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  1. #1

    my buisness plan, please comment

    hey everyone.

    okay, i am biting the bullet and starting a hosting company as a reseller. i am looking to offer low cost, as well as great service.

    here is the break down of my expenses. (it ends up to be $100ish a month for a year(if you take the lump upfront sums and space them out over a years time)).

    Credit Card Proscessing
    Merchant account
    www.cdgcommerce.com
    Per Transaction: 2.30% + .35
    Monthly Statement: $10
    Monthly Gateway: $15
    Domain Names
    www.enom.com
    $100 deposit in account for domains @$8.95 each.

    Modern Bill
    Unlimited Clients - $24.95/month

    Hosting
    Host Dome.com
    For now
    Basic Reseller Account
    29.99/month

    SSL Certificate
    $50 installed*

    Website Template
    $50-90
    (that last one because i couldnt design websites if my life depended on it. lol)

    what i get from the people im buying my reseller account from:
    for $29.99/month
    40 gigs transfer
    5 gigs storage
    2 ips

    now here is a break down of my proposed pricing schemes.
    keep in mind, all packages include:
    PHP/CGI
    Server side java
    Persinal CGI bin
    many preinstalled scripts
    unlimited subdomains
    unlimited e-mail accounts
    front page extentions
    error logging
    C-panel 8
    Fantastico
    unlimited support tickets

    now my plans would be:

    Basic -
    150mb storage space
    1gig transfer
    price $6.95/month

    higher package
    400mb storage space
    4 gigs transfer
    price $9.95/month

    even higher package
    750 mb storage space
    10 gigs transfer
    price $15.95/month

    Highest package
    1.5 gigs storage space
    16 gigs transfer
    price $23.95/month

    i am also going to have sales reps, giving them a big percentage of each sale they bring in(not a clue exactly how much, but something in the range of 20% of each month or so)

    now i know i havent included advertising in my expenses. thats one of the places where i need help in. i have looked into google (ad somethign or another), but it is way to expensive for me.

    i am hoping word of mouth will work for a while, and maybe some free advertising or somthing.

    thank you for all your help
    Josh

  2. #2
    Join Date
    Nov 2002
    Location
    127.0.0.1
    Posts
    215
    Two Comments:
    (1) Your prices are a little expensive for the industry. You are going to have offer more for that price to get some customers.

    (2) About advertising. No one said it was cheap But it is worth it if you advertise in the right places. Try to advertise on hosting forums and other computer related sites. Try to get a cheap flat monthly rate to have your banner on their site. Also, try to advertise in unique places where other hosts haven't advertised before. Local advertisement works sometimes, but as another host, we started off pretty well by finding some good "uncharted" places to advertise. Find your secret place.

    Otherwise looks good. Make sure you have enough extra capital to afford something if something goes wrong. Good luck!
    www.HostDome.com
    MSN: [email protected]
    AIM: HDomeJosh
    EMail: [email protected]

  3. #3
    Hello Nygaff,

    I see it is an honest and a step in right direction from you.

    A business plan has to take in to account not just your expenses but a multitude of other things.

    For example some of the very basic things:

    1) breakup your costs in to fixed and variable. Fixed being costs that you will incur to get the business rolling (infrastructure) and variable being the cost you will incur on a per customer basis. (Count in the opportunity cost - your time)
    2) estimate the number of sales you are expecting, per/month and per year.
    3) Using these esimates calculate how much revenue per/month and per/year will you generate.
    4) Using the above two you will have a fair idea of how your cash flow will be on a monthly basis and you will be able to determine your breakeven point.

    It does not just end here, but you will need to work on where you will get your finances from, what is your target market, how you will reach this target market (advertising plan), what datacenter you will choose etc ... etc ...

    Originally posted by Paint
    Two Comments:
    (1) Your prices are a little expensive for the industry. You are going to have offer more for that price to get some customers.
    As for your prices, your primary consideration should be your cost and NOT what the competition is charging. Remember, if the target market you are appealing to is isolated and untouched (niche) you can charge a premium price for your product/service.

    Hope this helps,

    Regards,
    Last edited by mediopia; 05-27-2004 at 11:01 PM.
    Mediopia Technologies, Inc - Call Toll Free (24 x 7): 1-877-807-HOST
    Windows and Linux Reseller and Shared Web Hosting Plans
    SiteStudio, ASP, ASP.net, PHP, CGI, Coldfusion MX 6.1, Frontpage, MS SQL Server, MySQL, PgSQL ...
    http://www.mediopia.biz/

  4. #4
    Hi Nygaff,

    I think youve put together a well thought out plan...

    Dont listen to the pricing arguements - you dont have to be the cheapest - actually - I would aim to specifically not be the cheapest and back it up with a superior service..

    I think you could reduce your total costs (including money and time) by choosing to get started on an hsphere account - as hsphere integrates billing, managment and helpdesk - but, Im biased..

    Hope this helps...

  5. #5
    Join Date
    May 2003
    Posts
    475
    Hello Nygaff,
    I think you should get a 2checkout or paysystems account instead of your own merchant account.

    also you may consider whmautopilot instead of modernbill. WHMautopilot is cheaper and it will be much better once V3 is released.
    Dixiy.com - Professional Web Hosting Provider since 2002
    AutoCreation.net - Automation Solution for cPanel Hosting! + Illegal File Scanner
    WHDir.net - Your complete Web Hosting Directory with Hosting/Server Tutorials

  6. #6
    Join Date
    Mar 2004
    Posts
    93
    Nygaff

    Good for you making a plan and trying to follow through. You don't need to have the perfect plan to succeed you just need to have thought things out (which you have) and plunge in. As you work through things you will learn from your mistakes and hopefully learn even more from your successes.

    This is a crowded industry however there are alot of people who are not running the businesses very proffessionaly. Provide a good service and consistently work to improve your business proccess in addition to your product and I think you will do well.

    Personaly every person is going to have a different view of how you should start your business. If it were me I would be using different companies. But I believe you can be successfull with the decisions that you are making.

    Asking for advice is a good thing, but make sure it does not slow you down. If you have thought things out then your done, no need to over think things.

    Take the plunge and best of luck to you.

  7. #7
    Join Date
    Apr 2004
    Location
    Texas
    Posts
    163
    Credit Card Proscessing
    Merchant account
    www.cdgcommerce.com
    Per Transaction: 2.30% + .35
    Monthly Statement: $10
    Monthly Gateway: $15
    Domain Names
    www.enom.com
    $100 deposit in account for domains @$8.95 each.

    Modern Bill
    Unlimited Clients - $24.95/month
    First dont worry about your pricing being high .. Looks about right enough to me.

    Second 2checkout only costs $39.00 to set-up no monthly fees and also paypal only charges a fee per transaction with no set-up charges.

    With modernbill, I am partial to WHMAP its cheaper and more user friendly you may also find a host that offers this free with a annual prepaid contract.

    But also phpcoin (Never used it...) is a free billing software or Whois.Cart which runs about $35 I think for a purchased Lic.

    Hope that helps

    Regards,
    Lee
    DSL WebHosting Solutions
    Fast Affordable WebHosting Solutions
    24/7/365 Support

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