Web hosting is an ever growing industry and, each day, numerous companies spring up trying to make it in this competitive field. Of these many attempts, very few last long enough to become profitable due to a variety of reasons such as poor planning, insufficient capital, unexpected circumstances etc. This article should serve as an effective guideline to person seeking to venture into this industry from people who’ve actually done it themselves!
Firstly, you need to know how you will provide the service. Will you run your own servers? Will you lease servers from a larger company? These are some of the questions you need to ask yourself before you begin. Running your own servers is quite expensive and usually only turns out profitable in larger companies. The best bet for a new company, with a small budget, is to purchase a “reseller plan” from the many large companies that offer them.
Reseller plans work like this. You pay a monthly fee (usually) in return for a certain allotted amount of disk space and bandwidth which you can then “resell” in smaller amounts to your own clients. They will provide you with a Control Panel from which you can add accounts for your new clients and adjust their features as necessary. You must plan carefully, beforehand, and ensure that you can make a profit on the resale of the service you lease.
The next major concern is advertising and marketing. As mentioned earlier, this is a highly competitive industry. Unless you have a niche all to yourself (such as your friends), a budget should be set aside for investment, in advertising, on websites likely to attract webmasters. Such sites include; webmaster forums, other web hosts, social networking sites etc. Only proper placement, and creative advertising, will ensure that awareness of your new company grows quickly and you get new clients.
One other concern is reliability. While much of this will depend on the company you lease your servers from, you need to be sure that you’re in it for the long run. Don’t expect to make a profit in your first month (although you might). Provide a good reliable service and word will spread. Patience is key.
As mentioned before, web hosting is a fiercely competitive industry so you must be willing to dedicate the time, energy, and money to ensure your own success. The good news is that, in this business, your customers are a regular source of income. Unlike companies that sell products, you sell a service that you get paid for regularly (providing that you keep clients happy) meaning you won’t need to advertise indefinitely. With proper business practices, and a little luck, you will keep all your customers and continue to generate new ones, through referrals, until you have your own thriving web hosting company!