Part II (2) . How to Start Your Own Web Hosting Company.

Part II (2) . How to Start Your Own Web Hosting Company.

In Part I, we discussed some of the things you’d need to consider (and get your hands on) if you wanted to start your own web hosting company.

Here are some more essentials before you can start:

Pricing scheme: You should set a reasonable price. One that people can afford, but don’t try to be the cheapest either. You probably can’t (and shouldn’t) compete with hosts that can offer dirt cheap prices because they’re probably overcrowding their servers and offering poor service.

Terms of Service (TOS): Also known as service level agreements. You can get an idea of what to put in your terms of service agreements from the Webhosting Talk forum thread Starting my hosting company.

Billing and Accounting: You should consider getting payment for services in advance (at least a month). Also, you need to keep your finances in order. Consider getting a third-party service when getting merchant accounts to minimize liability (particularly when handling credit card numbers).

Some things to keep track of (and anticipate):

* Server Monitoring: You need to know immediately if a server goes down (try Alertra to monitor your equipment)

* Redundancy: Backup, backup, backup. All data kept in your servers, as well as (and especially when it comes to) your main connection to the Internet (in case it goes down).

* E-mail List: You need to notify you clients in advance in case of scheduled or un-scheduled outage or other service interruptions, so an e-mail list, kept preferably off your own servers, is essential.

* Problem Customers: Dealing with them can be time-consuming. You can minimize your chance of having to deal with them by paying special attention to your pricing scheme (too cheap and you get customers with little understanding of how the business works) and TOS (can include a clause allowing you to terminate the accounts of overly obnoxious/abusive/rude customers).

* Security Issues: You need to keep your servers up to date with the latest security patches and turn off all unnecessary applications (as they also open your servers to both hacking and virus/worm attacks)

The following forum threads also offer additional insights to keep in mind:

* Want to Start a Web Hosting Company

* What is needed for a hosting company?

* Starting a UK web hosting company

* Wanting to Start a Webhosting Business

* starting a hosting company

Highlights of DOs to consider:

* Get a good accounting software/system

* Invest in good control panel

* Go reseller first before going dedicated

* Invest in good web design (avoid using templates if you can)

* Have a detailed business/marketing plan (as it is the basis of your every move), it should enable you (and the bank) to clearly see the direction of your company

* Keep track of hidden fees

* Choose merchant solutions carefully

* Use managed servers if you’re low on tech skills

* Pay attention to bandwidth (T1 is slow, anything lower is widely shared so won’t perform well, high-ends are expensive)

* Pay attention to potential liability issues (such as insurance, TOS, consumer rights, etc)

Of course, all those money, time and infrastructure investments are no good if you don’t have customers. So how do you go about building your client list amidst intense competition?

1. Offer a server product that caters or targets (a) small community/ies or niche. Make sure you develop a good reputation in that community by meeting their specific needs.

2. Target small business in your area. Offer them better deals (good prices and personalized service) because chances are, they get their hosting from the local ISP (who probably over-charge them for it because it isn’t theur speciality).

3. Develop relationships with web designers. Get them to recommend your service to their clients.

4. Take advantage of your own personal network. After all, don’t you prefer to do business with people whom you know personally, rather than companies from who knows where? People tend to feel more secure if they know that you aren’t likely to take advantage of them, because they probably know where you live :-).

5. Do the rounds in web hosting forums. Make use section that match clients with hosts’ offers. Just make sure you don’t under-price your services.

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