After a good amount of time in the business of web hosting, I have come to realize many things. Learning these things has
helped me in my web hosting business My-E-Space.com, more then anything else! It wasnt any costly
SEO company, it wasnt any overpriced Google or
Yahoo ad program. It was hard work, it was hours and HOURS that turned into days and then weeks of time spent working on
the website, editing the
website (then editing again), making sure my keyword relevancy was up to par using my favorite
????: NamePros.com http://www.namepros.com/web-hosting-discussion/183968-what-you-should-know-start-hosting.html
keyword analyzer at
Submit Express , checking to make sure my packages were priced
to compete with other hosts that offered the same quality services that I provide (not the kiddie hosts that offer 25gb
disc space and 200gb bandwidth for $5.00 a month), and also taking care of my clients to ensure they got anything they
wanted or needed.
So anyway, lets get on to what has worked for me. Some of you other hosts may disagree with me, or have had different
experiences then I, so again, this is only what worked for me, and is
my opinion only.
I started my first web hosting business in November of 2004. I cant disclose the name of that business due to the agreement
of sale, but I can tell you that it was a very successful host, and was on track to be a big player in the web hosting game.
I just burnt out and had to sell! I was working 16-20 hours a day taking care of clients via Yahoo, MSN, ICQ, AOL, Skype,
PHPLive, and any other live chat program I could use, email, and phone. This leads me to my first assessment, and bit of
knowledge to pass on.
1.
Support : This is (in my mind) the most important part of a web hosting business, and can make or break a starting
business FAST, either way. If you offer TRUE 24x7 support to your clients, and the support they receive is fast, accurate,
and friendly. Your brand (host name and logo) will spread like wildfire, in time, you just have to be consistent with the
support. You cant let tickets lay around because you had to go to school, or you had to mow the lawn, or your girlfriend
wouldnt let you, or you just didnt feel like dealing with it.
This can prove to be a very difficult task after awhile. The first few customers you get will submit a few tickets a month.
Then, when you have a few more, maybe 25, you will start to have tickets, live chats, emails, pre-sales questions, all of
it pouring in at once. Then you get up in to the 50-100 client range and you are swamped. This is when you start to loose
sleep and begin to burn out quick!
If you have 50-100, or ever 30 or so, you should look into an
outsourced hosting support solution.
I have used
BobCares and have found them to be the most professional and reliable for the package they offer resellers, and
starts at $24 a month to cover 12 clients 24 hours a day 7 days a week.
Some hosts, and customers, frown upon outsourcing support, but until you have the money to hire your own support staff, I
suggest you look into outsourcing. Another company I have heard good things about is Root Support, though I havent tried
them, I have noticed that they have some very good prices, and as I said, good reviews.
So thats the upside, the bad side is easy. You dont offer good support, and you find yourself in 3 months telling the
500 FREE hosting clients, and no paid clients that you have, that they need to find another host because you are shutting
down.
2.
Choosing a host : When you are searching for a
ModernBill, {url="http://whmautopilot.com"]WHMAutoPilot[/URL],
ClientExec, and
Lpanel. Most of these options allow for automated account creation, meaning when a customer signs up and pays, it automaticly creates their account and emails the customer their login information.It isnt wise to use this feature though, unless you also pay for a fraudgate to check all your orders before setup. If you allow instant (automated) account creation without a fruadgate, you will find yourself swamped with spammers and fraudulent orders that result in charge backs, in no time at all!
ModernBill is by far the best in my opinion, and goes for about $25 a month. It keeps track of everything you can think of, and some very key features that others dont have, such as the ability to update package price depending on the upgrades they choose. WHMAutoPilot is the next step down at the same price ($25). It is still a very powerfull billing system, but lacks a few small features that ModernBill has. ClientExec is the best choice for a beginning web host, and starts at $12 a month. It is all you need to get ready to sell and keep track or your clients. It also has a built in support desk (most good billing scripts do). When you choose your billing system, be sure you read the description of that package. Some of them charge per client after a certain amount, and that can get costly.
4.
Advertising : Its no secret that any websites success depends on the amount of traffic it receives. So, in order to get
traffic you have to let people know that your website and packages are out there!
Some good ways I have found for doing this are:
A. Forum posts: Register at as many
web hosting forums you can find in Google. Most web hosing forums have Requests Hosting sections, so you can post offers to requests there, and you can also post offers in the Offers section usually.
Be sure of the forum rules BEFORE posting your offers though. If you post an offer and it is edited by a moderator and only reads Read the rules your not going to look like the most trustworthy host. Remember to put a link to your hosting website, and maybe a little sentence or 2 about your services in your signature on the forum, again, read the rules on forum signatures at that forum. Try and make it eye cacthing, add some color, or some symbols (>> +ll whatever).
Here is an example of the signature I use on one of my favorite hosting forums:
B. Look on web hosting forums for people offering ad space. I use
WebHostingTalk.com for my ad searches, and it has worked
very well. Dont buy ad space on just any website. Try to only buy ad space on websites that pertain to yoru market. For example, you wouldnt put ads for a hunting website on an animal rights activist website! Try to only place ads for your hosting business on design sites, or hosting search forums, hosting directories, script development websites, anything that they might need a URL="http://my-e-space.com"]web host[/URL] for!
C. Banners : Some say banner ads are dead, but I disagree. I know when I go to a website and see an eye catching banner ad, I tend to click on the ad to see what its all about. Whether this results in a sale or not, it is still a great avenue
for brand awareness. So, if you decide to do some banner advertising, be sure to have an ad that looks professional, and eye catching. Otherwise you have an ad that no one notices.
D. Word of mouth : Without a doubt, the BEST type of advertising! When you provide good service and support to a client, he goes and tells his friends Hey, I got this host you guys should check out. Then, those friends tell their friends,
and their friends tell their friends, and their.You see where Im going with this!
E. Local Market : Never underestimate your local market. You can start by making some fliers to post around town, or place some business cards on post-it boards. Ads in your local paper or ad magazine are sometimes good also. You can also think about sending a little packet of information about your business and what you can do for a client to small businesses in / around your area that might need a website and/or web host. If your budget allows for it, radio and tv ads are great sources, but can be very costly.
5.
Prices : Dont try to be the cheapest host on the block, you will only run yourself into the ground over time. If you look at the Big Boys, or as I like to call them, the Oversellers who can, you will see that if you tried to beat their
prices you would be out of business within 2 3 months.
Instead, take a look at your hosting package, whether it be a reseller, VPS, or Dedicated Server, and do a little math:
Lets say you have a reseller package with 10gb disc space, and 100gb bandwidth (a little large for a starter reseller I
know, but its an easy round number to use). Well say your reseller costs you $25 a month.
You can look at your costs in a couple of different ways, heres a couple that I use:
Disc Space Cost (monthly) Bandwidth
10GB $25.00 100GB
5GB $12.50 50GB
2.5GB $6.25 25GB
1.25GB $3.12 12.5GB
612MB $1.56 6.25GB
Or, you can split the costs and look at it like this:
Disc Space Cost Bandwidth Cost
10GB $12.50 100GB $12.50
5GB $6.25 50GB $6.25
2.5GB $3.12 25GB $3.12
1.25GB $1.56 12.5GB $1.56
612MB $0.78 6.25GB $0.78
Or, do a little chart like this:
Disc Space 10GB 5GB 2.5GB 1.25GB 612MB
Bandwidth
100GB $25.00 $18.75 $15.62 $14.06 $13.28
50GB $18.75 $12.50 $9.37 $7.81 $7.03
25GB $15.62 $9.37 $6.24 $4.68 $3.90
12.5GB $14.06 $7.81 $4.68 $3.12 $2.34
6.25GB $13.23 $7.03 $3.90 $2.34 $1.56
Remember to ad in your other costs, such as your billing system, your sitebuilder (if you have one), processor fees, and any other cost you may need to add.
After you have added up all of your costs, then decide what you think is a fair price to charge OVER your costs. So if a package costs you $5 a month, then maybe you would charge $8 - $7 - $6 a month. Just be sure to allow for enough profit to upgrade when you need to.
Again, dont try to be the cheapest, youll be shooting yourself in the foot for sure!
6.
Overselling : Overselling is the practice of selling more disc space and/or bandwidth then you actually have. So for an example, lets say you have 1 apple, you tell 8 people that you will sell them %25 of the apple. So if the people actually eat all of their apple, you are in trouble! Some overselling is ok, not a lot, you dont want to overload your reseller , VPS, or dedicated server. You can safely assume the following (usually).
????: NamePros.com http://www.namepros.com/showthread.php?t=183968
If you have 10gb disc space, and 100gb bandwidth, you can sell it as if you had 12gb disc space, and 120gb bandwidth. Its a small percentage, but can help to increase profits. But be sure to keep a close eye on things, and upgrade when / if needed.
7.
Professionalism : When you are posting an ad on a forum, replying to a pre-sales email, talking a to customer in chat, or replying to a support ticket, you must always maintain a professional attitude through your speech, or typing. A person looking for hosting isnt going to be interested in a post that reads like a 12 year old wrote it. Try to use proper punctuation, I am not the worlds best at that (as you can see), but I try.
Never discuss business matters or private customer information in public situations such as forums. This can lead to serious legal issues!
8.
Free Hosting : A lot of hosts offer free hosting in hopes that the user will eventually upgrade. The truth is, only about %5 of your free hosting customers will upgrade to a paid plan. Also, it is usually those seeking free hosting that have no idea what they are doing and send hundreds of support tickets a month. Or, they sign up with a free host, send out a few thousand spam emails, and then move on to the next free host.
So to make a long story short, free hosting isnt worth the time or frustration. Instead, maybe offer a small, shared package for $1.00 a month. This is low enough to reel them in, and then have them upgrade.
If you do decide to offer free hosting, be sure to put free hosting customers on one server or reseller, and paid clients on another reseller or server. That way if one of your free clients overloads the server, your paid clients are not affected
at all, and you have no worries of loosing them!
9.
Firm, Fair, and Consistent : I have found that you have to be fair overall, but you must also be firm, and consistent with your clients. If they are late on their payments all the time, start to penalize them with a late fee,
their payments will soon show up on time for sure. I dont mean to penalize them $100 for the first time their late, but there should be some sort of push to make them pay on time.
If you have a client who is requesting a refund because of an extended amount of downtime, you would want your money back to, so give it to them, always be fair.
Stay on top of your billing system and system resources, and when you come across a problem, take care of it right then,
dont wait!
I hope some of this helps some of you!
Mike Brown
My-E-Space.com
http://my-e-space.com
You may redistribute this article, but you must keep all links intact.
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04-05-2006, 01:43 AM
What you should know to start a hosting business! 
