Starting a web hosting company?

WebStar

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Hello,

I was just wondering what kind of starting budget does someone need to have to start a web hosting company ? I mean since there is a lot of competition , do you have to start with a big budget?

Also , is it possible to handle a web hosting company by yourself or you need to have full time employees from the beginning?

Regards,
Mark
 

RDO Servers

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Hello,

I was just wondering what kind of starting budget does someone need to have to start a web hosting company ? I mean since there is a lot of competition , do you have to start with a big budget?

Also , is it possible to handle a web hosting company by yourself or you need to have full time employees from the beginning?

Regards,
Mark
Hello Mark,

Web hosting is a terribly saturated market. However, there is also a ever growing need for web hosting so you can still be successful.

Starting a web hosting company does jot requires a lot of money, but it does require a lot of hard work and dedication! You can start with a reseller account ($10-$30/mo) for selling shared hosting. When you our grow this, you can step up to a VPS or dedicated server. This is how a lot of people get started.

If you want to be able to sell dedicated servers, find a good host that is easy to work with. When you receive a server order, you order the server from your host and turn it over to your customer. (After marking up the price a bit).

Once you have the money and know-how, you can start buying your own hardware and colo'ing it in a major data center. This takes a lot if capital, but really turns up the profits, but also generates some new headaches!

Once you have customers, you also have to provide support. Most customers will expect this 24/7/365. Are you going to provide this by yourself, do you have any friends that can help, or will you outsource your support? Some hosts offer help desk support for their reseller customers. It may be worth the extra money for you to have someone else handle this for you so that you can sleep at night.

If your going to success, you absolutely have to understand:
It's going to take work. A lot if work. You will need to constantly reinvest money into your business to grow and stay competitive. Building your client base will take time. Make sure you can pay all expenses for at least a year without making a profit. Don't try to compete on price. You will never under cut establish hosts, they will keep trucking along while you go out of business. Find your niche or unique angle and go after it. Customers are going to come running to you, you need to go get them.

But
If you develop a good business plan, are willing to do the work, and have quality hosting on a quality network, you will go far.

Best of luck to you!
 

DotNetNerd

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I thought about getting into web hosting business a couple years ago. I got a reseller account and posted some stuff but never really tried too hard. I only had 18 customers when I gave up. My reseller account was with HostGator and I kept having issue with them and just threw in the towel.
 

LuxVM

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Hello,

I was just wondering what kind of starting budget does someone need to have to start a web hosting company ? I mean since there is a lot of competition , do you have to start with a big budget?

Also , is it possible to handle a web hosting company by yourself or you need to have full time employees from the beginning?

Regards,
Mark

Hello,

I will have to agree with RDO Servers it is a saturated market and can be a lot of work, you will have slow times and you will have really good times. But almost everyday someone opens up a new host gives it a try then closes there doors. You need to be prepared for that and be prepared to not have income for the first few months maybe longer as not many people trust new host's nowadays. But if you keep at it and provide great support and a great service your customers will stay and most of the time tell there friends and you will grow in some occasions.

As for starting budget you wouldnt need a big budget as such, just enough budget to cover a reseller account for a good few months, as RDO Servers mention and a lot of hard work and dedication.

You could handle a web hosting company yourself without employees if you do plan to do it full time, i know a friend who did it for years and he is doing well now, he started with a reseller now a few years down the line he has his own racks and RIPE allocation. So anything is possible :).

You could try find a company who would do white label and resell what they sell with your prices on top, that would be close to zero startup budget. You would just need a Website and billing/support system to manage your clients and the support requests.

I wish you the best in what you plan to do :)

Regards,
Adam
 

WebStar

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Thanks a lot to both of you.

The amount of information provided by both of you is enough to write a detailed book haha

But after going through the posts , I realized that it will take more than just a normal effort to get a successful web hosting company up and running so I will have to skip it for now lol :)

Thanks to both of you again

Regards,
Mark
 

RDO Servers

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Glad we could help. That's what the forum is all about!
;-)
 

moneytech

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we are also planning to launch hosting servers but only for WordPress. and it will target the new users who need site or want to build blog network etc. we are planning to launch with only 2 plans.

1, 1$ monthly

2, still finalizing the addons :)

any suggestion will be great after we are all the end users.
 

lkovnih226

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lkovnih226
What makes you offer $1 monthly when starting a new web hosting company? why don't you offer higher price? what is the benefit of it?
 

moneytech

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moneytech
Some times back when i tried to find out quality hosting for PBN for one of my friend i found out that its not easy to get quality hosting at cheap if we go for shared hosting they will have hidded terms to ban the sites and mainly apply that term when you signup for yearly packs. And also users who want to start new want cheap hosting and we are targetting those clients.

we want to grow together and instead of spending lot of money on ads we will give that benifit to our customers. But it will take some time to finalize all because we want to give quality services to our client inspite of 1$ plan :)
 

RDO Servers

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A lot of cheap ($1/mo) hosts come and go all the time. Giving customers a quality service at a very low price is a great idea, but it is just not sustainable.

For example.
You can start our on a $15/mo reseller account and host 20+ customers at $1/mo. No problems and you will be turning a profit.
But what happens when you grow and need more then a reseller account?

You will have to either:
a) Get a dedicated server with moderate specs, from a budget provider for ~$100/mo. Now this will not have a lot of resources, and may be on a low quality network with multiple single points of failure. Host 200 websites on it and your making a profit, until something breaks and it takes hours or days to get it fixed. (In which time, half of your customers will leave)
b) Get a dedicated server, with a high end specs, from a quality provider for ~$400/mo. Now you will have much more resources, and a much better network. Your server will stay online more, but you will have to pack in 500+ customers on the same server to make a profit.

Now, thats just factoring the price of the server. How many customers are you going to have to pack into that server in order to have a profit, after paying for control panel/software licences, support team, marketing, business licencing/taxes, etc, etc, etc

$1/mo hosting sounds good, but it just isn't sustainable.

Take the time to develop a business plan before jumping in. What will your expenses be? How much do you have to invest in it? How long can you pay the bills without any income? Keep in mind, a lot of customers don't like going with a new company, no matter how low the prices are. Unless you have a major marketing budget, expect to gain 1-5 customers a month during your first year.

Just trying to give you some advice, so that you can succeed.
 

moneytech

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moneytech
We already done working on all the issues you mentioned mate :) and we will do the hosting on quality fully backedup servers and we are not looking for customers or to expand on high speed we are just starting it as a service :)

and its possible to give customer quality hosting on low price. and i will prove it just we need to do it properly every client is important whether they pay 1$ or 100 :)

for an example you listed : E3-1275v3 16GB 2x 500GB SSD at 199$ iam getting same spec at 35$ :)
 

RDO Servers

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RDO Servers
I would love to know where you found that machine for $35/mo....

Even OVH charges $79/mo for a E3-1231 with 16GB ram and HDD's. Keep in mind OVH is well know for cheap servers, but low quality and/or slow support.
The point is, you often get what you pay for. We are not the cheapest and we never claim to be. BUT we have zero single points of failure and provide server with redundant power supply's and dual redundant bonded network uplinks. A E3-1275v3 with 1Gbps uplink will pull more then $35/mo worth of power and bandwidth. That is not even considering the other costs associated with running a successful hosting business.

The difference is quality vs price.

Please don't take offense. I'm simply trying to point out a few things that often get overlooked by those looking to start a new budget friendly hosting service.
 

moneytech

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moneytech
No mate i am not getting offencive nothing there in your post to get offensive. I am just saying it and yes we are getting the server with 99% uptime but we can't disclose the source. And i am not in any way a competitor to you or any one else i am a little fish in the internet sea. I am only launching the hosting service for entry level user need wordpress that's it :)
 

RDO Servers

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Best of luck to you!
 

HostAG

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I would recommend you to start slowly, you rent one dedicated server and you split it in as many VPS as you can.
It will be hard for the first months so you need to have some money saved.
After that you can grow slowly.
 

Tim Dini

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Tim Dini
The biggest challenge you may find will be in the billing and customer support departments. When reselling web hosting services, you will be responsible for all aspects of client billing and customer support issues.

If your client has a server configuration need or a specific script installed, they will contact you, and you in turn will need to contact your provider. You become the ‘middleman' for all support related issues and problems. Same is true with invoicing and payments. Plus, your provider will be billing you, regardless of whether you're able to collect payment from your customers.

This may not be a big challenge at first, but once you are managing dozens or more accounts, the workload can become very challenging.

I was involved in that end of the hosting business a while back, until I decided to switch my focus to web hosting affiliate programs instead. I still perform the sales and marketing aspects of my business, but no longer get involved in any billing or support related concerns. Everything is managed by the provider, and at no charge to me.

I make less profit per customer, but it's been well worth the difference. It's been a load off my mind and allows me to focus more on sales instead of support.
 

ioZoom

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Hello,

I was just wondering what kind of starting budget does someone need to have to start a web hosting company ? I mean since there is a lot of competition , do you have to start with a big budget?

Also , is it possible to handle a web hosting company by yourself or you need to have full time employees from the beginning?

Regards,
Mark
Look into reseller hosting to start and it wouldn't cost much at all. Besides the hosting, get a billing software unless you want to do things manually, and website built obviously. Start off hosting friends and family members and the local community. You wouldn't be able to compete with the big boys without a big budget right off the bat. Stay local.
 

batamwebhosting

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Hello,

I was just wondering what kind of starting budget does someone need to have to start a web hosting company ? I mean since there is a lot of competition , do you have to start with a big budget?

Also , is it possible to handle a web hosting company by yourself or you need to have full time employees from the beginning?

Regards,
Mark
Hi Mark,

For the hosting budget it self price may vary according to your hosting provider $10-20 ish
before you start creating web hosting business you have to know who your target market, how are you going to promote them? and also what makes you different than gazzilion other hosting provider out there...

Don't ever try to compete with bigger hosting provider.. you just can't win the fight.. maybe start by offering service to nearby small office home office, or maybe start with facebook promotion to your friend...

It is possible to run it by yourself.. find a reseller hosting that offer end user support like innohosting.
 

Luxin Host

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@moneytech
for hosting your webhosting company using reseller would be the best option as you will use it only for Wordpress. Good luck.

@WebStar
I know you said you will skip the idea however i think with the right knowledge you can make good profit out of a hosting company. Try reseller if you do not have a large budget or technical knowledge. Reseller means they will take care of everything for you and you just get customers.
 

RDO Servers

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As far as supporting your customers, there are companies that offer outsourced help desk support. You can even find outsourced support plans for reseller accounts.

This way you have a team if tech that will provide "white label" support to your customers 24/7/365 so that you don't have to! In the hosting industry, if you can't provide fast and proficient support, you don't stand a chance!
 
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