Career Testing
Career Testing
Career Testing
ENTREPRENEURSHIP / SEP. 04, 2014
version 3, draft 3

How to Start a Web Hosting Business

With hundreds of sites being launched on a daily basis, web hosting has become a multi-million dollar industry. Many people all over the world are tapping into this market by launching their own web hosting businesses. However, this should not be taken as a way of making easy money. Succeeding in web hosting requires a lot of planning, hard work and dedication.

You can start a web hosting business in two main ways:

Set up your own dedicated server

You can choose to start your web hosting business from scratch by setting up your own server. This is basically a hard drive where files for the sites hosted are stored.

Getting your own dedicated server offers several advantages:

  • If you own some sites, having your own server means free hosting for you
  • A dedicated server allows you to have control over aspects such as server speed, security and performance
  • You can select your preferred operating systems, database and hardware
  • You won’t have to pay anything extra for storage space or bandwidth

However, this option has several downsides:

  • Servers are usually very costly. Depending on your needs, the server could cost anything from $1000 to $100,000 or more
  • Servers use lots of electricity, which will further raise your expenses. In addition, you may have to acquire a backup generator in readiness for the inevitable power outages
  • A cool and dry storage space is another cost you will incur
  • The server will need to be monitored constantly to ensure it is running smoothly. Therefore, you might need to hire a team to handle technical support
  • Web hosting has a lot of legal implications. As a result, the services of an attorney might be required

Become a reseller

If you don’t have the required resources or technical knowledge, you could choose to become a reseller with existing web hosting services. Reselling involves buying hosting plans at wholesale prices, and then selling them off at a profit. Some of the companies that allow reseller hosting include godaddy.com, hostgator.com, hostpapa.com and justhost.com. Being a web host reseller offers several advantages:

  • The startup costs for setting up a website reselling business are relatively low
  • Technical support is usually provided by the web hosting company at no extra cost
  • The web hosting company handles all the legal details

Here are some disadvantages:

  • You are limited to the web hosting company’s software and hardware options
  • You don’t have control over server performance, speed and security
  • You might need to pay a little more for extra storage space and bandwidth as your business grows

To get an edge over your competitors, you need to get a unique selling proposition for your business. Do you provide round the clock technical support? Are you using the latest, super-fast processor in your server? Be sure to mention such information in your marketing materials. In addition, it would be advisable to have varied services in your portfolio. For instance, you could offer VPS hosting plans, business hosting plans, budget hosting plans and multiple hosting plans. This will give your prospects different options to choose from. 

Image: Torkild Retvedt, Flickr

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