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  1. #1

    How much $$$ do i need to start a hosting biz?

    Newbie Question : I`ve got skills in networking and stuff, how much money do you need to start a hosting biz?

  2. #2
    at least $150/month

  3. #3
    Join Date
    Dec 2001
    Enough for a dedicated server or to get a reseller account. That's really all you need.
    - joey

  4. #4
    Join Date
    Jun 2001
    Chicago, IL
    As said, thats the least, then you have advertising, extra software, etc, a lot of varible costs, or none depending on what you do.

  5. #5
    Join Date
    Jun 2002
    Florida, USA
    Yea, if you end up starting you're own datacenter....the cost per month goes up.

  6. #6
    Join Date
    Dec 2001


    Yea, if you end up starting you're own datacenter....the cost per month goes up.
    If you open your own datacenter, you're probably doing rather well in the hosting industry and there's a need for it. Unless you plan on becoming a top 100 hosting company, you can run it probably with just a few dedicated or colocated computers.

    Just my two cents worth, again.
    - joey

  7. #7
    Join Date
    Feb 2001
    At least $10,000 bucks
    I have servers at: NetDepot/GNAX (A), SoftLayer (A), LiquidWeb (B+), DedicatedNow (B+), Nectartech (B) and more!

  8. #8
    Join Date
    Dec 2001
    Wow, I'm not sure where $10,000 came from. It's nice to have the overhead to begin with I'm sure, but if you can't keep it running for a good while with that much and become proffitable, maybe entrepreneurship isn't for you.
    - joey

  9. #9
    Join Date
    Dec 2001
    Franklin, TN, USA
    Skills in networking aren't all that you are going to need for starting a hosting biz I can tell you that. You can start a networking company maybe
    Linux. Problems Solved. | Built for the Hosting Industry
    Server Management. Helpdesk Management. Business Management.
    ( AcuNett, Est. 15 Years, RateLobby 5 Stars )

  10. #10
    The Web Hosting industry is tough competetion, their are many hosts to choose from as a customer stand point. Advertising money would come into play, as you would want potential customers to find you before another host offering a similar deal.

    I would recommend having at least $1500 put away primarily for your web hosting business. This would cover the setup cost on a dedicated server, and cover the first couple months, incase you are not profitable after several months. The rest would be geared towards advertising/technical support.
    Fast & Affordable, Linux Web Hosting. Vecro Web Hosting
    Email: [email protected], [email protected]

  11. #11
    Join Date
    Aug 2001
    United kingdom
    It really depends on what your business model is... there are people who get a server from Rackshack and immediately start putting clients on them as they come in. But then you have people on the other side of the market, and proplery structure their company, get themselves incorporated, use high quality servers, provides great support with a support team etc. So it depends on how long you plan to stay in the market and for what reason, is it for the money only? or a successful business which later leads to money?

    Alan Ho
    Former Systems Administrator

  12. #12
    Join Date
    Jun 2000
    Alabama of course

    I spent 1500 on registering my company, domain names ssl certs and merchant accounts

    But like they said, it all depends on your focus, most people can start out just fine with a reseller account or a small dedicated server, where-as others if they have the money might want to plan for large future growth and spend the money at the beginning rather than playing catchup soto speak with your companies growth rate.
    KnownHost Managed VPS Specialists
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    KnownHost is hiring! Click here for more information!

  13. #13
    Join Date
    Sep 2000
    100 for dig cert
    25-50/m for hosting
    500/m minimum advertising

    buy your software on ebay, really all you need is frontpage dreamweaver or similar

  14. #14
    Join Date
    Jul 2000
    Athens, Greece
    We started with $75.

    1. Hosting reseller account: $16
    2. Custom name servers: $10
    3. Revecom account: $49

    In the last year however, we have invested about $20K for servers, advertising, certs, monthly payments to the datacenter, various professional & technical fees, licences, etc. We took a try and see how it goes approach. When we saw that there was demand and a profit could be made, we did the required investment. Mind you, all the money invested came from sales, out-of-pocket investment was only the initial $75.

  15. #15
    Join Date
    Apr 2002
    Well, we're not even open yet and have spent quite a bit of money.
    • SSL Certificate
    • Payment Processing
    • Royalty-Free Photography (for use on site)
    • Employee to answer phones
    • Support staff (looked into outsourcing and bringing employees in)
    • Site development (I did this but it still took a lot of time)
    • Advertising... postcard mailout, PPC, slots on webhost directories
    And this list doesn't even cover any of the actual costs involved in hosting a website, such as the reseller acct./dedicated server.

  16. #16
    Join Date
    Mar 2001
    Wash. DC
    The more money you have to start, the better off you will be

    Old School WHT'er
    Hosting Since 1999

  17. #17
    I did a lot of research, and you can get started with only $500.
    This is about the money I'm going to start with and I can cover the basic costs.

  18. #18
    Join Date
    Apr 2002
    I don't doubt that you can get started with very little... but I would recommend putting more into advertising than anything.

    I've seen too many times where people start an online business and just expect people to beat the doors down. Or they expect to be listed #1 in the search engines in 2 days.

    It just doesn't happen that way. If you want customers you'll have to go get them. Whether you decide to advertise locally or on the Internet (or both) is up to you, but with no advertising that investment would be worthless.

  19. #19
    The god thing is that I already have about 20 customers when I start. That should be enough to cover the costs in the beginning.

  20. #20
    I agree with the person who mentioned advertising. This is some funds that will need to be spent. A couple grand should do it to start off. That will get us a few clients. Hopefully we won't piss them off too quickly and they'll bring a few of their friends around.

    Naw, we'll do fine. We'll show them the best of support! YEAH YEAH YEAH, the best of support!

    How about a business license and/or incorporation fees? This was mentioned by Dan. Incorporation registration 5 hundred to 1,500. Not bad. Good and cheap.

    How about liability insurance /false advertisement coverage? This was not mentioned either and is a requirement to run a business in some states. Hmmm. Darn insurance company want's to charge me WHAT?

    How about site design? Awe heck, we'll just do it ourself. How hard could it possibly be?

    Scripts you may want? Maybe quickbooks program? No biggie. A grand or two tops and for a few good programs.

    How about your merchant account? Not bad, a couple to a few bills and a minimum of fifty a month. A couple or 5 clients and it's paid for.

    How about a Thawte Cert? A hundred a year isn't bad for one server but why do I have to be a registered business to have one? Darn Thawte Company. Ok fine.

    How about your tax man? Pay him well. He is worth the money is he not?

    How about some business experience and education? Hmmm. Let's leave this one alone. Let's just run a darn business OK?
    YEAH YEAH YEAH... Run our own business.

    Now comes the network. Are you going to run this from your cable modem? I mean, hook your machine up to your cable modem? I wouldn't think so. It would be to hard to convince people you have raised floors when the picture shows the server setting on the carpet. Ahhh. So no home/small office network. Glad we came to our senses. Plus, T1's and T3's don't cut it in the OC12+ world right? Right! Good we can move on now. That darn T3 bill wouldn't have been worth it. We want a big fat fiber pipe don't we. YEAH YEAH YEAH. A big fat fiber pipe. I'm so happy we've decided that we aren't doing this right here. Now we can add another desk. The coffee pot really shouldn't be in here sitting on the floor anyhow. Hmmm. Actually it shouldn't be in the computer room? WOA.

    So now you get into servers. Options are a reseller, a host as in you have your own managed servers, or you co-locate your own.

    The payout might be a few hundred per month or more for a managed server, or 10-15 thousand for a couple or three well built servers you can co-locate. Are you going to build your own servers? Do you know how? That might save a bit but the 60-100 dollar per hour "virtual hands" tech bill from the noc may cost just as much. Either way, let's just co-locate and pay the noc some bucks for bulk bandwidth and run our own servers. I hope this works. Kind of scarey. Crash course in linux administration. Whew.

    YEAH YEAH YEAH... Linux Administrator.

    What about on your end? How stable is you cable modem service? Will you need to have a couple machines setup on a router and a redundant connection to the internet? Maybe a good business line coming in with some quality support? Not much just $180.00 for a 768/512 per month. Not bad. They even throw in one of those darn routers. That or, are you satisfied that your internet connection will never go down? I mean.... You really are going to answer your support desk tickets are you not? Hard to do when the cable techs give you a scheduled date of two weeks out to come out and swing a new drop to the pole. Darn cable technicians. They just don't understand do they? They just don't get it.

    Naw, we'll do this right and get a supported connection for the internet. They don't mind selling it to us at all. The wires look just fine hanging off the side of the office building. I thought those guys said they were better than the cable installation guys.
    Darn business line installers.

    How about administration? Are you going to do your own billing or hire a company to do your billing for you? If you do your own billing of course you can save some money, but it requires effort. It will require a notebook and a pen or you might op to get some software to help you out as mentioned above. This isn't free. Quikbooks will cost a nickel or so.

    The servers will require a bit of telnet line command. Start looking for all of the control panels.

    Cpanel is what? $1,400.00 per server for an owned license? What are they thinking? Heck.... We'll just lease it like everyone else does. $40.00-$100.00 per month per server.
    Darn Cpanel guys.

    How about security? Have you had anyone get on your server and test the security? Do you know how? If not, you most likely should get someone who's pretty good with security to take a look over your server before you shove it on the web. Wouldn't want a law suit our first week now would we? Might ruin the fun.

    Eh... Heck with the small talk. How much do you have for the network operations center? We can rent, no problem. We don't have to buy it. Nice tax relief anyhow right? Ok. So we rent our NOC and bring in a couple servers to start. I wonder what the first bandwidth bill will be? Ugh. How about the power bill? Ewww.
    I wonder If $12.00 an hour is enough for the two full time techs. Hmmm. I mean, I know I'll need more techs but starting out I think two will be sufficiant to handle the accounts built up since the reseller days.

    You did think about at least a couple of these things didn't you?

    If you want your own NOC I'm quite positive it's over five more dollars per month. I'm quite sure of it. I would be willing to bet at least a dollar this statement is correct. Ehhh. Forget that. I need the dollar for my tax man. Ok. All bets off. I can't afford to lose the bet.

    Seriously, I don't believe it would take long to spend ten thousand dollars playing around having fun as a reseller. Heck, your a registered business anyhow, right?. If the venture doesn't work you can always take a loss on it. Well can't you?

    WHAT? You forgot to register us as a business? Darn partner.

    I've got a partner? When did this happen? Oh, yeah. I ran out of money and had to get investors and a business partner.

    Naw, not really. We don't need investors. We are rich and we made it all off of our 800 7dollar hosting accounts!

    Someone forgot the calculator. Darn me. It was I that forgot the calculator. Now we have walls and no roof and our servers are all wet. Not litterally!!! But financially!!!

    We'll just blame the tax man. YEAH YEAH YEAH. We'll blame the tax man.

    Naw... Heck with it. Scratch that plan. We won't do it that way at all.

    Here's how we'll do it:


    Fun huh? I'm just learning though. That's why I'm here reading the thread. Learning is real fun.
    Last edited by NewMerchant; 06-24-2002 at 12:33 AM.

  21. #21
    You can star with:
    a reseller account. $20-$35 /mo
    CC transaction provider. $50 setup
    Promotion and advertisement $150

    Good luck

  22. #22
    Join Date
    Apr 2002
    1500 for incorperation? Do you live in trump towers?

    Last time i checked its $99 where I live. (Canada)

    They are making money off the corperate taxes not the registration.

  23. #23
    spend how much money is depends you want to establish a better web hosting business or a smaller one

    We recommend you should start with at least $5000, we spent around $7000 to get started, most of the budget spent in design, advertising, merchant account, custom scripts and finding a tech support, and you need to maintain the monthly server cost, tech support salary, etc... make sure you have enough money to getting started

    Last edited by dk2002; 06-26-2002 at 11:01 PM.

  24. #24
    Join Date
    Jan 2002
    In reality the post above is correct.. go get a reseller account for 25-35 bucks a month.. Spend 50 bucks at 2checkout or revecom and find some cheap ppc spots if you can.. Then get out there and use word of mouth, many people here will tell you this is the best form of advertising, when you get customers take VERY good care of them and the rest will fall into place. After a while when you get a couple reseller plans going good an about 50 or more customers switch to a dedicated server and that way you will already be paying off the servers note with the customers you already have plus have some $$$ for other things such as advertising. This is what I did.. Cost be under 50 bucks to start and here I am a little over 2 years later not making millions or thousands a week but doing pretty good with a couple of servers and could not be more happier.. Best of luck to you...

    P.S. You should also file a DBA at your local town hall and setup a business account at your local bank under your DBA, The DBA is usually 10-15 bucks and the bank account was free but could run from 5-15 bucks a month..

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