starting a Web Hosting enterprise - The Dos and Don'ts

Hello,

I decided to write a record after seeing a post on well known forum. The post read:

Server

Hello
If you decide to work with me I am quite flexible on the money split as long as its not a slow-witted split. I'm happy to do 50/50, 40/40/20(bills) etc.

This was from a user who was seeing to start a hosting company. He/she owned a domain name & had purchased a "unlimited reseller hosting account" from an additional one small company. I refuse to mention any names here. However, this person's partnership was only requesting someone to cover the costs of the Whmcs license. I mean, If I was a kid trying to make a quick buck, this would seem like the excellent opportunity. Spend a month, spend about 5 hours a day and advertise in any place I could, it would right on get some sales and probably make me a whole 25 bucks a month, for the next two months, until such time as either;

- You spend all your income on stuff you don't need and cannot afford to renew your service.

- You offer packages you plainly cannot afford to offer (unlimited bw/unlimited space... It's just not possible) & you get an excess bandwidth bill that you plainly cannot afford to pay.

- You get bored and decide to take your money and run.

These are the main 3 reasons we see hosting fellowships disappear, and again are the main 3 reasons why on a day to day basis I see hundreds, if not thousands of potentially good customers visit small but expert hosting fellowships and avoid them because of their experiences with other small companies.

If you Want to start a hosting company, Do it right!

Hosting isn't a get rich quick scheme, and if you are only allocating 20% of your income to bills you won't grow, you will most likely fail. The first year+ all your behalf should be put back into the company to improve + offer better/greater services & products. Not marketing, avoid paying for marketing at all costs, because it doesn't matter how many population you get to your site, 99% of inherent customers will not even search for using your company if you have no reviews.

Your first year of being a new Hosting company should consist of the following;

- Discounts/Startup Offers: Offer great discounts to new users, There are a range of great forums/Websites which you can post all your offers.

- Offer your Services Locally: Ask friends/Family if they have ever opinion about beginning a website, let them know you have the services and skills to help them, you will be surprised at how many of your friends and house have opinion about it, but never well sat down to form it out, offer them extra discounts, one month free, 50% off. This may seem like a bad idea at the time, any way after the first month they may realise that it would be worth the small cost complicated and have no problems with paying for it.

- company Reviews: create a well designed email template Welcoming your new clients to your company. Ask if they have enjoyed their first month with your company and ask if they have any suggestions as to ways you could improve your company/level of service. Also Offer a discount off their next month of service if they are willing to write a present of your service on one of the major web hosting present websites (this is going to bring relieve and assurance to your future clients, so it is well worth the merge of dollars you lose in contribution discounts).

- Do Not Spend your income: Every Cent you make from selling services should be left in your bank/PayPal account. This way when your reparation for your domain/Service/Billing software license, anything it may be comes around, you will always have the money there to pay for it. No you will not make a profit, but that is not the introductory point of beginning a hosting company. It's a Long Term vocation goal.

- Research: Do a lot of it, find out what population want, find out what the latest and most services are and If You Can Afford To, bring them on-board, offer these new services and compete with the big fellowships for the possession to be crowned "king of" anything the new service may be.

Note: I said "If You Can Afford To" in capitals. This is a big factor in any decision. Forking out money you plainly do not have, or cannot by comparison spending is a great way to send your company into instant debt/failure. Having all the latest and most services won't necessarily make your company any good then the big hosts, you could behalf just as much contribution shared/reseller web hosting as an additional one tom could contribution everything the Internet has to offer. Providing you have the knowledge and you are willing to offer top ability retain to your clients. Your client-base will steadily grow, as will your net profits.

- At the end of your first year (no I do not mean December, I mean 1 year since you started your company) you should observation that your client-base has grown so has your bank balance. This is a good thing. Look into how much money your company has made over the last year, if it is a steady income that's excellent news, now I suggest you look into marketing opportunities.

What Not to do in the first year;

- Paid Marketing: Marketing is a big key to getting more clients. A lot of population believe that paying for marketing right away is a good idea, I would suggest you don't, as your company has no rep, your company is likely to waste every cent of it's advertising funds and make nothing back off it. Waiting a year before beginning to funds for marketing Is the best hint anything could ever make. With your company now having some reviews colse to and beginning to make a name for itself marketing is now right on what you are seeing for to growth your client-base.

- Spend your profits: I guess this can be ignored, providing you read the part above relating to "Do Not Spend your income". any way If you missed that, I shall tell you again... Do Not Spend Your Income. This is the only thing that will keep your company alive, so leave it in the bank!

- Offer more then you can well offer: Again, everything I am saying here is based on what I have seen happen the past few years in the hosting industry, I see too often new fellowships contribution "unlimited/Unmetered" packages, because they believe that someone is more inclined to buy something "unlimited" then something with limits. Again... You're mistaken.

The terms Unlimited & Unmetered ordinarily mean one of the following;

This company oversells it's servers and hopes that no clients will realise.
Or
This company is so new that it hasn't grasped the actual cost of bandwidth.

Upon saying that, I am not saying that All hosts which offer "unlimited/unmetered" solutions fit into the above two categories, just that the majority do.

- Make unneeded purchases: easy fact, if you do not need it, why buy it, this counts for Servers/Licenses/All web based services, if there isn't a desperate need for it "Right Now" then do not buy it, I'm not saying you offer services like Virtual incommunicable Servers, wait for someone to buy one then rush off and buy a dedicated server to set them up on. That is just not expert and your clients will soon start to leave.

What I mean is, If you have a dedicated server, and your are 3/4 full with Virtual Servers, but you only sell one Vps Every 3 months. There is no rush to go out and buy an additional one server right now and get it configured for new clients, and let it sit there for 8 months before it is used, that money could be put to alot of good uses.

Providing you pay attentiveness to your company, ensue the trends of client sign-ups and client cancellations, you should be able to work out when the best time to buy added services to handle your company growth without interruption.

starting a Web Hosting enterprise - The Dos and Don'ts

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