How much is required to startup a webhost, and make it profitable quickly? Do I spend more on the servers or on advertising? Should I even bother starting a host in a saturated market?

The market is far too saturated to do anything with now-a-days. Unless you're looking for a time intensive hobby, I would find something else.

Base on your first two questions the third one is easy to answer: don't bother.

It would seem that running a Web Hosting business is not quite within your grasp at the moment. To start now would probably cause more problems for you & Clients, than what it is worth.

Cool. Thanks

Discouragment, why people? Anyhow, if you got the drive in you to start a webhosting company, have the necessary skills to manager servers, respond to customers, be sleepless for nights, solid business plan and even stronger frame of mind then start or else you wouldnt last long and would waste your resources, forget profitability for first 6-7 months or more. :)

go back to 4 years ago you may get a chance to success, now is too late.

Nope its not. I disagree to the sucees part.
You can succeed in anything if you try hard enough and make the right moves.

Determination, "Never die" attitude, a good business plan and some good support... ( its lonely here when you are all out alone.... )

And just for laughs, Be prepared to starve for some months too :P

-- PS. When I said alone it does not mean "ALONE" you can have hundreds of staff but you can still be lonely because you have no one to discuss your business plans with.... And I mean serious discussions....

I agree with you galacnet. First invest in learning, invest in your mindframe :D invest in spending time coming up with a unique USP, invest yourself totally then your money, where your not gona invest yourself and your time why your money?

So. I have really missed the boat. Oh well, I might only do limited hosting for my mates and clients.

I have spoken to many hosts that have just started out by hosting mates, and they now have over 200 clients.
So maybe that's a good way to start out at first. :)

nzbm, you havent missed the boat! There is always space for a good reliable host, starting out will be difficult but then you will steady yourself, as ChrisMayhew said start out hosting mates and then grow as word of mouth spreads! dont loose hope before you even start something!

Yeah :D go for it.
But do plan your steps first.... even though it can seem easy to start it is also easy to get wiped out :P

So are you going to start with a reseller? a deciated server? Co-Lo? Leased Lines? Buy a small company over? Partnership? There are always so many options to go for :)
You have to make the choice :D

Thanks for the encouragement Yaser. I think I am going to have to spend time researching how to run a host and utilise these forums alot. I will have to plan what I am doing, write a business plan etc. Yeah, so maybe hosting mates is a good way to start a niche host.

LOL If I do a business plan, I should write a HOW-TO on one. galacnet, I think I'll start off on a dedicated server, but my business plan will deal with that in detail. I'll have to examine my options.

ive recommended this website maybe 1000 times before :D but im not going to stop recommending it
http://thewhir.com/reseller/

Pls go here and read all the reseller hosting guides, very very helpfull i must say as you will find out! These forums are a good way to learn :) Nothing is hard just be ready to commit yourself nzbm :) if you need any help pls ask me do NOT hesitate. :D

nzbm , are you from New Zealand by any chance?

Well , if you have a lot of money for advertising then yes get into this industry , just remember you will be competeting with 1&1 ( very large webhost ) etc .

Good luck :)

Web hosting is the type of industry that sounds like its really fun to be in until you're so far invested that theres no turning back. ;)

"All the doors behind me are closed shut, locked and welled together......" :p LOL

The Whir truly is a great resource. Thanks for you help Yaser.

Its a customer oriented type of industry i feel not to forget service, but happy customers play a vital role in your success as well as your advertising (word of mouth). if you take it as a hobby and passion then you wont feel its work! and you will fair well too.! :)

Yes I am from New Zealand. I have no aims to compete with big hosts. Just start in niche hosting and move on to the larger accounts and clients as they come.

Its a hard industry to enter and get going , as in the first months you need to cover costs in order to carry on ....

true LoganNZ, thats mostly true for most businesses, you just goto hang in and service your customers well. To start off galacnet can give you advertising that will suit your budget. nzbm also checkout www.marketingfind.com very resourcefull! :) and btw your ALWAYS welcome :)

You'd probably want to have a reseller account or something where you don't have to worry about sitting next to a phone (or having someone else that you're paying a salary to) for support... Advertising is your biggest issue and you do have to compete with companies like 1&1...

My advice is to concentrate on your local market. It also gives you the advantage that as you grow and get busier with customer support, etc - at least your customers generally eat, sleep and work at the same times as you do - so at least you can get some sleep.

Good Luck to all us noobies.

Noobies?

I think he means people who are starting out. freakysid, I thin kI'll probably focus on my local market as I aim to be a niche host and as I said previous, not to compete on the same level as large hosts like 1&1.

I think you will do well nzbm , there are not many webhosts in new zealand :)

Thanks LoganNZ. Web Hosting in NZ is too expensive and I hope my start-up can make an impact on the webhosting market, domestically in NZ. By starting small hopefully I can do a good deed for New Zealanders wanting web hosting without breaking the bank!

Well worth the try like there saying if you start as a hobby and learn the business. Find a host that will allow you to grow. It just allows that provider to grow till you can move up to dedicated server. Youll will for sure need a decent looking site thats the first turn off when visiting a site. How can you provide support ? Do you have money for growth or to back you. You cant sign someone up for a hosting account charge them for a year and then drop out cause its to hard 2 months later. That dont work and need to realize people are entrusting you with there data. All in all its enjoyable atleast for me. I like helping others. But its responsiblity and sleepless nights esp when you have small outfit and splitting shifts. I say go for it find provider offering resellers the abilty to resell at a discount.."please excuse my poor typing skills and english as such its going on 3am and Im still up again! :D

Originally posted by nzbm
How much is required to startup a webhost, and make it profitable quickly? Do I spend more on the servers or on advertising? Should I even bother starting a host in a saturated market?



"went to a guys house the other day to remove a virus. I get there and after removing the virus he wanted some asurance or proof it didnt infect his monitor" What do you tell these people ? :eek:

It is a competitive business and the only real way of being successful quick would be to buy over an existing business which would assure you that you have a ready customer base.

Yes. Customer Satisfaction is important. As for a site, I would most likely have my site designed and built professionally. I will start off small and get a small customer base to build on through word of mouth, then once I have establsihed a little credibility, do some advertising on the web etc. And peilo, I don't intend to pull out quickly!!

once your web hosting site was up and you pasted a couple of links tp forums and other websites how long did it take you to have lets say 100 clients?

shraz, I haven't launched yet. I aim to have a small client base initially. Unsure how many clients I will have after a year of operations.

I was asking other people tee-hehe

That depends shraz, companies which invest in good advertising can reach 100 clients in 7-8 months, and shoestring companies or small companies, it could take more than 1.5 yrs. But then again every one provides different kind of support, service, prices. Your question is too broad :D some companies sell on windows, linux hosting so it might take long or short, all in all depends on your service, prices and how QUICKLY you can get the word out! :)

My 2 cents

Originally posted by shraz
once your web hosting site was up and you pasted a couple of links tp forums and other websites how long did it take you to have lets say 100 clients?

We started back in 2002. Took us about 1 year to get 100 customers. After that, well it's growing 2 times faster :)

Ai ai ai ai....

Do not discourage people. Go for it, man. If you do not succeed you can try another business. Until you try you cannot see for yourself.

Hosting Biz is bad because as already stated here it is way too saturated. However, if you are BETTER than 80% of the hosts, you will grow.

Just keep in mind the word "BEST".

Btw, UltimeWWW:
Jolie site web :P

- AF

BEST. That sounds like what this business should be.

Sometimes if you have say 100 customers lined up to get a dedicated server :P

If you can figure out how to make your services better than
85-95% of the masters on this forum, then you will have a
chance at success.

It's about securing lower prices than your competitors,
providing better support than your compeitors, and providing
better value for each customer $ spent than your compeitors.

The market for hosting is enormous. Research this market,
figure out how you can tilt the table in your directions and
figure out how you're going to outperforming a majority of
hosting providers. Once you have proof that you can
accomplish this, you just have to start focusing on
execution.

Good Luck!

elPresidente

Tilit the Table. I like that terminology!

Originally posted by DeathNova
The market is far too saturated to do anything with now-a-days. Unless you're looking for a time intensive hobby, I would find something else.
I would disagree with that, as it all depends where you fish and how good you are at fishing. :)

A webhosting operation is a money making machine. Assemble all the componants properly, switch it on and watch the money come out the other end. Your machine exhanges a benfit (hosting services) for money and you derive the benefits of that cashflow. How well you can build and operate your money making machine, determines how much money the machine makes. :)

Interesting Thread, but I have yet to see anyone give any numbers on how to budget, and where to advertise.

The point is that we can't give any figures or a sure win guide on how much you should spend or how much should be used in advertising.....

Because different plans work for different organisations which in turn have different business strategies.

But generally most of use advertising with the following :
- CPC/ CPM engines
- Search Engines
- PlaceHolder Banners on other sites
- eMail

But how much to spend would be determined on solely on the person.
Which is effective? Well.... what are the products you are selling? ( I know web hosting... ) But what ARE the products? ( eg. pricing, facilities with the services, support and stuff like that )

Not every web hosting plan is the same and should not be marketed in the same way.

There have been so many previous threads on where to advertise http://www.webhostingtalk.com/showthread.php?s=&threadid=264104
check this thread out. I agree with Aussie Bob, it depends on howmuch money you are willing to spend to get the word out, how good your support is and your service. The market is way to big to "Target everyone" so you have to pick your niche and then deliver. As far as the main thread question goes howmuch do i invest? well invest around $1-2K on your servers, to start off be a reseller and then upgrade as you grow, spend on advertising nice design etc.

Thanks for the help and I look forward to starting my hosting service in the near future!!

Best of luck, pick a nice name for your company that you can brand as well as sell well. Make your TOS SLAs etc Have a nice webdesign, remember SIMPLICITY is BEAUTY :) Have an adv. budget and serve your customers well.

Sure will.

It's hard work. It's constant. I don't eat, I don't sleep. If I didn't already have 3 years invested in this I would quit.



<<Signature to be setup in your profile>>

I started end of December of 2003 with 0 clients and a dedicated server of my own ( I was confident ;) ), its now May 10th 2004. I have over 100 clients. I’ve received about 8 signups this week alone and I started with an advertising budget of less then 200 dollars. It is hard work to get started today but I have done pretty well so far and I see No reason why anyone else cannot do the same. There will be a learning curve with your advertising money but if you manage to find that nice ad that gets you one client for every 10 or so dollars, you will be doing well. Its all about hard work and luck. When I started, I read this forum for 4+ hours a day, most days. You need to want to do this and you need to learn as fast as possible. There is always a learning curve and as far as advertising goes you need to read what other people have done and find out what’s best for you.

When I started, I had the worst and most popular web hosting idea. When I say worst, I mean the hardest to break into. I did not go local and I did not target any audience in particular and I still got 100 clients in very little time (Considering my very low budget). It is not impossible, in fact today I can think of many things I could have done better in these past couple of months that would have me doing better then I am now. I am not trying to discourage or encourage you but I want to make sure you know that it is possible but you need to work at it and you Need to have some luck along with a lot of hard work. I was not sure at first if I would do good or if I was ready, but after learning so much, and reading these forums a lot, I got confidence and ideas and that led me to start. You cannot go into this unsure of whether you will do good because I think that will just lead to bad results, you need to know what your going to do and you need to be confident in yourself and your abilities.

That’s just my opinion on it. I saw some people discouraging you and I don’t want your hopes to be slashed completely. It is a risk and you have to accept that but at the same time you need to strive to be one of the ones that succeed. I do not really have a problem revealing this info like most other hosts. I think it’s great that I might encourage someone to start and potentially be very happy with it, so Good Luck to anyone who is in the same boat I was in 5-6 months ago.

Originally posted by elle1961
It's hard work. It's constant. I don't eat, I don't sleep. If I didn't already have 3 years invested in this I would quit.


I promised myself a long time ago that if it ever got to that point I would add another tech/sales support person, even if it meant a cut in my salary. But I guess this depends on how much money you need. I would gladly sell my car to get part of my life back though :)

promised myself a long time ago that if it ever got to that point I would add another tech/sales support person, even if it meant a cut in my salary. But I guess this depends on how much money you need. I would gladly sell my car to get part of my life back though :)

I wouldn't even count on much of a 'salary' when first starting out :)

Originally posted by elle1961
It's hard work. It's constant. I don't eat, I don't sleep. If I didn't already have 3 years invested in this I would quit.

I gotta admit it..... sometimes I think the same.
Hosting is not a viable thing anymore guys, wake up.

Hard work? Everything is hard work when it comes down to the time I'll have to spend on customer satisfaction and the day-to-day running of the webhost. I think this thread has made me realise (adjkhost) that hosting is viable if you start out small and aim for a niche market, like in any business.

Thanks for the encouragement BlueCapacity. I am going to extensively plan out what my goals and requirements and plans are in a business plan. My advertising will probably focus on the NZ Domestic market initially then i hope to shift my focus to the international community.

Originally posted by nzbm
Thanks for the encouragement BlueCapacity. I am going to extensively plan out what my goals and requirements and plans are in a business plan. My advertising will probably focus on the NZ Domestic market initially then i hope to shift my focus to the international community.

No problem. Good luck with it. :cool:

Thanks for the good luck. I think I'll need it!!!

Im impressed Bluecapacity, 100 clients in 6 months with less than 200$, wow thats very good. Keep it up.

Bluecapacity , could you send me a Pm telling me where you advertised , i would love to know !

me too pls ! really appreciated :D

....Adwords and Overture.... Experiment a lot with your ads.... I do think I am doing good for starting out with so little but I have so much to learn and I am so far away from some of the bigger companies. I don’t get an immediate return on my advertising, sometimes I pay 7-10 dollars for a 5 dollar client. Oh and all of my profit from since I started goes right back into advertising.

Experiment with ads? I fully intend to!

thats the right approach Blue, one should keep investing in their business, thats the best way to have funding for advertising, from your profits. trial and error is the best way to find out what works for you and reaps in the maximum ROI. it will take time for your money to come back but when it does come back measure how good the investment was and try another place or with better keywords, banner, depending on website and message.

Originally posted by nzbm
Hard work? Everything is hard work when it comes down to the time I'll have to spend on customer satisfaction and the day-to-day running of the webhost. I think this thread has made me realise (adjkhost) that hosting is viable if you start out small and aim for a niche market, like in any business.

Thanks, m8. :)

nzbm , don't forget you still have school , as a mate of yours you will of course be getting some reseller off me :P

Yeah. School. I am able to allocate time between schooling and the business.

I wonder if I should employ someone for support etc. Anyone have any experiences with support staff?

If you only have a small client base , don't employ support staff . just do it your self .

As you wouldn't be able to hire any one for support with only a tiny client base .

Its not worth it ; get some support staff when you have around 50-100 clients.

Originally posted by Yaser
Im impressed Bluecapacity, 100 clients in 6 months with less than 200$, wow thats very good. Keep it up.

probably because of the price too.. 7500 Meg Storage
85 GB Monthly
$20.00 Monthly WOW..

Yeah. I suppose my initial client base won't justify support staff.

I like quoting the first reply...

Originally posted by DeathNova
The market is far too saturated to do anything with now-a-days. Unless you're looking for a time intensive hobby, I would find something else.

I disagree with this - the market overall may be saturated but I have found a very profitable way to start and run a webhost. I have no even fully launched mine yet and I already have a number of paying customers. You just need to be on the local level!

I am serving my county and the county I school in(one in CT one in NY)there are probably a good 1 million people within those 2 counties and they are 2 of the wealthiest counties in the country, all feeding off the prosperity in New York City.

I have found much profit in appealing to the people in this area as a local and as a host who "knows whats up" as a customer has said to me.

Try a local based webhost - it worked for me.

Originally posted by NickRac
Try a local based webhost - it worked for me.

The market is far to saturated to try to be just another cheap host on the net...no doubt.

However, if you can provide an edge to your customers, even if that edge is the comfort of knowing that they are supporting a local company, putting their money right back into their community, you'd be suprised at what you can compete with.

I get the pleasure of working with many local webhosts now, in the past, I've worked with the 'national anything-but-local market' as well as others....there is no market like the local one.

A webhost just coming into the industry, who can't be anything special over one of the big dogs who can provide decent hosting at a great price won't go anywhere. However, a local consultant who can provide 1 on 1 interaction, good local support, and stable hosting still has a very good chance at being successful.

It all depends on what you consider success, but I'd have to agree, the local market is where it's at. :D

This same argument could go for any industry, successful mom and pop restaurant competing with the new Longhorns, or Uncle Bob's Hardware Shop trying to compete with Lowes.....

Yeah. As I have posted previously I aim for my webhost to be domestically focused.

I love some of the negativity in this thread, i'm a sucker for it.

My 2.333 cents:

Yes, there is always room for someone to come into this industry, and work at a niche. Anyone that tells you differently, is probably just saying that because they over-stepped their limitations, and nose-dived (reality check?).

I'll skip the long version, and jump straight to the local hosting tips;

Network, network, network.

That's what's needed in the local hosting environment. Drill it into your family, your friends, your enemies, and your goldfish, that when they hear anyone talking about getting a website, their knee-jerk reaction is "hey, Joe Tulip has a great business, give him a call".

Another tip, is to join your local chamber of commerce. This type of scene is what can really set you going. Not only can it bring in a revenue line, but you can only benefit from a group that is literally the local businessmen, all thrown into one. I cannot stress enough what this can do for your business, honestly.

It's hard work, but then again, what business isn't? Some people have a really hard time making the transition from school/college/university, to operating a business. It can be a shock to the system for some people, but can also be a real kick in the backside to others, and who knows, you may enjoy it :)

(yes, this was the short version - I could type for hours with tips, but I don't want to right now)

Simon

Good post :gthumb:

However, don't always expect the Chamber of Commerce to be your moneycow just waiting to be milked. I know plenty of cities who's chamber of commerce is next to worthless...it all depends on who's running it.

Originally posted by nickn
Good post :gthumb:

However, don't always expect the Chamber of Commerce to be your moneycow just waiting to be milked. I know plenty of cities who's chamber of commerce is next to worthless...it all depends on who's running it.
I agree,

However, It is safe to say that joining his local chamber can only benefit him in the long run. Whether it be via advice from business owners, or a direct (although prolonged) source for clientele, or even both.

Some head's of chambers are less than approachable, to start with, I agree. I had a little trouble with being a foreigner here when I joined, but they got over it, and 9 times out of ten, you'll find that once you're in for a while, you'll be ok.

Simon

Agreed....it's definitely not something to ignore, there can't be any harm (other than the fees to join) in joining up.....It's probably a better investment than a premium WHT membership ;)

Originally posted by |<@os
probably because of the price too.. 7500 Meg Storage
85 GB Monthly
$20.00 Monthly WOW..

I get my servers at servermatrix, WITH a discount. So I can afford that and be Quite profitable.

to support Simon's post re: network i would like to tell you all a statistic i learned in my Management class.

48% of a successfull managers' time is spent on networking at various joints whether it may be trade shows, expos or business meetings. (this is according to Management 101, jk :D )

thanks :)

I might join my Local Chamber of Commerce and use some of the Youth Enterprise tutorials and seminars they have. Theres also a young entrepeneurs forum that meets regularly in my city.

Before you start networking, you might want to read these articles at

www.effectivenetworking.com
www.careerlab.com/art_secrets.htm

thanks

thanks for the links, especially the second one!

Originally posted by nzbm
I wonder if I should employ someone for support etc. Anyone have any experiences with support staff?

One of my resellers...gives support with his Mobile Phone during class! LOL

Good tactic to be always up and a tip for you too! :)

Yeah well I don't have a mobile phone, but I might get one to offer support during breaks, otherwise I will probably need support staff, only one though.

I dont know how much you would pay to your support staff but if its more than 500$ or so then you should look to outsource it instead, but if you are targeting locally then yes keep a support staff :)

hard working and right time can success any business. Just do hard working and wait for the right time

I don't understand what you mean by the right time?