Starting a Web Hosting Company

Running a web hosting company can be a difficult and demanding task. If you think it’s a “get rich quick” scheme then read all the way to the end of this article. Web hosting, when done correctly, can be very demanding on yours and your families time, but yet very rewarding too. When choosing to start a hosting company there are a number of decisions to make at the start, which will help you build a more stable company. The aim of this article is to cover some of the technical steps to starting up. What it does not cover is legal aspects, business bank accounts, registering your company name etc…

How much time do you need to invest?

With the internet being a world wide presence, this potentially allows you to gain clients from all corners of the globe. Due to this reason and more, web hosting is not a 9 - 5 job. A client in Australia could be at peak business hours and need support when you are normally sleeping. Looking after a hosting company requires 24 x 7 availability due to reasons above and also that clients expect quick responses. It is no longer good enough to make someone wait 12 hours for an urgent support ticket to be answered. They want answers now. Just because hosting is 24 x 7 it does not mean you have to work 24 x 7 yourself. How to cover 24 hours a day is a business choice you need to make and how that will be accomplished is also something you will need to take in to consideration such as extra staff, mobile phone alerts of emails or outsourcing to name a few.

Choosing the right Hosting Platform

One of the most important decisions you will make is deciding what services you will offer. Will you be offering Windows based hosting or Linux based? and what type of accounts will you offer… shared, reseller, VPS or dedicated servers? The best way is to choose what you know, as providing technical support can be a difficult task if you do not know the system your self. Clients have an endless number of questions down to something simple like a permissions setting that is wrong, all the way to requiring custom DLL’s to be installed on a Windows server. Along with choosing the right hosting platform, you also need to choose a good control panel as clients will need to use this to control their accounts.

What web hosting services do you want to offer?

Now that you have chosen a platform the choice of what services to offer needs to be considered. The usual route hosting companies go is to offer shared and reseller accounts. With the advancement in control panels over the years the managing of domains and resources can be controlled by the users (working with in the restrictions you set). What I always recommend if you are new to hosting is to start small and build up slowly as you gain more clients.

Start small and grow

If you are on a tight budget then the best way to start is by using a reseller account and selling resources of another company. This model has it’s up and down sides to it. One of the great advantages of starting small is that you can gradually gain a small following of very loyal customers. When you are small you know your customers by name and this has great meaning as they will refer their friends to the “friendly host” and you will gain respect from them as you respect them.

On the up side you do not need to manage the servers, you do not need to worry what happens when a hard drive fails, you do not need to work out network issues and generally being a reseller takes a lot of strain off a small startup.

However, the down side to being a reseller is that you do not get full control. When a client emails with a problem there are a number of times you wish you could just hop on a server, fix it with in minutes and email your client back with the good news. Being a reseller, you do not have this luxury always and often, you wait yourself for the host to fix the problem which in turn, you report it back to your client. This process can increase the waiting time for the answer to get back to the client.

If managing servers is not your strong point then you either need to start with a reseller account, or hire a company to manage your server(s) for you.

Choosing web hosting plans and pricing

Choosing your web hosting plans and pricing is another factor that will make or break your company. You need to choose the right amount of plans and the right costs. But, the problem with this is that there is no “official” price. This is where you need to decide what niche or type of clients you are targeting.

What I recommend doing is creating 4 or 5 plans for shared accounts, 4 or 5 for reseller accounts and similar for VPS or dedicated if you offer those services. Potential clients do not want to be baffled by the amount of plans and information you provide, so keep it simple and make it easy to compare plans and resources.

Pricing needs to be decided also, as you can charge anywhere from just a few dollars per month to a few hundred a month for a shared account and still make money. Do not think competing with the lowest prices is the best way forwards. There are plenty of clients who are willing to pay more on a less cluttered web host. You need to decide if you want to have 100 clients paying $200 each per month or 6500 clients paying about $3 each per month. I know who I would rather support.

Selling your services

Now that you have your platform chosen, your plans created and your pricing you now need to create your website. Unless you plan on calling around businesses and knocking door to door, you will need to have a website that sells your services. Not only does it need to sell your services, it needs to have people interested in buying your services browse it’s pages. You might have the most fancy and expensive website in the world, but if nobody visits then it’s pointless. This requires you create good content with a good layout and gain interest from search engines or paid advertising. This topic is too large to cover here and is not in the scope of this article. An article about this subject will be available soon.

Selling products or services on the internet needs to be done correctly too. People do not want to pass their private details such as name and address, credit card and passwords to you if you are not secure. For this reason, purchase an SSL certificate. They run as little as $20 for a year. Also when collecting information about the user, be selective in what you require from them. Do not use the form to conduct “research” on the client. A name, address, phone number and payment details will suffice. Also make it clear what will happen when they hit sign up, and also explain how and when they will be billed and when so the client is completely clear on what they just purchased.

Do it!

If you have been mulling for weeks, months or years on running a web hosting business then the best advice I have is to just do it. Make sure you understand what is involved and then get going. Remember that many of your clients will make a living from running their website, so make sure you provide top support, communicate with them and give the best service possible.