How to Start and Run a Hosting Business - Part 1
Posted on January 9, 2008 by
Adie 
Web Development, Websites for Sale 
10 Comments
This is just something I always wanted to do because I have a keen interest in Hosting and Servers etc…(geeky I know)
I did give this a start when I was very naive and new to the net I was quickly put off by so many forums stating there is to much competition out there. I still have my domain name and I had gotten used the billing software and even had fraud protection on orders in place from a third party company.
I think although the Market is saturated you can still compete on a smaller level as I 100% believe that 90% of hosting is Customer Service. Some of you who are already hosts may put me right on some pitfalls to watch for, it seems so many new money makers to the net want to jump into this business as they think it might be simple. Like any business it is hard work and I have been burnt by both hosting companies that have gone under and even domain registrars like RegisterFly which famously went under.
Even if you want to start from your home office or bedroom it can be done if you have the correct structure in place. You cannot expect to just get a reseller account and hope for the best!
I believe many newcomers see this as a great starter money maker because other Web Hosts offer unbelievable packages to Resell their Reseller package that you will then sell on. (makes me laugh)
I’m going to do it the Correct way and the way that you should too, if you want to Set-Up a Web Hosting Company and are serious about making it a success.
One thing you must identify is your best skills, mine are branding, organisation, marketing and customer service. I do understand scripts and some code and basic HTML but that’s about it. So with knowing this I’m going to have to get a small team together for the future of this new Hosting Company otherwise It will not run smoothly and I will lose all customers and my reputation. This is probably what happens to 1 in 3 start up hosts…
On that point…although huge saturation remember only a handfull actually offer outstanding support and this is Your MOST IMPORTANT responsibility. Sure, uptime has to be good but if a customer cannot get hold of you 24/7 in this industry you’re a gonna!
So to summarise -
- Be amazing at customer service
- Get an easy to use and customisable billing software
- Offer your customer the best service you can without comprimising on price
- Have a good support team in mind or (one person when starting out)
- Research and look for a great sales team (one person again at start)
- Get the most reliable Server in a fantastic data center (to support you when your Hosting Business grows)
- Get a unique design and do not use a template. Tons of other start up hosts will be doing this and you need to stand out (I’ve seen loads I would not touch that look like this)
- Make it easy to purchase your packages
I know a UK host who outsources the whole business and this makes me un-easy as I think he’s using ThirdWorld services. Please note, you have to make 100% sure these guys know their servers and technical information otherwise you’ll be sinking under so quickly.
At first, outsource to one or two key areas of the business and maybe you can take care of sales/customer service billing etc…If your skill is server based then employ a good person to do all sales/support, this shouldn’t be hard to do. In either case it can be done, finding the right people is the hardest part.
In the next parts we will be looking at:
- Server
- Software
- Design
- Brand name
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I used to run small hosting business..it is nice passive income business model but too much time consuming to support and hate these spammers, hackers.
Absolutely loving these case studies Aide, can’t wait for the next part
Glad you are enjoying them, as I enjoy doing them.
Hey Adie,
You mention in your article that you’re good at, and going to do the branding, organisation, marketing and customer service.
That’s a huge set of tasks and responsibilities mate. Isn’t the internet dream, and also the actual description of the business owner to own the thing and not work IN it?
Maybe another good addition for your series: how to outsource everything and free yourself from your business. (I’ve been blogging about it a few times myself)
-Dave
Interesting article. I recently went through a hosting nightmare with one of my hosts, a small outfit that I bought hosting from some months ago. That whole experience led me to start a blog about the experiences that webmasters go through, including hosting stories. The one thing I now look for when looking for hosting is whether the company has a user forum for its clients and interested parties. I think every hosting company should, because then you create the opportunity for peer support, and also you can get a really good idea of what your clients are thinking, and what they need.
Good luck.
I don’t get it Adie. You are in the middle of setting up a forum and now you’re trying to start a hosting business? Aren’t you trying to do a little to much to fast?
Simple answer to this - Outsourcing!
“I know a UK host who outsources the whole business and this makes me un-easy as I think he’s using ThirdWorld services. Please note, you have to make 100% sure these guys know their servers and technical information otherwise you’ll be sinking under so quickly.”
Third world doesn’t mean third class…
I stand corrected and think I should have re-worded that statement. I would be wary of any third party looking after my company regardless of where they are based.