Greetings. What sort of profits could one expect reselling, after say three months?

I would be very grateful for your various views and projections on this.

It all depends on how dedicated you are with promotion. If you are willing to spend some bucks, theres a higher chance that you will earn some money back in the long haul.

There's no good answer to this question. You could make lots of money. You could make a little bit of money. You could lose money. You could lose a lot of money. It all depends on many factors such how you run your business, your costs, and even luck. Spend time planning your business, and you're more likely to be successful.

Planning out a business is all new to me too. I have friends, contacts, etc., all who have done it and continue to do it but they are busy with their businesses and I don't want to pester them to tutor me on business 101. Nor do I want to pester anyone here for it. Can anyone recommend some resources either online or books to kind of lay out what to keep in mind that I might overlook when planning out a business like mine where I design sites and host them by reselling?

I really appreciate all the time everyone here has already taken to help me. Thanks :)

I am not sure if it is just me but do you expect profit in the first 3 months. You need to spend a lot of time building your business before you can expect a profit. This takes time.
I am sure you will correct me if I am wrong but should you not concentrate in making a good company in your first 3 months and not profits?

I am confident in my ability to create a good company, but it wouldn't do anyone much good if I were to go bust due to lack of profits.

I need numbers so that I can plan accordingly. If anyone would be willing to offer their own examples, I would be grateful.

The smart businessman finds out these things beforehand.

Project your costs and figure out how many customers you need to break even. The time it takes to reach that amount of customers will vary, depending on how you run your business and how you advertise. Using someone else's numbers to plan your business isn't a good idea. You could do exactly the same things as someone else and still not be as successful.

I have already done my own figuring, but I wanted additional input as far as others' experiences.

If you really want to do the groudwork before actually beginning anything then have a look at bplans.com which have a few business plan outlines that you can view.

I have also written a bisic tutorial for writing a plan at Designerchat (http://www.designerchat.net) in the Knowledgebase forum for those who need to learn about the basics for writing a business plan.

Another good place to start is the state and federal governement sites out there on the net, and some states do have small business help for those who wish to start a business.

I am confident in my ability to create a good company, but it wouldn't do anyone much good if I were to go bust due to lack of profits.

That is a fair point but should you not start a business with enough money to cover you for the first three months?

Just a thought on projections-

I have started and sold 3 companies over the past 15 years. I am one of those people who get off on creating and not running. Doing projections is vital before you start. A test I always use to see if I had a winner was to make my best 1, 3 and 5 year guesses. THEN- double expenses (don't forget to pay yourself) and cut revenue by 50%. If you still project making money then you have a winner.

Start up costs- Many think that covering all expenses for 3-6 months works. Not so- go back to your worse case projection for year 1 and secure capital for -those- expenses (the doubled ones) for the entire first 12 months, or to the point you projected break even.

The majority of businesses don't fail because the idea was bad, or ill-timed, or poorly managed. They fail because they didn't have the capital to operate to break even. Using this method you will pretty much be assured to not have that as a cause.

DR

I see so many people coming into this business thinking they are going to make a quick profit.
Some lucky people may do but i dont think it is a good idea thinking that you will profit and making your plans showing profit in the first 3 months.
Are you really trying to work your plans? or are you trying to reasure your thoughts of becoming rich quick?
There are so many post asking questions like - How much money can I expect to make soon? And Can you tell me how many customers will I get?

DiamondRose, you hit the nail on the head.....

Planning especially financials and even the start up costs projections cover expenses that the business will encounter in the first 12 months, including wage estimations, and so on.

Many do think that guesstimation is they way to solve planning and projections but its based on formulas and not just what you "think" will be the unit sales for any given time period. This is actually done by statistical data of the industry and specific part of an industry you are planning a business for.
It is a law of averages deal, where growth x average unit sales including product substitutes are calculated to dervice a mean figure which then you can derive a bad month or quarter by reducing volume by a percentage value.

There are plenty of books written on this subject area, and people shouldnt call it an expense but an investment as having the knowledge top plan properly is as important as the product or service you're trying to sell.

I think this is one of the reason so many new web hosts go bankrupt after less then a year,. The thought that all you have to do
is buy some space and resell it, thinking that it is all profit. Web hosting is like any other business, it needs planning and
calculating long before hand.
After just three months profit? I would rather think the opposite. It takes time and investments before any profits can be shown.
And if you have done all the figures you too should know that.

Why is one restaurant crowed while the one next door is empty, while both have almost the same food, same size , same
decoration ? Both lets say one year in business? The first planned ahead, had reserve funds. The other didn't and may after a
while have to cut edges just to get by, resulting in lack of service, poorer quality of food, and so on, ending in bankruptcy. May
be a simple example but it goes for web hosting as well.

You can not compare one web host to another. One might sell 100 accounts in one month for a few dollars, no profit there,
while another may sell 20 at 50, but still here that month would not be profit, considering the expenses you make the first
months. You will only start making any kind of profit after 6-7 month depending on your unique plan. I wouldn't count on any
profits for the first 6 months,
rinnando

I'm in profit after my first month ;)

but then again that's because i'm reselling to friends & family and didn't get the account till everyone was confirmed.

I think is absolutely possible to have small profit in first 3 months. If you start as a reseller for stable company, invest some money in ads and add your site to all web hosting directories then people will find you. The rest is support. If you calculate $40/hour for your salary of course there won't be any profits. Just my opinion :D

Peter

This is what I mean. Of course if you don't count your hours ( your fee.....you do need to eat ) advertisments, computer write offs, paper and other office supplies, heating, taxes,transportation, and the list goes on.... of course you will have a profit.
But is it a business?? Or will you be a high school student just earning extra pocket money?
Of course you will give great support. And with it your business will grow.
But we are talking about first months profits here aren't we?
rinnando

I see no reason I shouldn't profit on just the first month. In fact, my calculations state that I will.

This is barely different than any other commodity; you buy low, sell high and make a profit.

The only difference is that this is a commodity you need to provide upkeep for. I can handle support, and there is absolutely no reason for a large amount of capital.

This is not the kind of thing you need an office for - that's just wasted money. If you think otherwise, well, I'm sorry, but that's just not a requirement.

This way, you require less capital, make more profit, and therefore are able to keep the business more stable than if you were wasting your money on such a frivilous expense.

err, about 8 quid in all :o)

yes, i am a student, and i have a nice selection of computers already to run everything from. and my time is essentially free!

*however* it would be nice to build the business into something more than beer money - i plan to do a lot of web design - and my current thinking is to do it for free, and clean up hosting the sites.

i also seem to be able to sell domain names pretty well, with a basic package behind them for e-mail they are fairly attractive!

You would actually have an office, as your possible classification would be as a home based susiness, subject to tax claims, and deductions for business expenses. This is of course if you actually treat it as a business and register a business name to begin with, and then account for taxation like sales taxes if applicable, and so on.

Devorius, what you are talking about is a service, not a commodity at all, and legally speaking, for web design they are paying for your skill and not the end product as the main component of what they are purchasing. Same is for web hosting in general, which is a service.

Generally, legal definitions have different implications where this is concerned so best to know your laws and where you stand apart from just knowing if you'll be in the black within 3 months.

LOL, This is one of those things that no one can answer.

Hosting depends on the following things:

Reputation
Quality
Service
Prices
Advertising

If you lack in any one of those you won't have as much profit as someone who does.

If you don't advertise you won't make money. If you never answer support questions you won't get refferals which will give you a bad reputation. Now in order to build up your rep you concentrate on support and lack in the technology area. LOL it never ends.

Anyway if you do all those good then you will profit from your company. :D

I did not say that it is legally classified as a commodity. I said the principle is the same. Buy low, sell high.

I think this attitude is what frightens most people away from hosting companies. The
thought that it is all just buy low sell high, get the money and run.
Web hosting IS a business.
People trust you to take care that their site , which can be very important for them ,
to stay up and running. If you think you don't need a office, even a home office , or a
laptop on your table in the kitchen , how will you keep track, give support, do your
book-keeping and so on??? How to you plan to manage hundred of clients?
I have been doing business for 20 years now and I am still planning our hosting
business. This will be up soon, but when I do launch, I want to be sure I will still be
around in the years to come. I want to be able give my customers the service I
expect from my host.

Nishtec you are right in what you say. I do hope more people will realize that web
hosting is a business and run it accordingly. Maybe then the reputation of web hosts
will improve.

rinnando

I did not say that I would not dedicate myself upkeep and support, nor did I say that I do not have a "home office."

I was speaking strictly on the money side of things, and as for the office comment, I meant it as far as traditional offices are concerned.

I see no reason I shouldn't profit on just the first month. In fact, my calculations state that I will. \

Do your calculations guarantee sales?

Of course not. However, I do believe I can get sales. Furthermore, I plan to go into it with as little personal investment as possible, and then take the profits and feed them back in. That way, it minimizes my losses, while still providing a strong foundation.

As I said I have been doing business for 20 years now and for me "profit "= income
minus ALL costs. I too work from a home office, but I do deduct it as cost along
with any other reoccurring bills related to my "office".
If you start small and reinvest all your income then you will be all right. We all start
somewhere and if you are serious about this I wish you luck, just don't want people
to think web hosting is is a easy way to earn fast money. It may seam so if you are
lucky and start off with lots of sales, but it takes planning to keep up and stay ahead.
I will end here now, Again I wish you luck .
rinnando

Originally posted by Avatar
I'm in profit after my first month ;)
...
This signature was cancelled due to lack of funding

Something doesn't gel here :D :laugh:

$32.94

I hope that answers your question!

Simon :rolleyes: