Results 1 to 25 of 25
  1. #1

    Minimum investment to start a web hosting business?

    As most of you have been in the business for a while or even those of you who have started a few months/years ago, what is the average startup investment capital that we would need to get this going?

    I'm coming up with less than 10k starting small(catering to small businesses at first). I think I've covered all of my start-up costs after reading through all of these forum messages including adding those costs which are normal in business startup costs(rent, utilities, etc etc). We are not a reseller and will be a full web hosting provider leasing our own servers.

    What number did/is everyone else coming to?

    Brent Clements

  2. #2
    A lot of people start out as a 1 man show, and that helps to keeps costs really really low. Just need food and an internet connection . However, it sounds like you've got at least 2 people on this venture...are they partners or employees?
    A Collection of Web Hosts
    Small biographies on hosts, uptime reports and some reviews
    Feel free to add your review or add a host that isn't on the list.

  3. #3
    Join Date
    Jan 2004
    Boise, ID
    You can start good or start on a dime. Depends on what you are seeking.

    1. Servers - $50+ depending on where you go and quality you are seeking.
    2. Offices if necessary - varies by area
    3. Company phones w/ toll free - Average $75-$100 per month single line includeing LD
    4. Corporate or DBA paperwork or other company papers - Anywhere from $25 - $500 depending on state and what option you choose.
    5. State and federal tax ID. - Free if you do it yourself usually. Can be expensive if you have someone else do it.
    6. Billing system - Free to $500+
    7. Accounting System - $100-$5,0000
    8. Helpdesk Software - Free to $1,000+
    9. Website - Free (ecept time if you do it yourself) up to $5,000+ depending on who does it and quality
    10. Advertising - Varies on where what when, etc..

    There are your basics.

    Then you just have to be able to handle the costs for at least 5 months on your own.

    Forgot the Merchant account. If you check around = Free just monthly costs.

  4. #4
    my startup capital: $10 lol
    i had everything else and i got a couple of people to pay for the reseller account.
    so i get 100% of the profits
    Cheap Web Hosting:
    Website Design - Scripting:

  5. #5
    You really don't need alot of money, with $100 you could start a great going business.

  6. #6
    Join Date
    Jan 2004
    Boise, ID
    He had said he is starting it full with Servers. So this isn't a situation of a reseller account, DBA, little website, and an email order form.

    He also has stated he has 10K. Easier to start it right then to have to fix it later.

  7. #7
    Yes we figured it would take 10k to start this right, but my gut feeling is that this number is too low. My former experience in setting up an isp(I know I know, this is different than setting up a web hosting business) was that it cost around $150k to start.

    What number have you all invested to start your business correctly.


  8. #8
    Join Date
    Jan 2004
    Boise, ID
    You don't need 150K.

    We started ours with an invested of $500 per month, that's it.

    Atlhough we already owned the Accounting software (about $5,000 for what we use).. But you can use quickbooks -about $200.

  9. #9
    Join Date
    Mar 2004
    I think you miss out support services (outsourcing) if needed to since they don't seem to have a team of technicians.

    Also hosting softwares and other software purchasing?

    *Optional: Domain Name account with deposit?

    Just to point out.

    DOn't forget your working capital.

  10. #10
    Join Date
    Jan 2004
    Boise, ID
    Well, I would have thought starting out they would probably do the support themselves.

    I did include billing/helpdesk. If they go with a leased linux server from a decent company the rest is already there.

    And you always need working capital. I fully agree there.

  11. #11
    We have not included outsourced support. For the first year, we will do this ourselves until we grow big enough to afford outsourced tech support.

    We've also factored in billing software(modern bill) already.

    DDIHosting, your number, around $500.00/month operating cost is about what I figured. I'm up to $630.00/month.


  12. #12
    Join Date
    Jul 2003
    Satyr, Chrisalya, Canada
    Using ddihosting's list:
    1. Servers - Servermatrix or Nocster - $100 + 120/mo
    3. Company phones w/ toll free - Vonage + Telcan - $60/mo
    6. Billing system - Modernbill - $25/mo
    7. Accounting - Quickbooks Pro - $300
    8. Helpdesk Software - Kayako - $25/mo
    9. Merchant Account - Modernauthorize - $25/mo
    10. Domain account - ModernDNS - $100
    11. Outsource support - $40/mo

    $500 one time
    $295 per month

    That should get you a pretty decent setup.

  13. #13
    Join Date
    Feb 2004
    I think time is more of the essence rather than money. You can have the highest quality hosting business on the net with the best tools and accessories and not be successful due to the absence of time. If your like me when I started, this can be a hassle, but once you get passed that point your all set to hire more employees.
    Cory Pippen
    San Diego Direct Web, LLC

  14. #14
    I would buy retail software
    better in the longrun

  15. #15
    Join Date
    Mar 2004
    You mean something that doesnt have recurring payments?
    Like client exec is just one time 99$ where as modern bill is monthly, like an accounting software is one time expense sometimes, and helpdesks which are all one time. Is that what you mean shraz? If not please let me know what you meant thanks
    "Web Hosting is not just about selling space, it is about facilitating customers needs with your plans and supporting the customer for a long lasting mutually beneficial relationship."- Yaser

  16. #16
    If you've got the money to spend and you know you'll be in business a year from now, it's worth buying the software. Hence: Plesk, ModernBill, etc. The leases are nice for the One-Pop Shop that wants to start out smallconcentrate on breaking even quickly, and test the waters on a small budget.

  17. #17
    do you think purchasing a server and colocating it would be better than renting a server in the long run if you were just starting up?

  18. #18
    Join Date
    Jan 2004
    Boise, ID
    I believe it is better to lease. We had the funds to co-locate and the reason we didn't is due to the fact that you have to make the cost viable over long periods of time.

    The conclusion we came to was that until we needed between 100-200 servers it was not cost effective to co-locate servers.

  19. #19
    Our ultimate goal is to own about 10 racks of our own which we stick in a colocation facility and then rent out our own dedicated servers. On a side note, My partner and I are actually HPC/HA cluster experts who would like to implement some of that technology and market it to customers to host grid computing applications.


  20. #20
    In all these posts I don't see anyone talking about how much money you need to get paid, although Evan touched on it a bit. Let's add these questions in before a solid answer can be given;

    1) Are you doing this full time?
    2) Are you doing this alone?
    3) If you are doing this full time how much money does it take for you to live on for say the first year of business? $30,000? More?
    4) If you have more than one person doing this full time how much do you both need to live on for the first year?
    5) What about Accountants?
    6) What about Lawyers?
    7) What about Insurance?
    8) What is your time worth?

    The answers to these questions will help define your initial costs. It's also advisable to be able to carry these costs for the first year not just a few months.

  21. #21
    Well we've already figured in those costs including setting salaries to $0.00 which we are luckily able to do because we have another business that keeps us pretty safe financially. One of the partners will be doing this full time and contracted out at a $0/hr rate.

    There is a book that everyone should read. "Starting a business with little to no money". It is a great book that teaches you how to negotiate, barter and beg your way into financing, supplying, and furnishing your business. For instance, I found a pretty good business lawyer that is trading space for hourly rates of $35/hr(off 170 bucks from his morning rate).


  22. #22
    Use GNUCash for your accounting system

  23. #23
    Quote Originally Posted by bclem
    <snip>including setting salaries to $0.00 which we are luckily able to do because we have another business that keeps us pretty safe financially.
    Ok I'll bite, if you have another business venture that keeps the cash flowing while not taking up your time why on earth would you want to start a business that will take both your money and your time to get started?

    Apart from that, subsidizing the start and 1st year growth of a hosting business is a great way to go, that is exactly how we started...

  24. #24
    Because I guess I enjoy torture.


  25. #25
    Originally posted by Watcher_TVI
    if you have another business venture that keeps the cash flowing while not taking up your time why on earth would you want to start a business that will take both your money and your time to get started?
    Expanding.. to get more money.. to expand some more. Also, wouldn't it be boring just sitting there raking in the money? I would find it boring.. I would much prefer a challenge.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts