A Complete Guide to Starting Your Own Web Hosting Business
The web hosting industry is growing everyday with thousands of people looking for a new web hosting company. Starting your own web hosting business can be extremely lucrative whether you make it your full time passion or if you just want to offer web hosting as a side business. I’ve written this guide to help anyone who wants to start their own web hosting business and start getting recurring revenue.
Getting started in the hosting business and determining your goal
The first step would be to register a domain name for your business. Once you own a domain name you’ll need either a Reseller Hosting plan, VPS or dedicated server. I would recommend a Reseller Hosting plan if you’re just starting out as this is the least costly option. You can always upgrade to a VPS or your own dedicated server as your hosting business grows and expands. When looking for a Reseller hosting plan make sure you choose a web host that offers WHM and cPanel. WHM stands for Web Hosting Manager and this is going to be your back-end interface where you create cPanel accounts for your clients. cPanel is the most widely used control panel and I would highly recommend it for ease of use for your clients and it’s proven stability.
With a Reseller hosting plan you can create different plans and packages for your clients. You can set your own prices for each package you create and this is a great way to charge what you want with just one monthly cost for your actual reseller plan.
If you’re in Canada then we recommend HostUpon, they have a great Reseller Plan with servers in Canada.
If you’re looking to start your web hosting company in the U.S. then check out the Reseller Hosting plans at BlueHost.
Choosing a billing system for web hosting automation
Automation plays a big role in starting a web hosting business. You need a way to bill your clients automatically, create accounts on the server automatically, send your clients invoices and provide them with a user interface to manage their billing details. When it comes to billing systems for web hosting companies nothing beats WHMCS. WHMCS is an amazing billing system and it’s a cost effective way to automate tasks.
WHMCS includes order forms and a complete support ticket system where you can create different departments as well. It’s one of the best billing system platforms for anyone looking to start their own web hosting business. You can also integrate it with PayPal so people can come to your website, signup on the order form and pay with PayPal or credit card. You would then be notified of the sale and can approve it. Once you approve the order the system will create the users cPanel account on your reseller plan and email then their hosting account login details.
Understanding the market and choosing a niche
Starting your own web hosting company can be extremely lucrative. That being said, there are so many larger hosting companies such as BlueHost and JustHost. These companies offer cheap hosting and generally differ only in price. So to be successful in starting your web hosting business don’t focus primarily on price as you won’t be able to compete with these bigger companies. Instead, focus on a niche market that works for you.
Let’s say you are a web designer in New York and want to sell hosting. Focus on your local market first. If you use Google Adwords to market your business then tailor your Ads for people who live in New York. You can also dive deeper and offer something like ‘WordPress Hosting’ for people looking to host in New York. As your business grows you can expand your market but if you target locally first you’ll get small businesses and they can spread the word for you. Word of mouth is basically free advertising so as long as you provide good support you’ll have a leg up on the competition.
When you choose a niche market you’ll save money on advertising, startup costs and you’ll be able to grow your business without having to compete with the big companies. Focus on providing great support as that will help spread the word about your brand.
How to advertise your Web Hosting Company and spread the word
When you’re first starting out you need to be mindful of costs. Advertising doesn’t always need to cost money and we’ll go over a few free way to advertise your hosting business.
- Post in web hosting forums and make sure your signature has your brand name and website address
- Offer existing clients a free month if they refer a friend
- Create a Facebook page and ask your friends to join or like your page
- Create a Twitter account for your business so you can tweet about promotions and discounts
- Make a blog on your company website and post articles related to your web hosting niche
- Send out an email to friends and family about your new business to see if they know anyone looking for web hosting
These are just a few easy and quick ways to spread the word. When it comes to paid advertising here are a few options:
- Use Google Adwords and focus on niche keywords (pay per click advertising)
- Use a retargeting ads service such as Perfect Audience (you can read our Perfect Audience review here)
- Find bloggers related to web design or your specific niche and see if they can write a review about your web hosting company
- Create an affiliate program so people who recommend hosting can join your program and get paid when they refer a client
When it comes to advertising it’s always going to be trial and error. You’ll have to see what works best for your brand and when you find an advertising method that generates sales you can invest more in that.
Growing your web hosting business and adding value to the customer experience
Okay, so you’ve got a bunch of clients and things are going well but how to do you grow your business and scale it? As your business grows so will the needs of your customers. When their websites get more traffic they may need a bigger hosting plan. You’ll want to start selling them VPS and dedicated servers which in turn will generate a much higher profit margin for you.
Another great way to grow is to offer value added services to your clients such as the ability to register domain names, sell SSL certificates and even charge them for domain privacy protection. These are just a few way you can add value without having to spend a ton of money. Remember that you’re not just selling web hosting but helping to grow your clients businesses because when they grow so do you.
Support for your clients is a priority
Support is where you can really stand our from your competition. People are ready to pay more for a service when they know they can get reliable support. When it comes to support you want to do three key things:
- Offer email ticket based support. WHMCS has an integrated ticket system you can setup where customers can open a ticket from their client area. You can create different departments such as sales, billing, support and abuse. Email support is absolutely a must for a web hosting business. It allows you to communicate directly with your clients and is the preferred method of communication for the majority of people since it’s so widely used.
- Having a toll free number is something you can also consider. It not only gives your site visitors visual confidence on your website but another avenue to contact you. Having a phone number displayed on your website will make you look professional and appear like a big company even if you’re not. Companies like Grasshopper let you setup your own toll free number for as low as $24/month. You can even have a vanity number so it’s easier for people to remember it and also adds to your business branding. They even have an iOS and Android app so you can make and take calls from anywhere.
- Add Live Chat to your website! Live Chat is the perfect way to engage with your site visitors in real-time. You can chat directly with your visitors while they are browsing your hosting plans and convert them on the spot. This is probably the best way to turn a visitor in to a sale. Live Chat Inc is the company that most people use to add live chat to their website. You can even create automated engagement to offer a discount or suggest a plan. The possibilities are endless with live chat and if you’re serious about starting your own hosting company then you should seriously consider adding it.
So there you go, you now have 3 great way to engage your visitors and provide amazing support!
Starting any business requires planning but if you want to launch your own successful web hosting business you’ll need a great hosting company, provide quality support and choose a niche that you’re familiar with and passionate about. You need to love what you do and web hosting is a great way to start your own online business and generate revenue. Everyone needs a web host for their website so remember that even though the market might seem saturated there is still tons of room for you to grow!
