I'm sure you all know me and that I seem to leave all the time, but I am really wanting to start my own hosting company. Of course, it'd be a small, niche company for my local area, but just a few questions about it and should I attempt to start it in this economy.

1.) I'm currently working about 20-30 hours a week at home and I don't want to leave the job, so would you think 10-20 more hours a week would be enough to successfully run a hosting company in my local area?

2.) If I were to start this company I would most likely need to seek out a business loan as right now I don't make enough to live on and run this. Some of you might be saying stop, don't attempt it now then, but I'm very interested in starting this.

3.) I have a few skills in the server management area, so the server hardware, software so I'm 95% confident I can handle that, if not I know quite a few people that can answer questions for me, etc. Anyways, the billing software is what I would have trouble with. What software would you recommend and would you recommend I buy a simple, 1 install license (if that's possible) to mess around with for a few months first or just go along as I run the company?

4.) I'm getting a dedicated server first, since I'm comfortable with Linux OSes, but what kind of specs. should I look at getting for the beginning? I've really got no idea about how much resources Apache, MySQL, etc, etc would use, so I need some advice on that.

Since the economy is doing so horribly right now, should I even attempt to start up a business if I'm attempting to get a loan for it? Or is this part of the business world still doing okish for a new company? I know there are millions of hosts out there, but I feel that in my area there's a need for small business hosting, so I think I'm up for it. Just wanted to get a few things answered and all. Also, if you have any other information that would be helpful for me, please do post it. I'll be working on a business plan for a few weeks at first though since that usually makes or breaks you.

Thanks in advance.

I'm sure you all know me and that I seem to leave all the time, but I am really wanting to start my own hosting company. Of course, it'd be a small, niche company for my local area, but just a few questions about it and should I attempt to start it in this economy.

1.) I'm currently working about 20-30 hours a week at home and I don't want to leave the job, so would you think 10-20 more hours a week would be enough to successfully run a hosting company in my local area?

You'd be pushing it pretty tight, I don't get lots of support tickets, but I market and advertise my company wherever possible. I spend probably a good 50 hours a week just getting my name out there, then about 25 hours a week working on my servers.

2.) If I were to start this company I would most likely need to seek out a business loan as right now I don't make enough to live on and run this. Some of you might be saying stop, don't attempt it now then, but I'm very interested in starting this.

Loan? Why would you get a loan so quickly? Start smaller since you will be local, and don't take the risk of not being able to pay off a loan later. If you grow, then get a loan perhaps and expand, but make sure you write out a clear and goal driven business plan.

3.) I have a few skills in the server management area, so the server hardware, software so I'm 95% confident I can handle that, if not I know quite a few people that can answer questions for me, etc. Anyways, the billing software is what I would have trouble with. What software would you recommend and would you recommend I buy a simple, 1 install license (if that's possible) to mess around with for a few months first or just go along as I run the company?

Billing software: WHMCS
*You will be running a web hosting company, so WHMCS would be 100% perfect for you, not to mention it's got hundreds of add-ons and modifications and probably is one of the easiest template systems to work on, just got to read up on Smarty.

4.) I'm getting a dedicated server first, since I'm comfortable with Linux OSes, but what kind of specs. should I look at getting for the beginning? I've really got no idea about how much resources Apache, MySQL, etc, etc would use, so I need some advice on that.

Why get something so big, so quick? Start with a VPS since you do have software knowledge, etc...
You will be able to experiment with minor restrictions, I recommend LiquidWeb or SingleHop (If you decide to go with a dedicated), those are my two personal favorites.

Since the economy is doing so horribly right now, should I even attempt to start up a business if I'm attempting to get a loan for it? Or is this part of the business world still doing okish for a new company? I know there are millions of hosts out there, but I feel that in my area there's a need for small business hosting, so I think I'm up for it. Just wanted to get a few things answered and all. Also, if you have any other information that would be helpful for me, please do post it. I'll be working on a business plan for a few weeks at first though since that usually makes or breaks you.

The economy isn't necessarily bad for the hosting market, it's not "amazing", but definitely not bad. I studied the ups and downs for a few years before getting into all this, and realized it could be worse when you think about the past. I've been able to get clients and stay "alive" so far though, 4 months of public operation and counting. You'd have a much better chance since your staying local though, if you could get a small group of people to pay you for "Premium Hosting" and you offer high quality customer service (answering the phone when your sitting at dinner and staying up for six hours to fix something), then you could make it. You could also just do cheap, low cost hosting for locals and that would also work, although you'd need to offer it to more customers and small businesses.

Thanks in advance.

Anytime ;)

It's never a bad time to start something. But keep in mind that locals tend to look for a complete hosting package including web site design / implementation.

Regards

To add to the points made by others above, I think that you may really want to first look at your strategy for sales & marketing and try to: (a) define the customer that you are going to be going after, (b) determine how you are going to reach out and make them aware of your service and sell them on it, (c) make sure that you fully understand the time & services that you'll need to commit and provide to achieve (a) & (b).

The reason why I bring this up is that the rest of the process - setting up a VPS or server, a Web site, billing systems, etc. is often the "easy" part. The "harder" part is to figure out exactly how you are going to build your customer base in the first place and to make sure that your business plan will accomodate what is needed to do that AND the needs of your target audience.

In terms of the question on whether now is a good time... I think with the right business plan, any time can be a good time and in fact you have the added benefit of being able to fine tune your business plan FOR current economic conditions. For example, you might be able to figure out a good target market to go after which is naturally less prone to economic downturns or which is in a good position to weather the current economic chaos. Or you might figure out a clever marketing angle to leverage the economic downturn as a positive for people to use your service versus others.

Correct me if i'm wrong, but I think the online community is actually thriving in the global economy. It may have gone down some... but not a ton. This is where its at right now.

The key to running a successful hosting company is good customer service.

All in all, I think if you plan realistically (factor in economic conditions as a pp said) and advertise effectively, then you will accomplish what you set out to do with this!

Best of luck to you! :)

You should do it, but start small and don't go get a dedicated server right away. Build your customer base so spend less out of pocket and have more ability to cover your costs which is important in a tighter economy. As someone said if you have good customer service skills then you should be able to pick up customers and grow at a rate you can more grow with and handle. Good luck!

As long as you pick your target market based on the current economy, it has a chance. My business has been going downhill for the last several months, but I'm just about ready to reverse that. 5 months ago our clients were just about 1/2 and 1/2 business and personal sites, but with the economy, we've had a few cancellations in the last few months and several who just don't pay and don't bother replying to our billing emails, BUT...
All but one of them was a personal site.

It's simple, people have more important bills than their personal website, but to businesses, a website is still a good return for their money, so we're just about to launch a new advertising campaign focusing on local businesses, to be more exact, new local businesses. I know once we launch our new campaign things will pick up again.

It's a lot harder to get clients right now than before, but it's still do-able.

However, if you aren't able to put 24/7 support into your business it will most likely fail.

You mentioned you had another job -- what happens if the server dies while you're at work, you'll wait 8 hours to fix it? Clients will leave you after 2 hours of being down ;)

Thanks for the information and advice, it's really helped me determine if I should do this. Before I do anything though I need a plan, so off to work on one.

It's a lot harder to get clients right now than before, but it's still do-able.

However, if you aren't able to put 24/7 support into your business it will most likely fail.

You mentioned you had another job -- what happens if the server dies while you're at work, you'll wait 8 hours to fix it? Clients will leave you after 2 hours of being down ;)

My other job is a work at home, and I can normally do the job with my eyes closed I know it so well. So, I'm not really worried about it interfering, it's just the amount of time I'll have that's a bit worrying.

Time is a huge consideration. This can consume you and get out of hand if not managed properly. However, it can and is being done by lots of entrepreneurs worldwide. Why not by you? The best of luck with your new endeavor.

You may want to start with a reseller account

dude, in my personal opinion..there's NEVER a bad time to start something. Warren Buffet made his billions in hard economic times. it's during these times tat there's plenty of opportunity around. with the web hosting industry set to expand further, no harm getting abit of the pie right?

anyways, to answer your questions..

if u intend to focus on local area, y dont u start off with reseller account? juz need to focus on business side n marketing of your packages.

frankly i dont see a need to get a loan. was kinda shocked tat you brought the subject of getting a loan for a webhosting business coz starting a webhosting business is quite simply low cost. to me that is.

next, u reallie need a business plan. if your local area is what u aim for, so be it. if your local area has 2000 businesses and 20% of them are your clients, that's 400 clients..

the lifeblood of any business is traffic. so, focus your efforts on getting traffic to your site and services. distribute flyers to local businesses in your area. run a promotion.

all this needs to be done which is y, maintaining the server is the last part of my priorities (i leave it to the reseller companies to handle those things while i stabilise my business plan)

moving forward is of coz to have your own server and all.

my advise is to start small...give yourself targets..then move forward...even if you fall..its easier to regroup and move forward.

good luck!

This debate has been raging on for years. Do you bite the bullet and get the dedicated, or do you start smaller and get a VPS/reseller account first?

Things to contemplate:

1) Cost: Obviously, in this economy, with the limited amount of capital being readily available for startup companies, you've got to decide if your new company is financially capable of spending the kind of money required for the hosting environment of choice. A solid VPS can cost anywhere from $15 - $250 per month, depending on how much memory and drive space you need. A simple, single-processor dedicated server can cost anywhere from $60 - $600 per month, as per the same criteria.

2) Uptime: The amount you spend may dictate the quality of hardware and/or the network redundancy. Higher-traffic sites need high-availability for both of those criteria. If your enterprise site(s) explicitly require 24/7 uptime, you'll want to pay a little bit more for those hosting companies with long track records of solid service and availability. If you have a bunch of Mom & Pop businesses that wouldn't notice a minor bump in the middle of the night, you can probably deal with a lower-cost alternative that don't utilize a dozen bandwidth providers. If you can find low-cost with dependable networking & solid hardware, congratulations.

3) Management / Experience: How much server administration experience do you have? Be honest with yourself. Always remember, a VPS requires just as much work as a server. If one of your customers requires a PHP mod be included into the Apache configuration, will you know how to do that? What about updating PERL installations? If you don't, and you're building from scratch, be ready to have a test environment and do lots of reading with plenty of command line experiments. Otherwise, pay the management fees, which are usually minimal, and let those with experience do it for you. Remember, always get a detailed assessment of how the problem was fixed, so that you can do it yourself next time. Don't let Tech Support talk over your head.

My suggestion: If you want to start small, get a Linux VPS with cPanel or Plesk and experiment. Get some sites online and get traffic flowing. When you're ready, you can easily package your accounts and move them to a dedicated server with the same control panel. If you think your sites will start getting a sizable amount of traffic right away, start with a smaller dedicated server. Price ranges for decent VPS vs. decent dedicated aren't really that far apart. Finding a company that allows for scalability is a strong match for those starting out small.

In any situation, I wish you the best of luck in getting setup and initiating your hosting experience!

Correct me if i'm wrong, but I think the online community is actually thriving in the global economy.


Google just laid off 100s of people. I think the economy is affecting everyone.

To the OP: You absolutely do not want to get a loan. There's no need for it. Get a reseller account and sell some hosting to local businesses. Your expenses, if you're doing everything by yourself for awhile, will be minimal. Just make sure that you have a solid business plan and plan for future growth. Selling hosting for $2 just won't cut it because you'll never be able to afford to hire help.

--Tina

Getting a loan will not be easy by any means. However, if you can bankroll the venture yourself then this may be a good opportunity. You can pickup servers for a pretty good deal, as it seems like every datacenter is running deals now.

I agree with the above post, unless you are 100% dedicated to this and are willing to invest a lot into it, do not try to get a loan. If this is more of a hobby to you then just start off with a reseller account and work your way up.

3.) I have a few skills in the server management area, so the server hardware, software so I'm 95% confident I can handle that, if not I know quite a few people that can answer questions for me, etc.

My two cents on this is that hosting is becoming less and less about the technical skills and about the service you deliver, how you package it, and how you market it. Five years ago, strutting your technical know-how and selling ping, pipe and power worked. That business is now a commodity and mainly driven by price. With many large business providing hosting for less than $50.00/year, I think you will find it challenging.

Could you tap contacts and build a portfolio of clients? Likely. Could you turn this into a competitor to the major players in the shared hosting market -- not without significant funding, marketing, and a good plan.

My two cents on this is that hosting is becoming less and less about the technical skills and about the service you deliver, how you package it, and how you market it. Five years ago, strutting your technical know-how and selling ping, pipe and power worked. That business is now a commodity and mainly driven by price. With many large business providing hosting for less than $50.00/year, I think you will find it challenging.

Could you tap contacts and build a portfolio of clients? Likely. Could you turn this into a competitor to the major players in the shared hosting market -- not without significant funding, marketing, and a good plan.

I have to agree. The real competition is in defining your niche and customer service skills. The fact of the matter is, there are a bajillion hosting companies out there who offer similar packages, have similar jargon to their sites and even some with similar site layouts.

From what I understand, you have to bring your game to the table if you want it to be a success.

Still, with your technical chops, you could always hire a virtual assistant to route the customer service requests and be the front-line for your company. Just a thought. Because I know many awesome techs out there who would rather not deal with customers.

The bottom line is you need to do what you feel is good for you. You can also get a VPS from a company and hire their people (for a monthly fee) to help you with the customer support.

Where there is a will, there is a way.

That might be what I'll do. Find someone interested in being a partner and starting it with them. They handle the customer service skills and I do the tech stuff. Still got a long ways to go before I'm even started as I'm only like a page into the business plan.

I would say NO! It's not a bad time to start. Start today with a reseller and build your way up. Web Hosting has always been competitive but there's always customer's there. Provide great support good product's and you should do fine.

Define growth.

Growth = Making more money faster = Advertise locally!

$2/mo hosting plans will get you nowhere. Package hosting, design, and most importantly maintenance into a customized package for each possible client. I have focused on maintenance and I have seen a growth of over 300% this year.

If you've got the knowledge to support your clients and the motivation to keep at it then you'll be fine :D
Just don't give up!