Although the market is saturated with a gazillion of web hosting providers, there is still money to be made in this niche. You will need to ‘play’ smart and provide an excellent service. Here are some ideas to get you started.
Who can be a web hosting provider?
ANYONE. If you have at least a basic idea about how web sites work and are passionate about this type of business, you can create a nice passive income stream for yourself. You will have to learn more on the job though, hosting web sites is not that easy and, even if you actually resell a service, you do need to understand how it all works.
I have personally done this type of business, as an added service though. It’s not too tough to set up, it can be done with small costs and, if you are serious about it, there’s money to be earned.
What do you need to start?
- web hosting plan – a reseller account, a VPS or a dedicated server. I am a firm believer in keeping costs down, so I will never advise anyone to jump and get some huge hosting plans. I was able to get my small reseller plan paid by my clients (and few bucks extra), without actually promoting my web hosting services too much. My money usually comes from web design, so this is just a ‘bonus‘ service I provide.
- your own web site – in this case I advise you to either create a proper web page or hire a web designer. A free / premium template might not do the trick, since it will ‘scream’ unprofessional. You are dealing with people who are at least in theory web savvy, so you need a custom unique design.
- a web hosting management solution. I do recommend WHMCS, it’s a very powerful solution and, once set up properly, it will help you tremendously with your clients / web hosting accounts management. Some web hosting providers offer a free license for reseller plan owners, so you might actually not have to pay for it.
How to make money as a web hosting provider?
It’s not too hard: you get a web hosting plan, you ‘break’ it in smaller plans and charge people for it. Make sure you earn more in total than what you have to pay yourself.
Now this is tricky … you need to have a GOOD PRICE and yet not leave too much money on the table. You will not be able to play the ‘unlimited’ resources game, since your web hosting plan that you ‘slice’ to sell is actually limited, and you cannot battle the huge providers, since .. well .. you are small.
But there is one issue most clients have with some huge hosting companies and this is called SUPPORT. You can earn a lot of business by providing the best support you can, by being fast and knowledgeable.
This is where you can win the battle, since most of the big players in this market have made many customers unhappy with their slow ‘artificial’ support. If you can provide a ‘personable’ support system, be fast and knowledgeable when your customers have problems, you will get a good business running. I personally know people who have built successful web hosting businesses by really taking care of their customers, even if they don’t have the smallest prices.
My own web hosting experience hasn’t been all ‘happy’. I have started paying for hosting 10 years ago and changed many providers. At the end of the day, what really mattered for me was UPTIME (no one wants their sites offline) and support. I am currently paying separately for a web site of mine (and not the smallest fees I could find), just because the support has been more than stellar and it’s worth the extra bucks.
This is why, even if you can start without knowing too much about the business and the tech side, it’s important to learn a lot, so that you can help your customers.
You might have noticed that I don’t recommend starting out with your own server (self-hosting), since that costs more and you need to know A LOT about server security, not to mention you will need to be 24/7 on the job (or pay someone). I always recommend to start with re-selling web hosting services, letting others manage everything, while you keep your customers happy and solve minor issues.
It’s a good idea to prepare a nice affiliate system, since this will allow you to get more customers by having your affiliates promote your business.
When it comes to the actual promotion: be active in various web design / development forums, be supportive and nice. I never paid for my promotion, just being a good member in some of the top communities (SitePoint, NamePros, DigitalForum etc.) helped me get my clients.
1. get a web hosting plan (I recommend anything with cPanel on it). I’d start with a reseller plan (it’s about 24 bucks/month). You can always get more resources or purchase additional plans once you start earning money.
2. create a web site to advertise your plans. Get a web hosting accounts / clients solution up (maybe WHMCS)
3. create a pricing plan and few account ‘sizes’. Do not go with ‘unlimited’, we all know there is no such thing.
4. start promoting your services.
5. take care of your new customers, always be in touch with them, when they need support. By providing an excellent support, you will be able to earn more money / business.