I've been considering getting into web hosting for some time, but my research indicates that I'm living in the most expensive place imaginable to run a business. Not only is there a $50 filing fee for the assumed name, but there is also a requirement to publish a notice of the assumed name in a newspaper for three consecutive weeks. Even worse, there's an additional fee in my city of $250 biennially for the privilege of running a business out of my home. (And these fees are just for a sole proprietorship--LLC's and corporations are even more!)

With all these fees, it's not worth it--I expect profits to be low (or nonexistent) at the beginning anyway, and the $400 or so I'd need to spend registering with the county and city (and publishing in a newspaper) would make it much worse.

Since I would be running a solely online business, though, I'm wondering if I really need to go through all of this hassle.

If yes: I spend a couple months each year in Michigan with family members. In this location, the filing fee for an assumed name is a mere $23. My state ID, however, is for the state where I spend the majority of the year. Is there any reason that I couldn't get a Michigan ID and file for an assumed name there?

Any advice would be appreciated.

You may have taxation considerations to worry about by making an end-run around your State... but generally speaking I think that most people will be more comfortable making a check out to a company name vs. a person.

I don't know what state you're in but all that sounds like a big hassle. Have you considered speaking with an attorney in your area? It may be worth the couple hundred he or she may charge for some initial advice and assistance just for your piece of mind.

I don't really have the resources to get an attorney involved--if I did, I'd just suck it up and pay the ridiculous fee the city of Chicago charges. By the way, I noticed I didn't mention it in my original post: I live in Chicago, IL, probably the most corrupt and most restrictive city in the country, where possession of spray paint is punishable by a $500 fine (seriously).

Anyhow, does anyone have any experience with registering an assumed name in another state? Since I plan on starting with just a reseller account or VPS, do I even need to register at this point?

You probably don't NEED to register a name to get your start.

We have quite a few Chicago-area customers... maybe what you're saying is part of the reason why! Well whatever you do, don't spray paint your name on your door. :0

The DBA registration and publishing is likely only something you'd have to pay every 5 years or so. If your business can't budget $100 every 5 years for those two things then your business plan needs work. Many businesses fail because of insufficient startup capital. If you're worrying about a few $50 payments... save more money first.

It comes down to how professional you want to look. If you want a business bank account and to accept money in the name of your business, they are most likely going to require you show publication of the DBA. ie, you might as well do it.

The DBA registration and publishing is likely only something you'd have to pay every 5 years or so. If your business can't budget $100 every 5 years for those two things then your business plan needs work. Many businesses fail because of insufficient startup capital. If you're worrying about a few $50 payments... save more money first.

The $100 every 5 years or so isn't the problem. Tacking on the extra $250 every 2 years that the city charges makes it somewhat unpalatable, especially when it's so much cheaper everywhere else. It's not that I don't have the money (though it would make up a significant portion of my startup capital), but rather that I don't like the feeling that I'm getting royally screwed.

It's hard to compare someone else's tax rates to yours and say you're getting "screwed" simply because you're paying more. (Unless you're fully taking into account what those taxes go towards.)

All things being equal, one municipality charging more than another would suck... but all things would never be equal. :)

Assuming this is the hosting industry you're talking about starting a business in, if $350 or so is a significant portion of your start-up capital... I'd advise you save a lot more.

It's hard to compare someone else's tax rates to yours and say you're getting "screwed" simply because you're paying more. (Unless you're fully taking into account what those taxes go towards.)


I don't want to sound like I'm whining, but I know I'd be getting screwed if I registered in Chicago. It's bad enough that our tax rates are higher here than most places (particularly, the sales tax of 10.25% is the highest in the country), but the additional $250 home-based business license is something that, to my knowledge, doesn't exist anywhere else. Everything that the city does works better where my family lives in Michigan, with the sole exception being Chicago's public transit system. Anyhow, my opinion of the taxes in Chicago isn't really relevant to what I'm actually asking.


Assuming this is the hosting industry you're talking about starting a business in, if $350 or so is a significant portion of your start-up capital... I'd advise you save a lot more.

Well, as I said, I plan on starting small--I'm not going to jump into a dedicated server or colo on day 1; rather, I planned on starting with a reseller account or VPS. This seemed to be far more prudent than dropping >$100/mo on a dedi before having any clients.

As I calculated it, the minimum start-up cost would be in the $30-40/mo range on a good reseller account (which typically includes a billing system and cPanel). The next cheapest would be a VPS, plus the necessary licenses (cPanel, WHM, and whatnot). I plan on developing my own site, so that's a cost that I would be able to avoid. So even when factoring in costs incurred from advertising, I don't see where I wouldn't be reasonably able to get started on <$1000. What do you think I should have to get started? Do you think that maybe my idea of starting with a reseller account is misguided?

Thanks for the feedback.

I'm the worst person to favorably discuss the whole reseller side of hosting :P

I realize there are a few success stories... but IMHO, more harm is done to the industry by the prevalence of hosts providing reseller accounts, and resellers.

I consider webhosting a highly technical service. The problem with resellers is that it becomes more and more of a "I collect the money, and refer you to the upstream for problems" service. It allows a lot of the people who want to get into it as a hobby or learning experience without having the prior technical or business experience one should.

IMHO, reseller hosting allows people to get into the industry too cheaply. Thus, when they fail, it's not a significant loss and a new host/s failing is no longer unexpected news.

That all said... yes, starting off with a reseller service is probably the way to go.

(I of course didn't do this... I saved up closer to tens of thousands over the past dozen years while gaining experience working for some of the largest hosting companies. Then I started directly leasing my company owned dedicated servers and such.)

IMHO, Shared hosting (which is mostly what reseller hosting is) is too low profit margin... it's all about bulk. It might take several hundred to thousands of accounts till you're making enough money to where it's a self sustaining business (ie you can live off of it). Too many people seem to think they'll be instantly picking up dozens-hundreds of accounts a month. Personally, I'd rather profit $100 from 1 customer then $1 from 100.

/rant off.

Again, that said... for what you're doing... yes reseller hosting is the way to go. But, bite the bullet and have a professional attitude from the start by having a "legit" business and such. To that extent, I wouldn't even recommend a sole proprietorship. I'd strongly recommend a LLC.

To the question of where you register... that depends more on where you want your public image to be. If you intend on publicly hiding all your addresses and such then it might not matter where you register (that of course will cause some/many potential clients to go elsewhere).