I've never "financed" anything; if I didn't have cash-on-hand to do it, I didn't do it.
I started out on the web by building a website for my bricks-and-mortar gift shop. That original gift shop's hosting plan was paid for by the sales made from it. I never had a month where I didn't sell at least as much as the hosting cost.
I upgraded to a reseller-type account, started building other peoples' sites (friends are a great place to start!!!) and built a couple of my own hobby sites. I started to collect domain names with brilliant ideas of how I would develop them in the years to come. (LOL, haven't we all been there?!) The sites on that reseller account always brought in enough money to pay for the hosting.
At a point where I had sufficient money coming in to pay for a dedicated server, I upgraded to the dedi.
Now here's a funny story...
The winter I decided to upgrade to a dedi, I was stuck in bed for months on end with a bad, bad case of pneumonia. All I had energy and physical capacity to do, was lay there and read and type. I went through the business numbers and seeing as income from hosting those acquaintances' sites and my own projects was consistently bringing in enough to cover a dedicated server, I went ahead and decided to go ahead and order a dedi.
Within 48 hours of making that decision (but I hadn't actually ordered it yet) I was contacted by a data center who wanted me to help them with online sales and moderate their boards for them. The arrangement included the use of a free dedicated server to play with and learn on. No better way to get your people up to speed than to give them a box to break. Well... of course that worked out perfectly in terms of my personal plans!
That was four years ago.
Today a server is not ordered if it cannot be paid for outright. The business is run using a JIT model which is very easy to do in hosting, unlike many other industries (particularly specialty retail which is where my roots are). The business is growing steadily and completely in the black.
Now as justadollarhostin said, the story is completely different if you're setting out to build a data center. If you're wanting to open a new D.C., you will either need to be very wealthy, or borrow several million dollars to get the doors open, the facility stocked with equipment, everything set up, hire staff, and make your commits.
So that's my quick trip down memory lane... for whatever it might be worth! (And that might not be much! LOL)
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Originally posted by Josh Stein
The business partner and I used our own funds. One of my rules is when borrowing that I must have at least the same amount of funds in liquid form somewhere. Hence I really do not borrow. [/B]