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  1. #1
    Join Date
    May 2008
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    Missouri
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    Help with a company

    Hi,

    My names Patrick Nett, and I've been around the hosting market for a while. Just recently have I caught interest in the web hosting industry, I previously came from the game server market. I'm looking forward to dropping $15,000 - $25,000 investment here in the next few months, I was just wondering if there are any points/tips you established providers could give me on what I should be spending my investment money on. For example, how many staff and what pay would you recommend? Google ADS yes/no? How much would you pay for servers to start off, etc.

    Let me know if you can help! I've got my skills in the administration area along with a good basic background knowledge with the hosting market these days. I will be in need of assistance to point me in the right direction to get my company moving. Right now I'm being joined by a couple co-founders who are in the car dealership business with me, and my source of funds is backed by the net income of my local restaurant. I'm quote positive I can stay in the business for years without a single client signup, so that isn't a worry. I would just like your thoughts and suggestions on how I can get moving...

    thank you,

    Patrick
    Patrick Nett | E-mail: Patrick.Nett[at]Gmail.com

  2. #2
    Join Date
    Jul 2009
    Location
    Indiana
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    2,193
    Well of course it's more complicated than this, but I'll cover the basics.

    1. Infrastructure - With that kind of budget, I'd look at colocation. It can save a lot in the long run, especially for high end servers. This is a matter of opinion, but we prefer to run a smaller quantity of higher end servers, all colocated. Each server carries overhead in licensing costs, management time, power usage, etc. You can get some good colo recommendations on here, but that's probably worth a whole new thread.

    2. Customer Portal - Obviously you need a site etc etc, I'd get a designer with marketing experience. Conversion rates are very important, web hosting customers have a high cost to acquire. Also your billing system etc, but that's all very simple stuff with WHMCS.

    3. Staffing - Of course starting out you'll probably want to outsource, rather than hire your own 24x7 staff. You can go for a USA based support firm or use a place like WebbyCart (in India I believe). Others will have some more useful suggestions.

    4. Marketing - I'm not a marketing expert, but in my opinion Google ads are a complete waste of money. We rely on mostly word of mouth (by far the best marketing strategy in existence). We also do a lot of SEO, which I prefer since it's a more long term way of going about getting traffic. Remember with the high cost for good web hosting traffic, conversion rates are more important here than with most businesses.

    Of course there may be slight twists on everything I just said depending on your niche, but that's a general outline of the choices you have, and how I would go about setting things up.
    Sam Barrow - CEO @ SQUIDIX (1-855-SQUIDIX)
    Ask Us About Sponsoring Your Web Site (High Traffic Sites Only)
    Squidix - Shared, Reseller, Semi-Dedicated, Managed VPS and Managed Dedicated Hosting
    Midwestern Web - Web Design & Development Services

  3. #3
    Join Date
    May 2008
    Location
    Missouri
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    Sam,

    Thank you for the prompt reply. Yes that's a lot of useful advice and exactly what I'm looking for! I was afraid of some flame posting in this thread

    Thanks for the help, I'll be looking for more replies!

    Is outsourced support reliable and trustworthy?
    Patrick Nett | E-mail: Patrick.Nett[at]Gmail.com

  4. #4
    Join Date
    Mar 2011
    Location
    London
    Posts
    21
    i have no intention to be rude, but can i ask why you choosed this field? I think there are more than 100.000 hosting companies. Why dont you try to buy an already hosting company which already has a previous SEO in background and some clients? It will be much easier for you.

    With a budget of $15,000 - $25,000 im defenitely sure you will find a good hosting company ready to be for sale.

  5. #5
    Join Date
    Jul 2009
    Location
    Indiana
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    Quote Originally Posted by PatrickN View Post
    Sam,

    Thank you for the prompt reply. Yes that's a lot of useful advice and exactly what I'm looking for! I was afraid of some flame posting in this thread

    Thanks for the help, I'll be looking for more replies!

    Is outsourced support reliable and trustworthy?
    Well like anything it varies from company to company. I'm sure some is great and some is terrible.

    I've worked with WebbyCart for server admin jobs, they've been pretty good. Never used their support though. I'm sure someone else on WHT will have some better recommendations. We handle all of our support in house so I don't know too much about that market.
    Sam Barrow - CEO @ SQUIDIX (1-855-SQUIDIX)
    Ask Us About Sponsoring Your Web Site (High Traffic Sites Only)
    Squidix - Shared, Reseller, Semi-Dedicated, Managed VPS and Managed Dedicated Hosting
    Midwestern Web - Web Design & Development Services

  6. #6
    Join Date
    Jul 2009
    Location
    Indiana
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    Quote Originally Posted by doncorti View Post
    i have no intention to be rude, but can i ask why you choosed this field? I think there are more than 100.000 hosting companies. Why dont you try to buy an already hosting company which already has a previous SEO in background and some clients? It will be much easier for you.

    With a budget of $15,000 - $25,000 im defenitely sure you will find a good hosting company ready to be for sale.
    It is a saturated market, and yes you might want to consider buying a company to start off.

    I myself hate doing this, but it may be something to consider. Every time we buy a company everything is so disorganized and inefficient I wind up doing a ton of work just to fix their mess.

    It really depends on your niche and how specific your business plan is though.
    Sam Barrow - CEO @ SQUIDIX (1-855-SQUIDIX)
    Ask Us About Sponsoring Your Web Site (High Traffic Sites Only)
    Squidix - Shared, Reseller, Semi-Dedicated, Managed VPS and Managed Dedicated Hosting
    Midwestern Web - Web Design & Development Services

  7. #7
    Join Date
    Feb 2005
    Location
    London, England
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    965
    Quote Originally Posted by SamBarrow View Post
    It is a saturated market, and yes you might want to consider buying a company to start off.

    I myself hate doing this, but it may be something to consider. Every time we buy a company everything is so disorganized and inefficient I wind up doing a ton of work just to fix their mess.

    It really depends on your niche and how specific your business plan is though.
    Every market is saturated, its the basics of business, supply and demand
    Jon Black

  8. #8
    Join Date
    Mar 2011
    Location
    London
    Posts
    21
    its all about the competition, how strong they are. selling cars is a saturated market, but selling expensive cars not. this is the trick.

  9. #9
    Join Date
    May 2008
    Location
    Missouri
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    Thanks for the information guys, it was a lot of help and gets me thinking.

    I don't like purchasing other companies. If their company has potential or is going anywhere, why would they sell it? I've sold many of my local businesses and I lie to them saying "Oh, I'm just getting tired of my business or too much hard work" you know? Having experience from that, I don't like purchasing other businesses.

    I'll look into outsourced, but I think I prefer in-house.

    I might just do a $5,000 investment or somewhere around that range, and expand if I see any potential in the company. It doesn't seem like it cost much to invest in a hosting provider
    Patrick Nett | E-mail: Patrick.Nett[at]Gmail.com

  10. #10
    Join Date
    Jul 2009
    Location
    Indiana
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    Quote Originally Posted by PatrickN View Post
    Thanks for the information guys, it was a lot of help and gets me thinking.

    I don't like purchasing other companies. If their company has potential or is going anywhere, why would they sell it? I've sold many of my local businesses and I lie to them saying "Oh, I'm just getting tired of my business or too much hard work" you know? Having experience from that, I don't like purchasing other businesses.
    Good point.

    Quote Originally Posted by PatrickN View Post
    I'll look into outsourced, but I think I prefer in-house.
    In house is nice to have, but you can't justify the costs unless you have a ton of customers, especially if you want 24x7.

    Quote Originally Posted by PatrickN View Post
    I might just do a $5,000 investment or somewhere around that range, and expand if I see any potential in the company. It doesn't seem like it cost much to invest in a hosting provider
    Keep in mind that infrastructure is a small part of that. Where the real money comes in is marketing and human resources.
    Sam Barrow - CEO @ SQUIDIX (1-855-SQUIDIX)
    Ask Us About Sponsoring Your Web Site (High Traffic Sites Only)
    Squidix - Shared, Reseller, Semi-Dedicated, Managed VPS and Managed Dedicated Hosting
    Midwestern Web - Web Design & Development Services

  11. #11
    Your money will go fast once marketing and hired help gets involved so make sure you budget in extra time for gurellia marketing if you want to grow on that kind of budget

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