Is it worth to start a small web hosting business?

Discussion in 'Web Design and Development' started by mikemodena, Apr 17, 2006.

  1. mikemodena macrumors 6502a

    mikemodena

    Joined:
    May 30, 2005
    Location:
    Connecticut
    #1
    It's an idea I've had for a long time and I really want to make it happen. It's possible with just a few hundred dollars investment to start. www.server4you.com has some great dedicated server plans. I'd start with the starter plan and upgrade when the demand calls for it. It comes with Plesk, so I would be able to set up a DNS server and allow for a customer to point their domain name to my DNS servers, and then in Plesk creating a new account is simple which gives them Plesk login access to manage databases, email, ftp logins, etc. I could give them the SSH option to sell as a virtual private server, or just ftp as basic hosting. Is this a profitable thing to do? Would I be able to get any customers or is this market too over-saturated? I'm looking to sell at low prices and add servers when they are necessary. According to my calculations in order to make a little bit more than breaking even I would need about $100 a month in sales per server I buy. Is that a possible goal?
     
  2. theappleguy macrumors 6502

    Joined:
    Apr 19, 2005
    #2
    The market is certainly oversaturated. However, it is oversaturated with pathetic excuses for hosts, so if you can offer good support and reliable services you will be a step above 75% of other hosts. Also, look at finding a niche or something that makes you unique because there is no sense in trying to compete on price. :)
     
  3. miniConvert macrumors 68040

    miniConvert

    Joined:
    Mar 4, 2006
    Location:
    Kent, UK - the 'Garden of England'.
    #3
    I wouldn't say there's a lot of money in it, but if you have the knowledge to be able to offer really in-depth support then it's certainly worth a shot. These things tend to lead you in various other directions anyway - everyone has to start somewhere.
     
  4. JLatte macrumors 6502

    Joined:
    Dec 2, 2005
    Location:
    San Diego
    #4
    As someone that did co-start a web hosting business, it involves a hell of a lot of time. Essentially, if you're a busy person, you're not really going to be able to run 24/7 tech support. Are server4you's dedicated servers managed? If so, that's not a problem, if not, you're going to be having customer issues should the server ever go down. Not having 24/7 tech support is also an issue with clients, outsourcing to India is much easier, sadly.

    The other issue is that the market is oversaturated with webhosting companies. SEO (Search Engine Optimization) gets costly if you pay a company to assist you. We spent thousands of dollars in advertising and SEO.

    It's quite an investment of time and money to effectively start a web hosting company, but it can be worthwhile once you get the ball rolling and start to know the ropes. One tip, offer large amounts of hard drive space at very cheap prices. Average users don't use all of their assigned space, but will buy at the idea of a lot for a little. Best of luck to you.

    - Josh
     
  5. obeygiant macrumors 68040

    obeygiant

    Joined:
    Jan 14, 2002
    Location:
    totally cool
    #5
    You could be a host and outsource the tech support to India so you could increse your profit margin. Read "The world is flat" by Thomas L. Friedman...
    or buy the audiobook from iTunes.
     
  6. D0ct0rteeth macrumors 65816

    D0ct0rteeth

    Joined:
    Mar 11, 2002
    Location:
    Franklin, TN
    #6
    Friggin; FANTASTIC book!!!! Everything that guy writes is gold!!!

    and yes, I run an hosting company - but I really don't make much at it.
     
  7. JLatte macrumors 6502

    Joined:
    Dec 2, 2005
    Location:
    San Diego
    #7
    Very true. Essentially, you could start up a small hosting company without having to manage practically anything at all. Once you obtain the managed servers, the data center should make sure that your servers remain online. Once that's up and running, outsource to India, for technical support, there's plenty of Indian companies that specialize in Plesk support which you will need. After all that, you basically just sit back. A good merchant account that will automatically set up clients onto a server and activate their accounts helps too, lol. We didn't have automated when we started, which was the worst experience ever. We also overpopulated our server which resulted in Plesk overloading and crashing constantly in the beginning. Word to the wise, don't try to stick say 300 people with 5 - 150 GB plans on a 500 GB server, it doesn't work. ;)
     
  8. mikemodena thread starter macrumors 6502a

    mikemodena

    Joined:
    May 30, 2005
    Location:
    Connecticut
    #9
    I decided to put this idea on the backburner.. doesn't seem worth the investment. I've just been trying to find something on the side to bring in a little extra money. I had been doing web design but I browse Craig's List every day and respond to like 20 ads and never get a response. I started in the summer and I was able to find a few jobs per month but now I can't get anything. Sucks, really. I think I have a pretty strong portfolio.

    Edit: Amazing.. as soon as I posted that I got an email, and the guy just wants to trade a website for CS2 Suite. Any worthwhile web designer already has it. :/
     
  9. obeygiant macrumors 68040

    obeygiant

    Joined:
    Jan 14, 2002
    Location:
    totally cool
    #10

    good luck getting it on your computer with the new anti-piracy technology.
    Cuz technically you can only have it on TWO computers under the same roof.
    or is she buying you the whole new suite?
     
  10. mikemodena thread starter macrumors 6502a

    mikemodena

    Joined:
    May 30, 2005
    Location:
    Connecticut
    #11
    I didn't even take the job.. I already bought the creative suite. This guy is looking for a pretty detailed site and he's not gonna find someone to do it right that doesn't already have it. I gave him a reasonable price so I'm sure when he finds out the hard way he'll send me another email.
     

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