Hello folks,

After reading and reading some of the ins and outs of this business, I have a few very specific questions to ask. Some of these may not be answerable, but if you could wager an educated guess I would be delighted. I am attempting to put together a business plan and in order to prepare proper projections, I need something as close to accurate as I can dig up. I also understand that different hosting services have different agendas and therefore would have entirely different numbers. If you could, just qualify your business model when answering (hope this doesn't sound too demanding).

I'll not be too hurt if this thread goes ignored either as some of this information may be considered proprietary and sensitive to your organization. If you feel that I am intruding just by asking, I apologize up front. But, seeing the issue of a business plan mentioned prior to this message, I thought this might get the ball rolling -- and it will certainly help me.

So, without further ado... The questions!

1. If you were to draw a ratio of support hours : customers, what would your numbers be like? For completeness I drew a figure of 1 hour per month per 10 customers out of thin air, and this really hurt the bottome line. I'm hoping support hours are much fewer.

2. What do you guess your typical customer aquisition charge is? How much does it cost you to hook a customer?

3. Were you able to run this business part time initially? What was the critical point at which you could no longer work your day job?

4. At what point did you have to hire help for administration or support?

5. On the sensitive topic of overselling, how much is considered safe? I can't imagine it is an easy task to move a customer to a server with more space and would likely annoy customers if you were to do so because you oversold a server. Also, with todays system costs (memory and disk namely) so low, is it even really necessary?

6. What is least reasonable amount you can sell a hosting plan at? I see $2.95 and $4.95 but when I do the numbers, I'm barely breaking even on a non-oversold server at $9.95 after considering support costs, credit card charges, and other miscelaneous expenses. Initialy it looks real good at $9.95, but after adding support charges (using my 1 hour per month per 10 customers billed at $45/hour) it gets pretty close.

7. This one probably requires my own consultation with an attorney, but here goes: What are our liabilities as hosting providers? How do we deal with data integrity issues and the like? Assume physical damage to a server, even RAID will not save you. TAPE backup might be good, but if it is stored on site with the colo facility and the place burns down, how do you protect yourself from litigation? Can you protect yourself? Is there insurance that is available for this? Error and Omissions insurance is awful expensive!

8. This is perhaps the most important one of all: Do you REALLY enjoy what you do? I find that I really enjoy reading about it, and studying it, and I look forward to consulting with my customers should I ever get any, but what I really want to enjoy myself during the whole process.

That is all, thanks in advance for all who are listening,

Scott

This is how your business plan should look like:

1. Executive Summary

2. Corporate Overview
a. Business History
b. Vision, Mission and Core Values
c. Key Business Goals
d. Key to Success

3. Market Overview
a. Global Market Need
b. Local Market Need

4. Products and Services
a. Product Overview
b. Products and Pricing
c. Hosting Capacity
d. Protection Policies and Processes
e. Product DIfferentiation

5. Competitive Analysis
a. Global Competitors
b. Local Competitors
c. Competitive Positioning

6. Customer Analysis
a. Global Customer Base
b. Motivation for choosing Your Company
c. Overall Satisfaction
d. Key Benefits Sought
e. Customer Buying Process
f. Customer Loyalty
g. Customer Positioning

7. Marketing and Sales Strategy
a. Target Market
b. Competitive Pricing Strategy
c. Marketing Communications and Promotions Strategy
d. Sales Strategy
e. Loyalty Strategy

8. Management and Organization
a. Current Organizational Design
b. Board of Directors
c. External Advisors
d. Target Organizational Structure
e. Key Human Resources Strategies

9. Financial Strategy
a. Ownership Structure
b. Projected Customers by Year
c. Projected Income Statements
d. Cast Investment
e. Statement of Net Worth

10. Economic Impact and Risk Management
a. Economic Impact
b. Managing Key Risks

You could call this a business plan (if filled with about 200-300 pages of information, strategies, etc. of course) or a guide for your business on how to 'Build a Million Dollars Company'. :D

Whoa Kiwi, love your Buisness Plan. Love it!
:stickout

"You could call this a business plan (if filled with about 200-300 pages of information, strategies, etc. of course) or a guide for your business on how to 'Build a Million Dollars Company'. "

Or go broke while the customers you do have get mad because your spending all your time writing a good business plan :)

Originally posted by ebo
Or go broke while the customers you do have get mad because your spending all your time writing a good business plan :)
If your business grows and you don't have a business plan, it will most likely break apart.

That's a heck of a nice outline for a business plan, thanks! I wonder if anyone has any answers the my questions that they would share?

Thanks again! :D

Scott

Originally posted by ebo
Or go broke while the customers you do have get mad because your spending all your time writing a good business plan :)
Forgot something in my last post. If you do the business plan right and you build your company the right way, your employees are supposed to answer your customer's requests.

Originally posted by Kiwi
If you do the business plan right and you build your company the right way, your employees are supposed to answer your customer's requests. Assuming that's part of your business plan! :)