Starting your own Web Hosting Business – Part 1

By Ashish Monga

Very often, once a Webmaster has been in different online businesses long enough, shifting from different kinds of hosting accounts, and trying things like owning dedicated servers, they are inclined to think about starting their own web hosting business. There was a time when starting a web hosting company was a complex issue, and it was important to have solid technical knowledge for successfully running a web hosting business, but now with the introduction of things like, re-seller packages, easy to control and manage Cpanels, people with very little knowledge of the technical aspects of web hosting are getting into it. Although it is easy for someone with little technical knowledge to start a web hosting company, how successful it would be really depends on two very important factors:

1. Support : This is where technical knowledge comes in handy. Setting up an account for someone is one thing, but actually providing quality support, especially in complex situations, that might require adjustments that are beyond control panel, is another.
   
2. Level of Operation : Are you planning on going large scale, buying your own servers and then selling hosting packages, or are you just considering selling re-seller packages? It is better to start off with the latter and then after you have gained some experience, move onto the first one. Selling re-seller packages might need more of business skills, than technical skills, as usually support on most issues, will be provided by the parent company.

The factors that you will need to consider and actions you will need to take before you can begin your own web hosting business can be broadly broken down into business factors and technical factors.

Business Factors

• Define your Target Market : Most hosting businesses cater to specific target markets, for e.g. small websites, sites and services needing dedicated hosting, etc. It is crucial to define your target market, and decide the level at which you want to operate at, i.e. whether you want to be a reseller or provide complete hosting solutions, or want to be somewhere in between.

• Draw Up a Business Plan : Drawing up a business plan is vital to any business, online or offline. It is important to clearly state your goals and objectives, your requirements, assess your cash flows, and most importantly determine the amount of money you will require to start-up. This is also necessary in order to apply for any loans, should you need one.

• Legally Establish the Business : Legally establishing the business is the next step, whereby you need to decide the legal status of your hosting business. Many hosting companies do not bother to do this, although Internet law is getting more and more strict with each passing day and hence it is better to be on the safe side.
  
• Marketing : Establishing your brand name is the next most important thing. On the net this can be done either very quickly, or it can be a very tedious process, depending on your budget. You need to know where your target customers hang out on the net, and what are the best methods to reach them. You also have to decide what part of your total budget are you willing to spend on the marketing.

To learn more about the technical aspects of starting a web hosting business, please refer to part two of this article.

Read Part 2

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