Should I Start a Web Hosting Company in a Crowded Market

Spyderhost

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This question is asked all the time along with "is web hosting profitable"? The answer to the first question is only if you have a lot of drive and ambition. 20 years ago you could have started a new hosting company and found customers very easily and made money without much effort. However, 20 years later the market is flooded with web hosting providers of all sizes. The average small web host will honestly come and go within a few months. Why is that? Well to be honest most people who start a web hosting company have no understanding of how it really works and believe it is a get rich overnight business. They completely underestimate the amount of work that is involved building a web hosting business and the money you will need to invest.

So what are some ways you can build a small hosting provider and become profitable. While not everything you need to do this list should help you get started if you really have a strong desire.

  • Branding
Your brand will be everything. Memorable brands abound all over the internet. They are what people think about when they are looking for a particular service. Think of brands like GoDaddy, Hostgator, Amazon and many others. Some of the brand names speak to what they offer while others seem odd choices for the products and services they sell. However, it is all about your ability to create a brand that is memorable. Think the GoDaddy girls and well you get the point.​
  • Website Design
Often this is overlooked and while it is also a part of your brand it is more dedicated to your customers and creating sales. Your webite needs to be easy to get around and laid out easily to encourage sales. Do not make it look childish nor to complicated. Make it easy to find company information as well as promoting your services in a way that makes sense. If you are not a designer you can always use WordPress as your base for your site and buy a hosting theme that is easy to setup from places like ThemeForest.net.​
  • Local Marketing to Gain Customers not Google Ads
One of the biggest mistakes that many new hosting companies make is trying to go head to head with the big boys. Do not I repeat do not do this unless you have deep, deep pockets or plan on going broke really fast. Web hosting keywords on average can cost several dollars or more per click. Large companies have budgets that allow to spend large amounts of money to acquire each new customer. Most of us do not have that. So what do you do to get started and growing? I am sure that you live in an area that has many small businesses. These businesses have websites and many are hosting with large companies based on the ads they see. When you approach them offer a local person who can give them more personal service and a local number if something goes wrong. Most people want someone they know or can trust and that is easily accessible if a problem comes up.​
  • Customer Service
This is something that will be a struggle for most in the beginning. How do you offer 24/7 ticket service to compete with the likes of a Hostnine or Siteground. There are some ways you can accomplish this.​
  1. Find a reseller account that offers end user support - This means they handle tickets while you sleep so you don't have to worry about being awake all day everyday. A search for reseller hosting end user support will help you find a few hosts that provide this service
  2. Outsource your web hosting customer service to a company that specializes in providing ticketing support for web hosts. There are a few that you can find on the web that have excellent records such as Bobcares or Server Sitters.
  3. You could opt to use GoDaddy or Resellerspanel where they provide you with a website or tools to easily build a website. They will than handle all sales, payment processing and provide your customers with 24/7 phone support utilizing a unique id that identifies your company with your customers.
  • Promoting Your Brand Cheap
As you most likely wont be going into this as someone who is already rich you might need to think creatively about how to promote your new web host.​
  1. Join forums related to your business. Read, learn and reply. Do not just start trying to post ads. This is really bad idea because you will be labeled a spammer gain no creditability. I know this first hand as I made that mistake early on back in 2005 on WebHostingTalk. I wanted to be a web hosting owner so bad, but had not idea what the heck I was doing. I got myself banned my first month. After talking to one of the Admins I was given a second chance, but let me tell you this is not the way to do it.
  2. Create a blog on your web hosting site or is separate and links to it. This can be good too if your blog is not on the same IP address as it gives you automatic linkbacks. In addition if your articles are original and of high quality and get high rankings on google you can drive some serious organic and FREE traffic to your website.
  3. Post ads on classified sites and web hosting directories.
  4. Write articles with linkbacks on sites such as Ezinearticles and others.

Summary

There is much more to starting and running a web hosting company, but this might give you an idea. The question is can it be profitable even in a crowded market? The answer is yes if you are willing to put for the work to make it profitable. It is a job and you have to be self-motivated, organized and willing to work more hours than you might have ever worked before.
 

Dopani

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Nice writing...

You should try if you think it is good and you can obtain what you want when join web hosting field. I would suggests you should try to develop a small hosting company first and expand it when you have more customers and don't forget to invest more into marketing to get more potential customers from visitors.
 

S4 Hosting

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Should you start a web hosting company?

It really depends on your motivation for wanting to.

Do you plan on being in it for a long time, competing in a very competitive market, doing something that sets you apart and adds value?

If yes, then absolutely, go for it.

But if not, if your plan is to buy a reseller plan, offer nothing that customers can't get in literally thousands of other places, and rely totally on a nice logo and a race to the bottom on price, for as long as you feel like being around, then No.

This is an industry where people give hosting companies responsibility for taking care of their important and irreplaceable data (everyone should have their own offsite backups but so many don't), and if you don't take that position of trust seriously then it's an industry that you really shouldn't be getting into.
 

myresellerhome

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It all really depends on you. You can start your own Web Hosting service in this crowded market and still stand out and build a strong user base. But things like capital and technical expertise are really necessary to start your own Web Hosting service. That is why we always recommend starting with a reseller hosting plan.
That way, you can easily set up your own hosting service and create a strong user base without any difficulties. All you have to focus on is marketing and building your own customer base. This way, you can gain a lot of technical expertise in the hosting industry and grow steadily.
 

Harry P

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I suppose you should not join this market unless you had already a good team to start and easier grow your business.
 

ZeusCosmos

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Branding and Customer service are the two top priorities. If customer service you can't retain the client in the first place so all other efforts will fail. Its a struggle today to compete with big players but I think if you have the right business model in place its possible to succeed. It may just take a while longer then in the past.
 

Kaz Wolfe

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Starting a web hosting company in a crowded market can be challenging, but it is not impossible. Here are some factors to consider when deciding whether to start a web hosting company:
  1. Market demand: Research the demand for web hosting services in your target market. Consider the number of potential customers, their needs and budget.
  2. Competition: Evaluate the competition in the market, both local and global. Consider what sets you apart from the competition, such as unique features or exceptional customer support.
  3. Business model: Develop a clear business model and revenue plan that sets you apart from your competitors. Consider offering value-added services, such as website design or digital marketing, to increase your revenue streams.
  4. Technical expertise: Ensure that you have the technical expertise to manage and support web hosting services. Consider investing in training or hiring experienced technicians.
  5. Marketing strategy: Develop a comprehensive marketing strategy to reach your target customers and build your brand. Consider online advertising, social media marketing, and partnerships with other businesses.
  6. Capital: Starting a web hosting company requires a significant investment in infrastructure, marketing, and staffing. Consider your available capital and plan your expenses carefully.
In conclusion, starting a web hosting company in a crowded market can be challenging, but with proper planning and execution, it can be successful. Consider your market, competition, business model, technical expertise, marketing strategy, and capital before making a final decision.
 
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