Today I'm going to teach you a quick lesson about what the hosting industry ISN'T
First off let's get started with what you're currently charging clients:
Feel free to read the other 'related thread' available at (you'll get the amount you're charging clients from this): http://www.webhostingtalk.com/showthread.php?t=480472
All right. Now that you've performed that you know you're making absolutely nothing and this ISN'T
the getrich quick scheme you originally intended.
So you're averaging around 1 cent per hour, per client (just an assumption -- anyone from 2 dollars up to 7 is about 1 cent per hour per client or less). Not too great?
Just think of how many clients you're going to need to make a decent wage at that.
Let's pretend for a moment that you consider 10 dollars an hour a decent wage (which I don't, but it's what I happen to make).
You now need a total of: 1,000 clients to generate your 10 dollars per hour (USD, I'd hope) excluding all of your expenses (and you know all about those if you run a provider: bandwidth, electricity, cage space or rackspace, licensing out the wazoo, phones, office (Even mommy charges you rent for that basement you're in kiddo) and the list just goes on.. and on.. and on.)
Suddenly you have two choices. You either solo
your entire operation and setup a sick monitoring system, wake up at random hours to answer random calls/tickets or.. you hire
I'm afraid that batch of cookies your Mom baked upstairs isn't going to cover support costs.
You're suddenly now neckdeep in doo-doo. You have to increase your clientbase to make this affordable and make a decent living. Suddenly you need 4,000 clients.. to make 40 an hour (not including expenses, don't forget that part
) because you want 20 for yourself and 10 an hour per tech!
You greedy, greedy man.
Now let's go a bit further.. you now have 4,000 clients to support with a 1-2 man team (that is if you can hire someone at 10 bucks an hour, don't outsource it'll only cause problems like higher profits
Now let's halt for a moment and do some math.
Let's just use an example..
Let's say there was a guy.. his name was You.
He had two choices: He could charge 5 dollars a month for hosting or charge 10.
He did some calculations, made his company named Fauxhost and got started: He decided he'd charge 5 because he'd end up getting 50% more sales!
Call the press! 50% more sales all because of a ... (wait a minute..) because of a 50% decrease in price.
Now we're getting somewhere. Let's say You decided to go with that 10 dollars a month pricing scheme. Suddenly he'd be getting 50% less sales (1 a day instead of 2, 5 a day instead of 10, whatever it may be..) but he'd also have 50% less clients to support.. yet magically
he would make the same
amount of money!
Wow! Look at that..
Okay, so it's not magic. My point is (if you can call it a point) raise you're bottom-of-the-barrel prices before considering launching your host. :p
Note: What are you doing in an industry where you make 1 cent per hour from each client? You're a masochist, just like me!
Requirements for this industry:
1. You have to love providing support - in fact you have to THRIVE on it. If you're going to become a leader in the industry you're going to need to learn to professionally interact with your clientbase. That doesn't just mean 'fixed' messages every ticket you receive. Provide your clients with some quality or they'll go elsewhere, make them feel special: even for that 1 cent an hour.
2. Don't think this is the industry that you're going to get rich quick in overnight. If you want to get rich quick take that reseller account or server you have and start sending 419 scam e-mails. Don't waste your time attempting to fight on these margins if you don't have the guts to stick with it. We don't want to hear about 'You host dissappeared h0mey!'.
3. You're going to have to take some time and really build a business plan. You have to plan for those rainy days when no sales arrive. Do NOT build a hosting company on the idea that you will 'always get enough yearly sales to cover your expenses' -- rainy days SHALL
arrive and you'll go down like a titanic and your existing clientbase might just not have it in them to renew.
Now with all that said.. even at 1 cent per hour (or 10 cents, or 60 cents..) the hosting industry is one where if you thrive on customer service, feedback, management.. you can make it out there. It's quite profittable and is a 'service industry' - which means as long as there are people needing websites there will be hosts! It's not what I would consider a 'luxury' (ipod sales drop when a depression hits, hosting sales not so much, toilet paper even less: got it? good Note
: Which reminds me I need toilet paper, may I use your last month's budget?).
Feel free to add your own tips and tricks. Mines sort of just a quickly thrown together 'rant'.
I'm bored, can you tell? Nor can I proofread/write!
Enjoy your evening!