Starting and Running a Web Hosting Business – Part One

SLDALThere are many qualities that are required in an individual for them to start and grow their own successful web hosting company on their own from the start.  Many people see web hosting as something that is simple to provide and requires little to no work which couldn’t be further from the truth.  There are many aspects of web hosting that the average first-time web host will not plan for or even think about such as their web site which can be simple but is very important if you are to function as an online business.  Other aspects of running a web hosting business range from obtaining the correct licensing as required by local laws to having a basic understanding of business management and accounting.  While most are not a jack of all trades, they can often get by based upon what they know and have people they can ask for help if they need it.

The most important quality required in a person starting their own web hosting provider is resourcefulness – when you are new to hosting there are certainly going to be roadblocks that you come across and questions that you do not know the answers to.  Being resourceful means that even if you don’t know the answer immediately you know where to look to find the answer.  The vast majority of support issues that clients raise could be answered simply by visiting and typing in the question or a description of the issue.  Unless you are an expert on everything (keep dreaming) then you either need to be resourceful or you will very quickly find yourself being asked questions you cannot answer which leads to very unhappy customers and bad reviews.

The second most important quality required is good business sense – such as knowing that offering unlimited master reseller accounts for $7/month is not going to lead to anything but a quick rise and and even quicker fall. It is very important that any entrepreneur sits down and writes up a solid business plan setting both short-term and long-term goals as well as planning out how the business is going to achieve these goals.  While it is possible to start a business and be successful without a business plan it is highly unlikely and I would say personally that it is the exception to the rule.  Without a business plan not only is it impossible to know if you are getting where you need to be but it is impossible to determine what changes should be made to help meet any goals that you may have in mind.  You need to be able to make the big decisions without having to go to your friends, family, or others in the hosting industry to ask them what they suggest.

The third most important quality is a basic understanding of marketing. Many new hosting providers try to compete on price with the major players in the industry which is another issue that anybody with solid business sense is going to know from the start is simply not going to work 99% of the time.  Larger providers are able to offer more features and resources at lower prices simply due to their ability to obtain hardware, software licenses, and other necessary tools at much lower prices by dealing in bulk.  As a small provider you will not have the ability to get such good deals on your resources and as such attempting to compete on price with the larger providers in most cases will lead quickly to the demise of your company.  Understanding the basics of marketing will help you not only get your company’s name out there but will also help to convert potential customers that do make it to your web site.

I will post more on Starting and Running a Web Hosting Business within the next few days so be sure to check back for Part Two!


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