Starting my first web hosting business. Need some advice.

Hello.

I'm new to the forums.
I found Digital Point on Google.

Basically I am starting up my own web hosting business.
I have experience with working for web hosting companies.
I am familiar with root and I know my way around.

However, until now, I have never actually owned my own company.
I need some tips on the business and marketing side of things.

I bought a VPS for $70 a month which includes free cPanel and WHMCS.
It's a dual core Intel Xeon 2.4GHz with 4GB ram.
I didn't want to start out as a reseller as I wanted to run my own service.
I have 200GB hard drive and 1TB monthly bandwidth.

I realise $70 a month is a large investment when you're just starting out.
But I chose to do that over buying a reseller plan.
I would like to make this work. Any advice on pricing, package limits, etc.

Also how would be the best way to go about getting people interested?
I would like to provide them with the best service they've ever had.
But it's difficult to convince people when you've just started out.
Any advice would be great.
However, please don't advise me to downgrade to a reseller.
I made the instant jump to a VPS on purpose. I don't want a reseller.
Anyway, any helpful advice would be much appreciated. Thanks.

 

Best of luck

 

Thanks.
I really hope this works out.
Actually owning and running a business is new to me.
A very different kettle of fish to simply working for one.
Am waiting on your advice guys. Much appreciated.

 

Hi,
One thing that's going to stop you cold is getting people to trust that their hard work(website etc.) isn't going down the drain because you decide it's not for you or you don't pay your monthly dues?
-You need an easy to use, good looking portal(website)
-Do you offer instant WordPress install, Joomla, cpanel(for your customers) etc. these things will make or break you
-200GB(?) is really not that much if someone created some type of video site
I really like the fact you are trying to start this but take a few minutes and see how you can offer everything a reseller can without being a reseller. This is going to be harder than you think.
You need to work these things out before you purchase the VPS at $70 a month
How do I know this? I also wanted to start a hosting business some years ago and found out that it would be very hard to compete with the excellent reseller packages some companies offer.
This market is also saturated to the point that you would have to make your service almost free to attract customers.
One thing I do when starting any new venture is get a fresh notebook and do my research.
Do an outline first(like in school) Choose any good reseller plan and see how you can cost effectively mimic the basics.
This is honest information that I hope you can use.
GOOD LUCK!
P.S. This is an uphill battle but if you are determined and get the outline done and functional website-
I can help you with the rest

 

Built your reputation first.

Don't compete on price.

Provide more value added service.

 

Thanks for the advice.
Beating those reseller plans is going to be a tricky task.
I think I will concentrate more on the QUALITY of service.
And worry less about competing in price.
I believe that, deep down, it's quality that people are after.
Not the cheapest bargain.
Why buy a pack of 10 cds from poundland that don't work for very long.
When you can buy a pack of 10 longlasting ones from whsmith for £3 more.

One of the other problems I have though, is my web designing skills are atrocious.
The best I have ever done is customising one of these templates:

http://www.freewebhostingtemplates.com/

Code (markup):

What are your opinions on these?
I cannot use photoshop for my life. At all.

 

Offer two plans: free & paid.

Get customers on free plan and run promotions to switch to paid plan. Make sure customer service is fast, quick & easy.

 

Am not so sure about offering free hosting?
How does that work? If people use up your resources without paying.
How would you make them "want" to pay? When they can get for free?
I hope you see my point. I'm a bit skeptical about free hosting.

 

I've had some experience in setting up and running my own web hosting service, here's some things to think about.

You Need a Niche!
I can't stress this enough! You need to be heard amongst all that noise. The market is so saturated, everyone is offering/targeting "Cheap Web Hosting", "cPanel Web Hosting" etc. You need to target a vertical that may be only a small percent of the total market, not only will it be easier to achieve higher SERPs with a niche phrase, you can also focus on building a solution that will be perfect for that niche, rather than a one-size-fits-all. For example you could target UK photographers and help them to get their portfolio online.


Another thing to think about:
Folks that know about FTP/bandwidth/servers etc do the really need your value-added (support/customer service)? They will be looking to get the most space/bandwidth for the cheapest price. So maybe target the tech noobs, people that need to be online but don't want to worry/know about the technical jargon is. Think about your approach.

Service
You have already identified that this is something you want to focus on, which is great! The technology for automation is all there, WHMCS can automatically setup hosting accounts and reply to support request with standard answers. But if service is going to be your USP, how about providing users with a number that can reach you personally and you can go through which solution would best suit their needs and setup the account for them, or help them with any technical issues even out-of-hours.
It may not be scalable, but that is something to worry about once you get big enough.

Price
The bargain-hunter clients tend to be the ones that cause most hassle. Also there is no way you can compete on price, with the likes of HostGator and other big hosting companies who have the capacity to oversell and offer UNLIMTED disk space/bandwidth for a ridiculously cheap amount per month.

Features
So many hosts separate their packages by space/bandwidth, realistically any client who is going to be using shared hosting have roughly the same requirements. Big projects will have their own dedicated servers or something similar. So if you are going to have different packages, think about differentiating them in a way which is actually going to create segments in your client base.

This isn't a comprehensive list, but just some things that came to mind, hope it helps.

- Mutasim

 

Buy a pre built hostying company which will save you money, time and hard work.

 

Mhmmm...I like the idea of a niche.
I never thought of that.
However, deciding my niche will be complicated.
I have to target enough people yet escape the competition.
That is very tricky. Still I like the idea.
Please post any niche suggestions below guys.
I will rack my brain over the next couple of days also.

 

I got all that I needed at theebooklibrarytodady.com, You can download to your computer
because everything is digital topics on web hosting just about anything you can think of
hope it helps. P53

 

Quality of service would be:
-99.9% up time(same as others though) and mandatory actually
-Less than 1 hour response time for support tickets(has to be better than others)
-Easy to use service(less need for support)
I'm not sure what areas of your hosting business that would say better quality over whats already out there.
Your CD analogy does not quite fit...this is why.
-Upstart hosting company(but quality?) Where is the quality coming from? vs Established hosting company with cheap de facto amenities(options)
So trust your business to an unknown upstart that simply just has hosting? or Everything and the kitchen, sink known to be good
for $7.99 a month
Owning a hosting company is a nice idea but I'm afraid without more research and a plan this isn't going to be more than a learning experience.
Go to Fat Cow, Host Monster, Blue Host and even Yahoo and see how you can beat them... on any level really.
Please notice that most of these have:
-Free Domain Name
-Unlimited Disk space
-Unlimited Band Width
-Site Builder
Please report back.
Good Luck!

 

Mhmm...a learning experience.
I want this to work out.
I understand your point about trust though.
How can I claim to offer quality when I've just started.
No one will trust my word against that of an established company.

I have to somehow get people to try my service before they buy.
I need to somehow earn their trust.
But in order to do that I would need them to try me out.

Mhmmm....as for unlimited space and bandwidth.
I do not believe in unlimited, never will. There is no such thing.

I really would like my service to work out.
I would like to gain a 5 star reputation.
Any ideas on how I can get those first few customers then?

 

Once you have a website, make it look professional. Don't rush things, spend months doing market research and see what other companies are doing and do it better. I spent almost 6 months making my website and its still not even fully finished yet, i still want to implement a few things.

I was going to say start off small, so it will be easier to start profiting. And once your start profiting your grow with your profits, that way you control your growth. If you are really interested in doing this, pop me a pm cause i might have an idea that you will like.

As for making money out of free plans, you limit theyre resources to a tiny plan, ie 100mb diskspace and 1Gb bandwidth, so when their site grows, they'll be forced to upgrade.

You can tell a spammy, poorly made company by many things, design, content, language etc

For example, if you visit a site, their site is is poorly made, bad broken English, no script intergrations etc it puts you off immediately. Getting clients isnt easy, but these things help alot.
If you look at most hosting sites, theyre all based off the same principle, clean design, whmcs, live support, some sort of freebie to entice customers with. It goes on. But every webhosting company has a unique way of doing stuff.

Theres alot to this. Also because you started on a $70 VPS, you will need some backup money to cover the expenses until you start profiting. You will need $90 a month to start profiting as whmcs is $20 a month.

 

Actually that $70 includes WHMCS as well as cPanel/WHM.
But as for "designing" a clean website.
I simply cannot use Photoshop. I just don't understand it.
I've tried and tried but just can't pick it up.
I really don't want my site to look rubbish, but all I can do is basic HTML.
I don't even understand CSS, never mind Photoshop, Javascript, and Flash.
How am I supposed to get around this?
The best I can do is edit one of these rather amateur looking templates:

http://freewebhostingtemplates.com/

Code (markup):