Setting Up a Web Hosting Business
Setting Up a Web Hosting Business
Many people think that web hosting is a good way of getting quick money, however if you want to run a web hosting business legitimately and provide your customers with a high level of customer service and uptime, investment is needed both in terms of your own time as well as capital. Many people choose to setup a web hosting business to make some quick money and then decide to close down overnight; it is these kind of businesses that give the web hosting industry itself a bad name. However, those who are able to run a web hosting business legitimately will find that it can take a while to actually build any web hosting company up to be a successful business; you will also find that a lot of initial capital is required to cover the costs of the main things needed to run a web hosting business such as servers, monitoring applications and billing/support applications. You will also need to dedicate your time to your web hosting business to ensure that you can sort out any issues with servers as they arise to minimize the amount of downtime that could be faced; but by dedicating your own time you will also be able to ensure that you can answer customer queries as they come in – the faster you respond to your customers the more satisfied they are likely to be.
What are the basics that I need to know to start a web hosting business?
In order to run any business legitimately, you need to have good knowledge of basic business law since it is incredibly important that you trade within the laws of the country where you are based; for example if you are trading in the UK, you still need to follow the Distance Selling Act when trading. To ensure your business is successful you will also need capital, the main reason for this being that you need to have at least one server which you can host your clients on – other costs may include external monitoring services and billing/support applications; however, it is important to note that most of the things you need to start a web hosting business can be leased on a monthly basis meaning that you needn’t necessarily risk too much money. Despite both capital and a good knowledge of business law, the most important things you need in order to setup any business are motivation and time; you need to have the motivation to ensure that your business is going to be successful, but in order to be fully motivated you need to have the time to dedicate to your web hosting business. Other things which you may find helpful when starting an affordable web hosting business could include:
- Server management skills – when starting a web hosting business you may find it useful to have a certain amount of server management skills since you may need to configure your servers for your web hosting customers – on the other hand, you could always make use of managed VPS or dedicated server hosting services, or just start off on a reseller web hosting package
- a business partner – it is always a good idea to have a business partner when starting any form of business since it means that there will be two of you to share the acitivities involved in running the business, but it also means that you have soemone else to rely on for business capital when needed.
So in summary the main things you need to start a web hosting business are capital, motivation and time; if you feel that you lack any of these then you should reconsider your decision to start a web hosting business.
Staff and Servers
When setting up a web hosting business you will want to consider whether or not it would be a good idea to take on extra staff apart from yourself or your business partner to begin with, as well as whether or not you feel you will need your own servers to begin with. With web hosting you will find that staff and servers are the two biggest costs that you will face, however both are also the two most important factors and are central to the running and stability of your web hosting business. When you setup your business you may find that you don’t need to hire any extra staff as you have a low workload, however as your business grows you may want to consider hiring extra staff for purposes such as:
- support staff – as your business gains more customers and grows, you will probably find the need for extra support staff as you will probably find that a large number of your customers will be seeking assistance with their web hosting accounts, and when you have many customers seeking assistance you will find that you won’t be able to handle such queries on your own
- billing staff – with the more customers you get, you are bound to get cancellations now and then as well as other billing related queries – depending on the size of your web hosting business you may want to consider billing staff to handle cancellation requests
- sales staff – with any business it is important to ensure that you work your hardest to push out any new products you have as well as to try and sell as many products or services as possible – because of this you should ensure that you have enough sales staff available to meet the demands of prospective customers.
The servers which you have are also important to your business; although in reality you are selling services to your clients, the servers that a web hosting business owns are classed as ‘stock’ since most web hosting companies set out a specific number of accounts which can be hosted per server, and they then base their overall server requirements on these base figures. Since your servers will be hosting your clients, you want them to be reliable; because of this, you should consider the specifications of the following hardware in any web hosting server:
CPU – if you are going to be offering shared hosting packages then you will probably be looking to host at least 100 sites on each web hosting server, and because of this it is important that you have at least a dual core CPU to ensure that the server is able to keep up with the demands of visitors who are viewing websites that are hosted on your web hosting servers- RAM – some websites tend to use temporary files, as well as the applications that are hosted on the server, meaning that it is important to have a high amount of RAM for these applications and websites to make use of – without a large amount of RAM the server could fail
- bandwidth – the amount of bandwidth that comes with any server decides just how many visitors are able to pass between the server and the general internet, and in the case of web hosting it also dictates how many accounts can be hosted per server – however, the amount of visitors allowed through to a single website does depend on just how big the website is in terms of file size
- disk space – every server has at least one hard drive, and each hard drive can be of a different size – however, the size of the hard drive matters since this will also dictate how many websites can be hosted per server – you don’t want to go overselling your web hosting servers at the end of the day.
So from the above we can tell that once your busines starts to grow, both servers and staff are essential to the running of your business; without either you will find that your business won’t be able to function correctly. However, you may wish to go straight in with the use of staff and dedicated servers when you start your web hosting business; although this isn’t always recommended, it does mean that you can easily expand without the need to take on extra staff or servers until you really feel the need to.
Payment
As a business it is always a good idea to be able to accept payments from customers via the interent since it is less hassle for them but also means that the money goes straight into your bank account and the payment is instant. There are many different payment gateways which are available to you, but at the end of the day any method which can be used to accept payments online is going to cost a bit, but at the end of the day the convenience of it should make it a worthwhile investment. The main payment gateways being used by web hosting providers include:
- PayPal – this is by far the most popular payment gateway on the internet since it allows users to have their own account in which they can store their own money – however, it also allows users to use their credit cards and bank accounts on websites where it is accepted as a payment method – since all the information stays within the boundaries of PayPal, it is very secure
- Google Checkout – this works in a similar way to PayPal but is less well known – the good thing with Google Checkout in the eyes of merchants is that it is completely free to use and for every £1 which is spent on Google Adwords they get £10 in orders processed for free.
So in summary, having at least the use of one internet payment gateway is improtant when setting up a web hosting business. However, there is nothing wrong with accepting traditional methods of payment such as cheque along side more technical forms.
In conclusion, there are many different things that you need to start a web hosting business; however, the main thing that you need is the determination to ensure that your business is a success since this will mean that anything is possible for you. It is recommended that you start with as little as possible and task on other resources, such as staff and servers, as you expand so that you are able to offer customers a high level of customer service throughout the growth of your business.
