Hi there,

I've been working on starting a hosting business that hides the user from the complexities of setting up the website backend and only providing a dedicated website builder only (based on swsoft sitebuilder)...

MY dilemma is that i'm always thinking (at the back of my head) that I should be using that time becoming more proficient as a freelance developer!

I am currently working as a full-time web developer in asp.net and would like to have a secondary income-stream.

What is more manageable and profitable? freelance developing (part time) or owning a hosting business that only provides sitebuilder functionality for the masses?

Here is my take:

-= Freelancing =-
Advantages:
- i can take on projects when free to do so
- potential to earn alot of money part-time
- will help me keep my development skills in top shape for my fulltime job
Disadvantages:
- tough bidding for jobs against the billion other freelance developers
- can be slow getting new jobs at the start
- active income (have to code at work, than again at home!!!)
- not as many asp.net projects available as i'd like (guru.com, elance.com)
- alot of jobs pay very little, until you build your portfolio which my take ages!

-= Sitebuilder Hosting Business =-
Advantages:
- easy to manage
- easy to setup and start
- passive income (once the customers site is setup, it hums along at $25 a month! :)
- alot of potential customers... targeted to the masses!
Disadvantages:
- digressing from my core skills
- have to be on-tap for support, is this manageable (and fair to the customer) while having a full-time job?
- will have to help with design change requirements and designing (not my core skillset)
- will have to get alot of customers to get significant returns
- alot of competitors (moonfruit, homestead)

What do you think?

You could actually do both. There are reseller hosts who will provide end user support. What can work nicely is if you can cross-pollinate your two businesses.

You could actually do both. There are reseller hosts who will provide end user support. What can work nicely is if you can cross-pollinate your two businesses.

That is true, but i was actually planning on setting up the sitebuilder on a VPS which would allow me to continually upload new templates and extend the functionality of the product.. i was also planning on providing additional support like image editing and template modification (for an additional charge).

However, with my fulltime job, i dont think i could do both the businesses at once as my life would become one big blur sitting in front of the monitor all day and night. :(

That's probably the big question for you: how much time you have at this point in your life. No one can answer that for you, but I commend you both for your aspirations and for your recognition that there's more to life than work!

That said, a mix of products and services does make for a healthier business than either alone. Products are good because you can sell lots of them without necessarily increasing your time investment at the same rate as sales growth. Services are good because they tend to be long-term customer relationships, and often make up the bulk of sales, even if they're lower in gross profit and require time commitments.

Good luck as you weigh your choices. Maybe you want to consider ways of spreading some of the time commitment, such as taking on a partner or outsourcing what you can.

The other thing to look at is scale. There's only one of you, so consulting income is limited by the number of hours of free time you have.

Meanwhile, the limit for hosting income (even if you work alone) is much greater, as it is only requiring your time for support issues, etc. The main cost (at scale) for web hosting woudl be your equipment/bandwidth (i.e. non-human costs).

You can work out the numbers with some basic estimates. Just look at profit and time spent at different levels (# of clients) and you can work up a basic profit per hour of your time, and compare it between hosting and consulting.

The other thing to look at is that with consulting, you need to constantly get new clients each month to receive a steady revenue stream, while with hosting, each new client is paying on a recurring basis, so the cash flow is generally going to be more steady.