You need to get really serious about market research so that you can identify a niche in which you can provide a good service, for a good price, and profit. If you try to compete as one of the other deep discounters then you are going to drive yourself into the ground. As a late entrant, I highly suggest you consider focusing almost exclusively on your local market. There are still people who will pay a premium for solid local service from someone who they could, at least theoretically, meet for coffee at a local café.
I hope this helps. I think it is really great that you are interested in starting your own hosting business. It would be wise to look into the business side first. You need to pick a target market segment and plan a compelling offering.
Remember that price, features, and time-frame are all interconnected and must be balanced. Always think and negotiate in terms of packages and do not get in the business of undercutting yourself.
Frank