well if you are happy with your hosting provider then just ask them how much would it cost to get 1 gb space and 15gb bandwidth extra. Then you bill your client appropriately. Despite what many people think having your own dedicated servers is a whole new ballgame, if you don't now how to administer a server, you are doomed from the onset.
BGP Blend of Telia, GTT, Zayo, and Cogent in One Wilshire, Los Angeles!
True Definition of Managed Hosting
Proudly Offering Shared Hosting, Reseller Hosting, VPS, Dedicated Servers, and Co-location
I guess it would depend on what your net income from hosting is now. And how much do you plan on spending on a server. If this new client would put you over or close to that mark I would say yes.
You also need to make sure you will be able to give the same support you have been offering. If the Host you are with now offers dedicate servers and you are happy there, I would stay with them for the dedicated.
If your current host does not offer dedicated servers then look carefully at any host you choose.
Make sure you are ready to admin you own server. Think of any problems your clients might have had that you had to go to your host to solve, because those kinds of problems would now be yours.