I purpously put in the overage charges just to make it more fluid.
Now taking tax (mine is 40%) away, the grand total would be:
Best: U$160 - 40% = U$ 96 Nett Profit
Worst: U$60 - 40% = U$ 36 Nett Profit
Now asuming I could get the prices drom the DS supplier:
1) I am the sole owner/operator/tech guy
2) Due to #1 above there is no way I can provide 24/7 support.
3) I have no control of the server so I can not guarantee 99.9% uptime.
4) I will get people asking me for help, threatning my dog, threatning my mother, posting on WHT (Worst case)
I have three questions:
1) Are my ROUGHT calculations/estimations feasible or am I missing some big chunk of the equation here?
2) If correct, for U$36->U$96 p/m ... do I really want to have the hassle of a hosting business. Or is this about the correct starting amount and in time I can increase the number of servers I rent and therefore increase the profit margin.
3) Do all my calculations go out the window when I start overselling HD/BW madly and putting way too many people per server? I know a LOT of people do that. But beside being rather dishonest can this come back and bite me in the butt in a big way, or if managed properly, can increase my profit margin?
Any suggestions/comments would be appreciated...
PS: This is NOT an advert for a host so please do not treat it as such.
PS2: I am NOT looking for a host currently so please do not post/pm me with quotes.
why are you only calculating 17G instead of using the whole HDD? Most likely they won't use their whole account, but even if they do, you haven't oversold it by then. As long as you keep up on their usage, you could even oversell that for a little while and then just put new people on a new server as your usage comes up. As long as your cpu usage stays ok, you don't start getting script errors, and you're fully burstable, you should be ok putting several people on the server. It all depends on what they run, though. you could put several hundred and it could be fine, or you could have problems after the third client.
If you're just starting out, you probably won't break even for a while. That's why a lot of people start out with a reseller account until their income is about as much as a ded. anyway.
Originally posted by skelley1 why are you only calculating 17G instead of using the whole HDD?
I find his foreward planning calculations refreshing. We do similar when looking at any new situation. But you can never plan on calculating the whole HDD space...there's rotating log files, mail and mysql space, not to mention the system and associated space necessary to be put aside on a 40GB drive. I'd say 17-20GB of plan specific allocated space would be a good target on a 40GB drive.
Then maybe there is an answer <smile>; I didn't know "braking" was a word ;-)
Have you written a business plan?
Have you written a market plan?
Do you have realistic, measurable, plans on customer acquisition and growth?
What is your unique selling proposition? What makes you different from the 2,423,768 hosts out there (note, figure is illusionary, but hopefully you do understand there are teens of thousands of hosts)?
Is your only differentation, how cheap you are? Or the value you add? What values do you add? Why you over them?
Who are your target customers? Will those target customers choose you given the lack of 24x7x365 support and no up time guarantee?
Will you be able to afford any insurance in case you do get a law suit against your company?