Just because you have a plan doesn't mean it will work. All of these are common but sometimes we all need a reminder to steer our business ship away from the rocky coast.

*Adapted and taken from Writing Business Plans That Get Results

Industry:

The section will discuss the larger business environment and trends. By going over
the industry, you can also show how your business will address it.

Common Mistakes:

1.Failing to demonstrate a well-rounded knowledge of the industry
2.Appearing to be a “fly-by-night” operation
3.Appearance of a lack of direction.

Your Product/Service:

The section will discuss the “what” of your business.

Common Mistake:

1.Describing the product/service too technically, too broadly, or too ambiguously
2.Failing to complete research on how to protect from liability or competition.
3.Identifying too much red tape/uncertainties from regulatory agencies.
4.Including weak future development plans

Market Analysis:

The section will demonstrate that you understand the market, that you can penetrate it, and that there is a demand for your product/service.

common mistakes:

1.Believing that the size of the market base is equally distributed
2.Failing to prove that your target market represents the major portion of the demand for your product/service
3.Making unrealistic market share projections
4.Failing to demonstrate a clear understanding of the product/service and the market
5.Failing to include an accurate estimate of the profitability of each service transaction.
6.Not properly assessing the total market potential or changes
7.Presenting the facts to make your market appear to serve your business, rather than your business serving the market.

Competitive Analysis

(some people choose to include this in "Market Analysis," but
that is your choice): The section will show that you are fully aware of the competitive forces at work in your marketplace. It will explain your strengths over the competition, as well as how you will counteract their advantages and overcome (or compensate for) your potential weaknesses.

Common Mistakes:

1.Not identifying known major competitors
2.Underestimating competitive strength and potential
3.Failing to demonstrate what makes you better
4.Having no strategy for counteracting current (or emerging) competition
5.Assuming you have no competition
6.Failing to show an awareness of competitor’s plans in the market and their business
cycles.

Financials:

This section will illustrate the financial needs and projections. It will describe the
type of financing desired as we as the amount, payback terms, and potential return on investments.

Common Mistakes:

1. Making unrealistic sales and profits projections.
2. Failing to make reasonable assumptions.
3. Planning to spend too much money on “fringes”
4. Failing to project the downside if sales don’t go as expected.
5. Proposing a return lower than industry norms

The Business:

This section will illustrate who exactly will run the business, and how.
Principals, and their roles, will be clearly indicated as well as their methods for effectively running the company.

Common Mistakes:

1. Failure to truly discuss principals’ strengths
2. “Over hyping” principals
3. Not offering concrete means for developing a positive work environment
4. Failure to show a true chain of command
5. Including non-essential staff as necessities

Very nice indeed. This can not only help new business owners but existing ones aswell. Very nice post here. All point mentioned are very valid. Another one for industry (especially in web hosting) would be lack of innovation. IMHO innovation is a must for any web hosting. With the constent raise of new "hosts" popping up every single day, innovation is most certainly key! Furthermore, the web hosting industry in general is confusing to most new comers. Alot of consumers dealing with web hosting that are new do not know exactly what to look for, what diskspace (nevermind bandwidth) even means. We as hosting providers need to focus on making it easier for the customer to better understand.

Very nice post!
Just because you have a plan doesn't mean it will work. All of
these are common but sometimes we all need a reminder to steer our business ship away from the rocky coast.

*Adapted and taken from Writing Business Plans That Get Results

Industry:

The section will discuss the larger business environment and trends. By going over
the industry, you can also show how your business will address it.

Common Mistakes:

1.Failing to demonstrate a well-rounded knowledge of the industry
2.Appearing to be a “fly-by-night” operation
3.Appearance of a lack of direction.

Your Product/Service:

The section will discuss the “what” of your business.

Common Mistake:

1.Describing the product/service too technically, too broadly, or too ambiguously
2.Failing to complete research on how to protect from liability or competition.
3.Identifying too much red tape/uncertainties from regulatory agencies.
4.Including weak future development plans

Market Analysis:

The section will demonstrate that you understand the market, that you can penetrate it, and that there is a demand for your product/service.

common mistakes:

1.Believing that the size of the market base is equally distributed
2.Failing to prove that your target market represents the major portion of the demand for your product/service
3.Making unrealistic market share projections
4.Failing to demonstrate a clear understanding of the product/service and the market
5.Failing to include an accurate estimate of the profitability of each service transaction.
6.Not properly assessing the total market potential or changes
7.Presenting the facts to make your market appear to serve your business, rather than your business serving the market.

Competitive Analysis

(some people choose to include this in "Market Analysis," but
that is your choice): The section will show that you are fully aware of the competitive forces at work in your marketplace. It will explain your strengths over the competition, as well as how you will counteract their advantages and overcome (or compensate for) your potential weaknesses.

Common Mistakes:

1.Not identifying known major competitors
2.Underestimating competitive strength and potential
3.Failing to demonstrate what makes you better
4.Having no strategy for counteracting current (or emerging) competition
5.Assuming you have no competition
6.Failing to show an awareness of competitor’s plans in the market and their business
cycles.

Financials:

This section will illustrate the financial needs and projections. It will describe the
type of financing desired as we as the amount, payback terms, and potential return on investments.

Common Mistakes:

1. Making unrealistic sales and profits projections.
2. Failing to make reasonable assumptions.
3. Planning to spend too much money on “fringes”
4. Failing to project the downside if sales don’t go as expected.
5. Proposing a return lower than industry norms

The Business:

This section will illustrate who exactly will run the business, and how.
Principals, and their roles, will be clearly indicated as well as their methods for effectively running the company.

Common Mistakes:

1. Failure to truly discuss principals’ strengths
2. “Over hyping” principals
3. Not offering concrete means for developing a positive work environment
4. Failure to show a true chain of command
5. Including non-essential staff as necessities

Moved to Running a Web Hosting Business Tutorials.

Looks good. Thanks for posting it. :)

Lois

very informative post specially for someone like me who is looking to start hosting buisness :)

Might I add: You don't want to get too big too quickly. Know your limits. Especially if you're just wanting to host a handful of people. =)

I would suggest that as with starting any business NOT checking with a lawyer at some point in the process could prove to be an incredibly bad idea.

Good Luck.

Interesting read, keep it up.

awesome tutorial, thanks!

Very nice. This is a good read for new and existing hosts.

Hi,

Thanks for the very comprehensive leicopter views of the common pitfalls. A great asset to newbie and established hosters alike.

Cheers !!

thanks a lot for the tips

Thanks for this tut, valuable reading!

very informative and useful! thanks :)

Mmmmmmm really nice and very usefull information for anyone planing to start a hosting business or even for anyone whose already in the business. :agree:

Good information, and if clubbed with what Serverpedia said innovation makes it great.

I must take a print and stick it on the pinup board in front of my desk.

Looks good. Do you have any suggestions about promotions for starting businesses?

Amanah

Starting new business:

If you have lot of funds, then google is your friend do some adwords, may be you can do some limited time promotional offers in places like WHT.

If don't have enough funds then best is to target local clients, you can get many of them with little personal effort.

Thank you,

What kind of companies do you think is the target market for hosting providers?

To start with, local web designers, IT solution providers/consultant, any one else who want to host a website.

To start with, local web designers, IT solution providers/consultant, any one else who want to host a website.

Makes sense, how about more demanding users?

If you know them and if you can handle them its fine.

Great and wise advice :P

great read cool beans TY for the post

You made some great points on things I didn't think about, thanks for the great pointers.

Good information, thanks a lot!

very informative thank u ....

good information, have done some of this mistakes myself

Very good information here. This will definitely help out those who are new to the hosting industry. I also would like to agree with you Serverpedia, innovation is truly a master key that all companies should have. You have to keep that mind rolling all the time in a creative manner in order to keep up with the technology as well as competition.

Moved to Running a Web Hosting Business Tutorials.

Looks good. Thanks for posting it.

really i want to find this kind of tutorials.

I couldn't agree more, great tutorial.

Thanks for the information, this will surely help me out with my new plan model. :)

Nice points.
I made some of these mistakes.

Decent information. I'd definitely give these ideas some thought before starting anything serious to all the newbies out there.

Hey great read thanks

Very nice post.

I have to agree with all of your points. The most common mistake is not setting the right price. Many new host think of there pockets no and worry paying for there cheap reseller.

Hosting companies do make allot of mistakes, one that I notice a quite often is when a new hosting company posts an advertisement in a forum's market place they expect that they will get customers right off the bat. This is far from true... statics show that it takes a client 7 views in order to go with a hosting company that they find in a forum. Which if they make a customer in the first 2 days then they are doing better than so many others. The reality is, a hosting company is not going to do the work for it's self, and definitely not at this time with all the new hosts coming into the market daily.

Basically, you are gonna have to work if you want to make it. You can't run your company on auto pilot and yet have a great company. The business world doesn't work that way, and life does not work that way. I believe that every hosting company out their who has a good strong team, rather it be 2 or 40 and also has the dedication required in today's market can make it in the industry as yet another good hosting company.

Nice post, should be made sticky in New members intro section.

Very informative tutorial..thumbs up..:-)

Wow, this thread was very informative and covered a lot of mistakes that could be fatal to beginning companies. This was a really good thread and definitely should be read by those whom wish to start their own web hosting company.

Competitive Analysis

(some people choose to include this in "Market Analysis," but
that is your choice): The section will show that you are fully aware of the competitive forces at work in your marketplace. It will explain your strengths over the competition, as well as how you will counteract their advantages and overcome (or compensate for) your potential weaknesses.

Common Mistakes:

1.Not identifying known major competitors
2.Underestimating competitive strength and potential
3.Failing to demonstrate what makes you better
4.Having no strategy for counteracting current (or emerging) competition
5.Assuming you have no competition
6.Failing to show an awareness of competitor’s plans in the market and their business
cycles.


In my opinion, competitive analysis is the most important factor to consider when setting up a hosting business. A business owner should be able to see very clearly how he is going to conquer the market. It's like going to a battle fully-armed and ready.

In my opinion, competitive analysis is the most important factor to consider when setting up a hosting business. A business owner should be able to see very clearly how he is going to conquer the market. It's like going to a battle fully-armed and ready.

I completely agree with this post, business owners going into ANY market should analyse their competitors when developing their business.

Thanks for the information! No Mistakes = Good Business ;)

Nice guidelines, that needs to be revised from time to time. :)

Thanks

Very Nice thread. This will be helpful to anyone looking to start or are already in business.

THANK YOU SO MUCH for this great tutorial! Hopefully I won't make any of these mistakes. Great information.

Thank you for this information. Have copied to reread again later

Some great info here

This is indeed a nice and useful article. Thanks for sharing.

Looks and sounds good thank you a lot :)