The market is good for new Web hosting companies. According to Forrester Research, there is now “positive — if modest — growth for Web hosting and managed IT services, at both the enterprise and SMB levels.”

The hosting industry is one of the few profitable sectors of the Internet. As such, large corporations such Yahoo are offering Web hosting services. You, too, can join this highly profitable business and reap the financial awards -- but only if you do it right.

To build a successful Web hosting company, I offer the following two time-tested and proven rules: Focus on offering high-quality services in a tiered pricing schedule.

In addition, it is essential an automated infrastructure to create self-sufficient customers. For marketing, it is crucial to maximize intelligent marketing opportunities.

Automation will create a self-sufficient client-base and reduce your expenses down the road. In order to provide the best-possible service, you'll want a minimum of the following processes automated: order forms (for new customer account set up or existing customer updates), billing system, administration system, end-user control panel, and technical support interface.

Order Forms

The front end of your order form should serve an minimum of these four key functions: 1) verify domain information for registration purposes, 2) validate entered results, 3) process the customer's credit card or create an invoice, 4) enter the customer's information into billing database for future use.

The backend of the order form must process the domain registration (if customer needs to register one) and generate the Web hosting account.

Administration System

The administration system is necessary to manage ordered accounts. You may wish to manually add or remove new domains, change passwords, etc.

End-User Control Panel

The end-user control panel is necessary for allowing your customers to manage their accounts. At the very least, customers should be able to set up their own e-mail accounts, view Website statistics, and manage their files.

Billing System

An automated billing system is an absolute must! The billing system should e-mail invoices, charge credit cards, and suspend overdue accounts. The system should also allow the you to issue credit or discounts as needed.

Technical Support Interface

By technical support interface, I'm not referring to a system that merely generates trouble tickets. An effective tech-support interface automatically generates an FAQ-interface that customers can search before submitting trouble tickets. These interfaces can reduce technical support requests by a factor of 10!

In addition, be sure that the company you go with offers the option of taking care of technical support on your behalf but branded with your brand. You can then focus your energy on your core competencies and growing your business.

Maximize intelligent marketing opportunities

You know what platform you want to use, you've figured out what packages to offer, and set up a tiered pricing schedule and automated systems. So how do you get the word out about your new hosting service?

Pay per Click

Pay per Click can potentially allow you to reach large numbers of customers. Although you don't pay to list your site, you do pay when a user clicks on your listing and connects to your site. How, then, do you get your site high on the results lists? You must engage in a bidding war over how much you're willing to pay for each person who clicks through to your site. The stakes have recently grown pretty high, so be careful about bidding too high. Just because someone clicks through to your Web hosting site, doesn't mean they'll convert into a new account. Also be sure to select targeted keywords not competing with everyone else for the same keywords. That is a very difficult game to win. Find your niche.

Hosting Directory Sites

There are numerous Web sites known as hosting directories -- that attract Web hosting customers. These hosting directories are an excellent place to advertise, but be selective in your placement. Many offer banner placement, spotlights, search enhancements, and other forms of advertisement. As a general rule keep in mind that banner ads are better for creating brand recognition than generating new accounts, so advertise based on your budget, not on your expectation of new clientele.

Leverage Your Current Client Base

If you run an established Web design firm, information portal, or domain registration service, you can immediately begin marketing to your current clients. A simple e-mail to your customer base can instantly generate a large number of accounts.

Offer New Products and Services

Keep in mind, once you acquire a solid customer base, you can consider developing new products and services to keep your customers happy and to generate additional revenue. But always remember: Quality is key!

good tutorial manatee.
i like the pay per click idea
what would you say is the "in" pay right now for clicks
and i know about fantastico. are there any other services that we can use?
thanks
Keep Up The Good work :D

Thank you for the feedback!

This is just what I need to tackle the automation tasks. Clear and smart goals to achieve. And the marketing advice also helps put things in perspective.

Thanks!

Great advice for the newbies of WHT. Though I think there is more to a success of a web hosting than this. :)

Yes, I agree, and I would be happy to write a follow-up article. What are some questions you would like to see addressed in a future article. Thank you.

Since you ask / offer, manatee123:

Do you have tips on designing the look and feel aspects of a hosting site that will turn into more sales? Do's and Don'ts and whatnot?

Thanks!

You mean design issues or more the content itself or both?

Both, if you have some ideas.

If it's giving away TOO much, well, nevermind, then.

I really appreciate what you have done already!

No, it is not giving away too much. I will think this through and try to come up with a follow-up article or at least a follow-up post right here.

Thats quite good advise HINT!!

i aggree with that

I doubt everyone will start a hosting company but web designers and IT consultants can earn more and provide more to their customers.

Upon request, I was going to write a followup article on effective e-commerce. A quick Google search showed that Paul Graham has already written very good essays on this topic: http://www.paulgraham.com/ecommerce.html

BTW, I recommend all his essays as he is quite insightful on a variety of topics...

Thank you.

Let me know what you think of his essays. I think they will answer most of your questions re e-commerce.

manatee, those essays are wonderful! I have bookmarked them to refer to later on. Thank you so much for sharing and your article as well :)

I agree.

BTW, I recommend his other essays at http://www.paulgraham.com/paulgraham/articles.html. While I definately don't agree with everything he says, he can be very insightful.

Thanks manatee for sharing the site, and well you did a great job.

thanks for much for this tutorial, im gonna pass this onto my friend!

I agree.

BTW, I recommend his other essays at http://www.paulgraham.com/paulgraham/articles.html. While I definately don't agree with everything he says, he can be very insightful.

Thanks manatee123, the site is useful but i would hope there's more update on the secret of running a sucess website.

anyone found clickbank.com useful for promoting hosting business??

Is there any other good advertisement programm other than google adsense that also offer Sales commission(commision after the sale).

great essay there!! thanks for sharing

..:: Peace ::..
Jeba

great essay, a superb job, thank you!

I visited the StreamSend and was very interested in a partnership, the service is very interesting and I am certain of existing market here in Brazil for him, perhaps the biggest difficulty is the language, there is possibility of translation of language for the brazilian portuguese? you have interest in a partnership for translation and distribution here in Brazil?

Thanks for sharing the info.

That is great, i liked some of the info and some does not apply to everyone if you think about it.

Remember folks, starting a web hosting business is just like starting any other online business. Obviously, customer care is paramount to not only keeping your current clientele, but ensuring a fairly continuous stream of new business. Business success begins and ends with support. Trouble ticket software and FAQs can help, but that's does not satify your support obligation. Customers need to be able to contact knowledgeable and experienced support personnel to truly feel comfortable and wanted. Give me a person over a slick help desk system any day. Forget pay-per-click advertising schemes or an up to date and automated billing system. While those things can help, it doesn't come any where near what the benefit of good customer support provides.

The write-up that manatee123 provided is a pretty good one, but it did not emphasize what truly makes an online business successful. As you gain more experience with these things, you'll get quite used to the number 1 quality of a good, successful business: support.

Printing :) Great article ;)

Thank you for the feedback!

Great post. It was very helpful to me a few months ago :)

Great info here-thanks! Newbie question- how critical is it to selling B2B hosting co-lo,idc services to be close (ie within 200km) of where prospects are located. I read an MCI whitepaper that said a datacenter marketing drops off after 100km away from traget clients physical locations. Has the B2B market matured in this respect? It would seem that (except for clients requiring physical access to servers) having multiple redundant hi-speed paths to internet would be the deciding factor? However in the SMB B2B market many buyers are perhaps "uncomfortable" having their digital assets 100 miles away. thanks, Stu

It's a very nice tutorial :) Nicely done!

thanks, this will help a lot

you forgot to add, to register their business in the state or country!

thank you for your article it is very usefull but i lost a lot of money on pay per click i spent more than 1000$ and i made less than
10$ because there is a lot off click froud
thank you for your article

Great advice, will help me a lot

Really helpfull for newbies.. thanks..

Great tutorial, a must for every hoster around here.


Keep up the good work :)

The more services and benefits you add to your hosting - the better.

My 2 cents

Great guide, some really usefull advice here.

nice,... thank you

Cheeers ;)

a bit old guide but great stuff, it would be nice if someone update it, the industry maybe changed a bit since the guide came out.

mantee123 you got a pretty good article there. But the thing that I don't agree with you is that, you should not leave all your customer support to another person. Giving personalized customer support to more general issues will give you the chance to build a better relationship with you client. And thus more income.

Great Tutorial. Thanks

Thanks it is great!
What is software do you advice for the automated billing system?
thanks
Nick

I like your guide :)

nice guide ;)

very useful

Hi

This is a great start for me I am just concerned that I wont get enough hosting clients. I know how fierce the competition is out there.

But a thousand mile walk starts with a single step.

William

Grate tips. A well refined support and fully automated system is a must for a good hosting company.

Anyone here who can tell me which reputed , listed on the NASDAQ, kinda service provider could i go with to host my e commerce site?

I am looking at Navisite and RackSpce.

Which is better?

Someone please throw some light here if you can.

Appreciate all the help folks!

Best,

Its nice tutorial for startup hosting companies

Really Great tutorials , thank you very much

Really a good article for a new Web host company, keep it up guys..

Thank you manatee great article. Thanks for sharing.

Nice article for a new web hosting company.. Lots of good basic infomation. Thanks

I like the insight you provide to people just starting out - things to set up in the order form, control panel, etc. Good post. Thanks OP

Very good tips, I would use them in the feature thanks.

These are nice guidelines, most newcomers to hosting overlook them.

Nice article for a new web hosting company.:)

The market is good for new Web hosting companies. According to Forrester Research, there is now “positive — if modest — growth for Web hosting and managed IT services, at both the enterprise and SMB levels.”

The hosting industry is one of the few profitable sectors of the Internet. As such, large corporations such Yahoo are offering Web hosting services. You, too, can join this highly profitable business and reap the financial awards -- but only if you do it right.

To build a successful Web hosting company, I offer the following two time-tested and proven rules: Focus on offering high-quality services in a tiered pricing schedule.

In addition, it is essential an automated infrastructure to create self-sufficient customers. For marketing, it is crucial to maximize intelligent marketing opportunities.

Automation will create a self-sufficient client-base and reduce your expenses down the road. In order to provide the best-possible service, you'll want a minimum of the following processes automated: order forms (for new customer account set up or existing customer updates), billing system, administration system, end-user control panel, and technical support interface.

Order Forms

The front end of your order form should serve an minimum of these four key functions: 1) verify domain information for registration purposes, 2) validate entered results, 3) process the customer's credit card or create an invoice, 4) enter the customer's information into billing database for future use.

The backend of the order form must process the domain registration (if customer needs to register one) and generate the Web hosting account.

Administration System

The administration system is necessary to manage ordered accounts. You may wish to manually add or remove new domains, change passwords, etc.

End-User Control Panel

The end-user control panel is necessary for allowing your customers to manage their accounts. At the very least, customers should be able to set up their own e-mail accounts, view Website statistics, and manage their files.

Billing System

An automated billing system is an absolute must! The billing system should e-mail invoices, charge credit cards, and suspend overdue accounts. The system should also allow the you to issue credit or discounts as needed.

Technical Support Interface

By technical support interface, I'm not referring to a system that merely generates trouble tickets. An effective tech-support interface automatically generates an FAQ-interface that customers can search before submitting trouble tickets. These interfaces can reduce technical support requests by a factor of 10!

In addition, be sure that the company you go with offers the option of taking care of technical support on your behalf but branded with your brand. You can then focus your energy on your core competencies and growing your business.

Maximize intelligent marketing opportunities

You know what platform you want to use, you've figured out what packages to offer, and set up a tiered pricing schedule and automated systems. So how do you get the word out about your new hosting service?

Pay per Click

Pay per Click can potentially allow you to reach large numbers of customers. Although you don't pay to list your site, you do pay when a user clicks on your listing and connects to your site. How, then, do you get your site high on the results lists? You must engage in a bidding war over how much you're willing to pay for each person who clicks through to your site. The stakes have recently grown pretty high, so be careful about bidding too high. Just because someone clicks through to your Web hosting site, doesn't mean they'll convert into a new account. Also be sure to select targeted keywords not competing with everyone else for the same keywords. That is a very difficult game to win. Find your niche.

Hosting Directory Sites

There are numerous Web sites known as hosting directories -- that attract Web hosting customers. These hosting directories are an excellent place to advertise, but be selective in your placement. Many offer banner placement, spotlights, search enhancements, and other forms of advertisement. As a general rule keep in mind that banner ads are better for creating brand recognition than generating new accounts, so advertise based on your budget, not on your expectation of new clientele.

Leverage Your Current Client Base

If you run an established Web design firm, information portal, or domain registration service, you can immediately begin marketing to your current clients. A simple e-mail to your customer base can instantly generate a large number of accounts.

Offer New Products and Services

Keep in mind, once you acquire a solid customer base, you can consider developing new products and services to keep your customers happy and to generate additional revenue. But always remember: Quality is key!



THIS IS A REALLY AWESOME ARTICLE THANK YOU!!!

Great article, you've covered all the basics to get a starter company going.

Great info here manatee - thankyou

very good thread.
May I have a copy and translate to another language?
thanks

Thanks for this its very useful.

Money is my issue at this moment.

It's hard to do man!Internet is bigggg, your site may be lost..The hard part is find the first customer, and then keep him!

Very Good! Commitment is also a must!

Nice article. It'll help new new companies :)
thanks again