Lets say you offer 100GB on a server that costs $1500...

100GB would be between $150-300 per month...
Normal startup fee in cases like this is about $100-300, right?

350-500 would seem like a reasonable monthly rate...

Do you simply take money from your own pocket to buy the server, and hope they stay with you long enough to covers your server with the monthly fee of $350?
In other words, you wont start making money from the customer untill:

$200 startup + 4 months
$200 + ($350 x 4 months) = $1600

Is this how you do it, or am i missing some vital information here?

I would like to know this as well!:D

it's called working capital ;)

Originally posted by the--dud
Lets say you offer 100GB on a server that costs $1500...

100GB would be between $150-300 per month...
Normal startup fee in cases like this is about $100-300, right?

350-500 would seem like a reasonable monthly rate...

Do you simply take money from your own pocket to buy the server, and hope they stay with you long enough to covers your server with the monthly fee of $350?
In other words, you wont start making money from the customer untill:

$200 startup + 4 months
$200 + ($350 x 4 months) = $1600

Is this how you do it, or am i missing some vital information here?

I would assume this is how it works for at least some of the companies offering their services from a dedicated server.

There's always business equiptment leases (in this case servers), though I'm not sure which is bettter/worse.

Yes, it is true that you can lease the servers, but this is not always a good idea. While it may keep your expenses down per server, you end up paying more in the long run. And, if you get yourself really going, you will find a lot more headaches in securing leases for each server unless you do a large batch up front.

Purchasing a server (or parts and building them up) allows you to keep your servers up with technology. You don't have to worry about modifying the lease equipment (unless you plan on purchasing at the end).

Best advise is do not start selling dedicated unless you have working capital. You can get yourself into 2 and 3 year commitments with leasing and if you go out of business, you are going to be personally liable for the lease. Most companies under 5 years need to have the leases with a personal guarantee, so you may want to think twice about having your credit on the hook for 30,000 worth of equipment.

If it was only that simple..... The cost of the server in only part of the equation. There is power, bandwidth,rack space, support equipment like switches and routers, remote power cycle, administrative (office) overhead including 800 numbers, billing software and of course sys admin salaries.

Our actual cost of running a dedicated server is not something I care to publicize, but some basic math using the above will get you a lot closer.

Should you or your provider choose to ignore these overhead costs as trivial then you can join the ranks of those that A) went under or B) provide lousy service.

Tom

Originally posted by the--dud
Lets say you offer 100GB on a server that costs $1500...

100GB would be between $150-300 per month...
Normal startup fee in cases like this is about $100-300, right?

350-500 would seem like a reasonable monthly rate...

Do you simply take money from your own pocket to buy the server, and hope they stay with you long enough to covers your server with the monthly fee of $350?
In other words, you wont start making money from the customer untill:

$200 startup + 4 months
$200 + ($350 x 4 months) = $1600

Is this how you do it, or am i missing some vital information here?

Theres a flaw in your equation. $350 a mo. - $300 for bandwidth leaves you $50 a month.

$200 startup + ($50 x 26 months) = $1500

Thats what it would work out to but most servers wont eat up the 100g you give them at least not at first and the $$ used for the servers is working capitol used to increase the monthly revenue bottom line.