers. Remember to keep a copy of your records offline for additional security. Include the customer's name, plan, price and billing date, as well as the domain name, email address, and subscription identification number.
Marketing Your Web Hosting Company :
To make your web hosting company successful you need to stand out from the thousands of other web hosting companies out there. This isn't easy. Compete on price and you could find that you are not making any money which is why many web hosting companies close as quickly as they open. Instead of playing this game, be smart about how you promote your business.
The best way to have a successful web hosting business is to get good word of mouth from your customers. So to start with you need to get some customers. You can offer free or discounted trial packages to get people through the virtual door. Once they're signed up treat them like members of your family (or even better) so that they get a wonderful service that they will brag about.
At the same time, pay some attention to advertising and marketing so you can attract more customers. Options to consider include Google Adwords, which works well for some people, submitting your site to search engines, after optimizing your home page for your target keywords and using article marketing. You can also try to get some buzz going by paying for blog posts. All of this will be a cost to be taken into account.
By now you will have realized that starting a web hosting company takes a lot of research and can be hard work. And the money is far from easy. If you do it all yourself, your startup costs include hardware and software, and you may have to add technical support to that. Even if you decide to go the reseller route, you will have to devote time and money to marketing your offering. But if you get the marketing right, the customers will come and you should succeed in having a thriving web hosting company
