Starting your own hosting business is one of those things that seems so simple, you wonder why everyone isn't doing it. While there is plenty of competition, there is plenty of room to grow. Starting your own hosting business can be cheap, easy, and safe. Since every company, and many individuals, need their own websites, providing hosting services can generate significant returns.
If you are a company that deals with IT infrastructure or web design, adding a hosting service to your existing platform can bring in new revenue and clients to add sustainable growth to your business. A hosting company can bring in new revenue streams and products to offer upcoming clients if you are just getting started.
But why bother starting your own hosting business when your plate is already full and your business is running fine?
3 Reasons to Start a Hosting Business
Here are some of the best reasons to start offering hosting services to clients:
1. It’s Easy
Really, the web hosting provider is doing most of the legwork. They handle the technical difficulties that scare most people away from the industry, and keep services running smoothly. All you have to do is keep your individual clients happy and provide the right hosting solutions for them and their organization. Once it’s running, most websites tend to keep running without much effort or expertise.
2. Additional Revenue
Starting a hosting business can put extra padding in your pockets without losing your day job or adding unreasonable amounts of work. Aside from the initial setup and registering new clients, you can simply watch your bank account grow. An overhead price that covers your costs and brings in decent cash flow keeps costs and prices straightforward for you and your clients.
3. Great Upsell for Digital Firms
If you already run a digital business, especially web design, then throwing hosting into your package makes your service more “all-inclusive.” This could give you the edge you need over competitors and can make you a bigger and stronger organization. By offering hosting to your clients directly on your own platforms, or without having to manage separate users on separate hosting providers, you simplify things like account management and software solutions that must be installed on client machines.
To top it all off, it's easier than you think to get started. In fact, you can have your own hosting business up and running after only 5 simple steps.
How to Start Your Hosting Business in Five Easy Steps
1. Find Your Niche
In the web hosting business, competition is fierce. You won't be able to compete with the giants of the industry (at least not yet), but you can still target a specific niche group and start growing from there.
It's essential to offer something unique to separate yourself from other companies and make your organization more distinct. That could be an additional service like web design, a competitive or revolutionary pricing plan, or maybe you'll target a specific community (like webcomics or homemade jewelry stores).
It's important to separate yourself from the crowd and cater to unfulfilled needs. By finding a great niche, you can offer custom solutions that fulfill their needs and aren't offered anywhere else."
Whatever your niche turns out to be, it's necessary to figure it out first before you get into your hosting business's nitty-gritty. This will give you the upper hand against competitors and help jump start your business by offering services to a specific industry.
2. Research Competitors
Next, you want to separate yourself even more from other hosting companies within your niche. Ideally, you will want your offering to be so unique that you'll have no competition… but that's rare. Even if you're specializing in your market, you'll still have more than a few competitors.
Research competitor business models and see what they're doing that works, and where there's room for improvement! Analyzing your competitors is the best strategy for discovering ways to outdo them."
This will give you an advantage when providing new services, looking for clients, and identifying marketing techniques and product offerings. Because the hosting industry is fiercely competitive, it's important to gather as much information and data as possible to separate yourself from the crowd.
3. Choose Your Server Type
Assuming you're reselling server space from a hosting company like Liquid Web, as opposed to building your own server in your garage, you still have a few different options to choose from.
As the name suggests, a dedicated server is a server dedicated to a single client. While the features are extensive, it’s the most expensive type of server. A single machine provides more robust features for larger clients, including the ability to have more security or HIPAA Compliant Hosting.
A dedicated cloud server is a great tool because you don’t have to worry about scaling your server or infrastructure — even with an unexpected spike in traffic, performance remains consistent. While not as expensive as dedicated hosting, dedicated cloud hosting falls somewhere in the mid-range, in terms of pricing.
A Virtual Private Server is a single server (cloud or otherwise) that is partitioned to suit multiple systems. While space is limited, it’s easily the cheapest option, and a good place to start for beginners in the hosting business. This will allow you to host multiple clients on one system to keep costs slow. But features may be more limited than other types of servers.
Cloud Servers, or public cloud hosting, is a highly available and scalable cloud solution that pools resources from across multiple servers using virtualization. This is optimal for websites with unpredictable traffic, fast-growing startups, or small eCommerce portals.
There is no one "best" server type. Instead, you'll want to choose the one that fits together with your niche and business model.
It's best to stay away from shared hosting for your infrastructure, as it won't provide the performance, security, or scalability you will need to grow.
4. Create a Business Model
Now let's get into the "business" part of the hosting business. You'll need to fine-tune the details of your niche marketing as well as invent your brand.
In this stage, you need to finalize plans for the following:
This includes your company name, logo, and tagline. Be aware of which domain names are available since you’ll inevitably need to build a company website. Your name should be memorable and easy to find.
Hammer out the details of your pricing plans to find that sweet spot between how much the hosting infrastructure costs you, and how much your clients are willing to pay for your services. This can also play into your niche marketing if you’re trying to undercut the cost of your competitors.
As with all digital industries, your web hosting company’s website is it’s the main storefront, so spare no expense in making it top notch. The quality of your website can reflect the quality of your services, so make strides to make it the best it can be.
5. Launch Customer Service and Support
Customer service and support is optional in theory, but in reality, it's so important that it's practically a necessity. Consider handling customer service and support as part of your hosting business.
In the web hosting business, part of your appeal to potential clients is that they don't need to worry about the technical concerns. Even for hardware engineers, these tidbits can get frustrating, so you can imagine the anxiety it causes laypeople. Clients rely on you to keep their websites and services up and running without a hitch.
If you aren't able to provide this level of customer satisfaction, clients may choose to host their websites somewhere else.
Customer service should be a top priority for your new hosting business. That's why we here at Liquid Web invest so much into our Support Team so they can be the Most Helpful Humans in Hosting. Our customer support is what endears us to our clients and keeps them loyal.
Features like our 59 Second Guarantee and 24/7 access not only set us apart from our competitors but also turn what could be a negative customer experience into one of our company's greatest strengths.
When you are hosting your infrastructure with us, your clients gain the benefits of our support programs, and it can take some of the load off your back in the process!
You're Ready to Resell Hosting
Now that you know the 5 steps for forming your own hosting company, you can get started today! You have found your niche and researched competition, selected servers, and defined pricing plans, and understand the need for customer service, so you can start reselling web hosting.
Start Reselling Hosting Today
Liquid Web has a Reseller Program that is a perfect fit for those looking to resell hosting. Or download our Hosting Buyer's Guide to learn more about your hosting options.
Todd Terwillegar is the Digital Content Marketing Manager and Editor-in-Chief for the Liquid Web Blog, helping growing web businesses and enterprises thrive with the latest trends and technologies. Todd has been published with several global brands on the topics of marketing, SEO, and blogging, including Nexcess & Uberflip. You can follow Todd on LinkedIn.
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