| Hello, | | | | find out what the latest and greatest services are |
| I decided to write a article after seeing a post on | | | | and IF YOU CAN AFFORD TO, bring them on-board, |
| well known forum. The post read: | | | | offer these new services and compete with the big |
| Hello | | | | companies for the rights to be crowned "king of" |
| If you decide to work with me I am quite flexible on | | | | whatever the new service may be. |
| the money split as long as its not a stupid split. I'm | | | | Note: I said "IF YOU CAN AFFORD TO" in capitals. |
| happy to do 50/50, 40/40/20(bills) etc. | | | | This is a big factor in any decision. Forking out money |
| This was from a user who was looking to start a | | | | you simply do not have, or cannot justify spending is |
| hosting company. He/she owned a domain name & | | | | a great way to send your company into instant debt |
| had purchased a "unlimited reseller hosting account" | | | | failure. Having all the latest and greatest services |
| from another small company. I refuse to mention any | | | | won't necessarily make your company any better |
| names here. However, this person's partnership was | | | | then the big hosts, you could profit just as much |
| only requesting someone to cover the costs of the | | | | offering shared/reseller web hosting as another tom |
| WHMCS license. I mean, If I was a kid trying to | | | | could offering everything the Internet has to offer. |
| make a quick buck, this would seem like the perfect | | | | Providing you have the knowledge and you are willing |
| opportunity. Spend $13 a month, spend about 5 hours | | | | to offer top quality support to your clients. Your |
| a day and advertise everywhere I could, it would | | | | client-base will steadily grow, as will your net profits. |
| definitely get some sales and probably make me a | | | | - At the end of your first year (no I do not mean |
| whole 25 bucks a month, for the next two months, | | | | December, I mean 1 year since you started your |
| until such time as either; | | | | company) you should notice that your client-base has |
| - You spend all your income on stuff you don't need | | | | grown so has your bank balance. This is a good thing. |
| and cannot afford to renew your service. | | | | Look into how much money your company has made |
| - You offer packages you simply cannot afford to | | | | over the last year, if it is a steady income that's |
| offer (unlimited bw/unlimited space... it's just not | | | | excellent news, now I suggest you look into |
| possible) & you get an excess bandwidth bill that you | | | | marketing opportunities. |
| simply cannot afford to pay. | | | | What NOT to do in the first year; |
| - You get bored and decide to take your money and | | | | - Paid Marketing: Marketing is a big key to getting |
| run. | | | | more clients. A lot of people believe that paying for |
| These are the main 3 reasons we see hosting | | | | marketing straight away is a good idea, I would |
| companies disappear, and again are the main 3 | | | | advise you don't, as your company has no rep, your |
| reasons why on a day to day basis I see hundreds, if | | | | company is likely to waste every cent of it's |
| not thousands of potentially good customers visit | | | | advertising budget and make nothing back off it. |
| small but professional hosting companies and avoid | | | | Waiting a year before starting to budget for |
| them because of their experiences with other small | | | | marketing Is the best suggestion anyone could ever |
| companies. | | | | make. With your company now having some reviews |
| If you WANT to start a hosting company, Do it right! | | | | around and starting to make a name for itself |
| Hosting isn't a get rich quick scheme, and if you are | | | | marketing is now definitely what you are looking for |
| only allocating 20% of your income to bills you won't | | | | to increase your client-base. |
| grow, you will most likely fail. The first year+ all your | | | | - Spend your profits: I guess this can be ignored, |
| profit should be put back into the company to | | | | providing you read the part above relating to "DO |
| improve + offer better/greater services & products. | | | | NOT Spend your income". However If you missed |
| Not marketing, avoid paying for marketing at all | | | | that, I shall tell you again... DO NOT SPEND YOUR |
| costs, because it doesn't matter how many people | | | | INCOME. This is the only thing that will keep your |
| you get to your site, 99% of potential customers will | | | | company alive, so leave it in the bank! |
| not even contemplate using your company if you | | | | - Offer more then you can ACTUALLY offer: Again, |
| have no reviews. | | | | everything I am saying here is based on what I have |
| Your first year of being a new Hosting company | | | | seen happen the past few years in the hosting |
| should consist of the following; | | | | industry, I see too often new companies offering |
| - Discounts/Startup Offers: Offer great discounts to | | | | "unlimited/Unmetered" packages, because they |
| new users, There are a range of great forums | | | | believe that someone is more inclined to purchase |
| Websites which you can post all your offers. | | | | something "unlimited" then something with limits. |
| - Offer your Services Locally: Ask friends/Family if | | | | Again... You're mistaken. |
| they have ever thought about starting a website, let | | | | The terms Unlimited & Unmetered generally mean |
| them know you have the services and skills to help | | | | one of the following; |
| them, you will be surprised at how many of your | | | | This Company oversells it's servers and hopes that |
| friends and family have thought about it, but never | | | | no clients will realise. |
| actually sat down to figure it out, offer them special | | | | OR |
| discounts, one month free, 50% off. This may seem | | | | This Company is so new that it hasn't grasped the |
| like a bad idea at the time, however after the first | | | | actual cost of bandwidth. |
| month they may realise that it would be worth the | | | | Upon saying that, I am not saying that ALL hosts |
| small cost involved and have no problems with paying | | | | which offer "unlimited/unmetered" solutions fit into |
| for it. | | | | the above two categories, just that the majority do. |
| - Company Reviews: Create a well designed email | | | | - Make unneeded purchases: Simple fact, if you do |
| template Welcoming your new clients to your | | | | not need it, why buy it, this counts for Servers |
| company. Ask if they have enjoyed their first month | | | | Licenses/All web based services, if there isn't a |
| with your company and ask if they have any | | | | desperate need for it "Right Now" then do not buy |
| suggestions as to ways you could improve your | | | | it, I'm not saying you offer services like Virtual |
| company/level of service. Also Offer a discount off | | | | Private Servers, wait for someone to purchase one |
| their next month of service if they are willing to | | | | then rush off and buy a dedicated server to set |
| write a review of your service on one of the major | | | | them up on. That is just not professional and your |
| web hosting review websites (this is going to bring | | | | clients will soon start to leave. |
| comfort and assurance to your future clients, so it is | | | | What I mean is, If you have a dedicated server, and |
| well worth the couple of dollars you lose in offering | | | | your are 3/4 full with Virtual Servers, but you only |
| discounts). | | | | sell one VPS Every 3 months. There is no rush to go |
| - DO NOT Spend your income: Every Cent you make | | | | out and buy another server right now and get it |
| from selling services should be left in your bank | | | | configured for new clients, and let it sit there for 8 |
| PayPal account. This way when your renewal for | | | | months before it is used, that money could be put to |
| your domain/Service/Billing software license, | | | | alot of better uses. |
| whatever it may be comes around, you will always | | | | Providing you pay attention to your company, follow |
| have the money there to pay for it. No you will not | | | | the trends of client sign-ups and client cancellations, |
| make a profit, but that is not the initial point of | | | | you should be able to work out when the best time |
| starting a hosting company. It's a LONG TERM Career | | | | to purchase additional services to handle your |
| goal. | | | | company growth without interruption. |
| - Research: Do a lot of it, find out what people want, | | | | |