If you have looked into the possibility of re-seller web hosting then the thought of starting your own web hosting company has no doubt crossed your mind. Having your own web hosting company can be a way of making decent money, but money does not come without work. In this guide, we will explore how to start your own web hosting company, and why it is much easier than many people think.
To start up your own web hosting company, you do not need to buy large amounts of server space or even set up expensive websites; in fact, the re-seller web hosting outlay is rather minimal.
The easiest way to set up and sell hosting space for your new company is reseller hosting. For those of you that do not know what reseller hosting is it allows you to act as a middle man between transactions. You buy and sell the hosting space that you do not need or want to retail. If you are thinking that this is a silly idea because you will just be selling on somebody else’s space they this statement could not be further from the truth, as the majority of web hosts allow you to buy their space, re-brand it, then resell that space onto your customers.
After you have setup your company, you need to find the correct people. This is by far the toughest part of setting up a web hosting company for one of a few reasons. Firstly, web hosting comes with a lot of trust; therefore, you will need to make sure you offer high levels of security on every package; otherwise, people will not buy from your company. Secondly, you need to make sure that you are offering something different from other larger companies. The market is not limited to just a few companies, so you need to stand out from the crowd. Many new web hosting companies offer domain names alongside a web hosting package, as 80% of people that already have a domain name have a hosting package to accompany it, therefore, finding the other 20% is a hard task, and one that a new company should not have to go through.
The amount that you can make from starting up your own web hosting account depends on a variety of factors:
If you can undercut your product against your competitors then you will be successful in business. Making sure you are at least offering a market competitive price is essential to being successful in the web hosting business.
If you put in time to find the right customers, then you have a much better chance of being successful, if you do not put in time then you stand no chance of success.
If you put in time, and have a terrific price, but spend your time doing nothing then your product will not get into the market. Putting your effort into the right business avenues will give you every chance of success.
A company that offers reasonable prices, and puts in time and effort into the right places will often do well, but will rarely take business from other sellers. Special deals allow companies to draw business away from other companies, and this is business that is extremely valuable in the web hosting market.
You should always expect to make your money back from your web hosting company, and this if you have not been remarkably successful. At the very least, you should expect to cover your websites that you have on the hosting plan; however, there are plenty of retailers that make a regular monthly income for little work.
Always making sure you have a plan in place is a terrific way to start any company. In this business plan, you should detail what packages you intend to offer, and detail how these are different from other websites, you then need to document these changes on your website to get the point across to your potential customers. You also need to make sure you get the balance right between the companies you intend to sell server space to, if you get this balance right then there is much more potential to make money in the industry.
A Few Problems You May Face:
When you have your own web hosting company, most people expect around the clock 24 hour service. Now, this is not a problem for larger corporations that can employ various people around the world, but for you, this will not be as easy. The way around this is to make no secret that you are a start up company, and to guarantee a 24 hour support turnaround. The problem with this is the savvier of people buying web hosting space will not be happy, because other companies will offer 24 hour support.
You also need to do a lot of homework before you start up your company. If you do not know this information then you will be lost when people start asking your questions, and as you are the support, you will need to know these answers.
Like every other company, you will need to setup your name, sort out your taxes, and make sure you company is 100% legal. You will need to track your payments made to your hosting company against the expenses that you have to pay, and this requires a lot of work, but is no different to any other company that you may start up.
You will also need to design and build your own website to promote your product. This is not essential, but if you are not on the Internet then getting your point across may be extraordinarily tough. You will then need to make sure this site is ranked in the search engines, because this is a vast market, and if nobody can find you on the Internet then you will be left behind.
Of course, this is not the only way you can set up and host your own web hosting company. You can buy a rather large room, buy a few hundred servers and do it the complicated way, but this does not make any sense for the majority of start up businesses.
Once your company is setup, and you have a precise list of clients, the work is rather minimal. It is getting to this stage that is the tough part, and if you follow some of the advice above you have a much better chance of success.