How to Start Your Own Hosting Company

Doctor Tech

Doctor Tech

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Hey everyone,

I decided to post this thread on how to start your own hosting company since many people have been asking me. This will include some tips on what to look for when starting up your host.

To begin, I strongly recommend reselling off a provider than getting your own server. Starting your host from your own dedicated server or even Virtual Private Server (VPS) can be costly and troublesome if you have no server experience. By reselling from an existing provider, they will take care of all the server management.

Different resellers offer different features. Start by comparing the packages between different providers and see if they offer you any extra goodies that you can offer to your clients, or even you can benefit from yourself. For example, some providers offer Softaculous (1-click installers for different website scripts). Some providers can provide website builders. You may also look if they offer cPanel/WHM hosting to see which panel you're more comfortable working with.

Since you will be reselling, I strongly recommend looking at provider reviews as this gives you feedback on their services. You will need excellent uptime since your clients' sites could be down if their server is having constant issues. You will also need quick support since if there is a client who needs a specific request on the server, you may need to request it from your provider. Hence, that support loop may take some time and you will need fast answers from your provider.

After deciding on a provider, you need to pick a company name. Ensure that it is unique and catchy, and that the domain is available. Short Top-Level Domains (TLDs) are preferred. Another feature to look for is if the reseller white-labels your nameservers. That way, you can give nameservers to your clients that will be unique to your domain. You may also purchase a dedicated IP address, but you could hold that off until later. Clients will not know that you are running off the reseller if your nameservers are white-labeled by your provider.

You will then need to setup your site after ordering the reseller hosting package as well as your domain. When setting up your site, you will need a script to manage your clients, support, and billing. WHMCS is a common option that many hosts use nowadays.

You can read about other panels here: https://www.cloudmgr.com/blog/3-of-the- ... companies-

WHMCS costs about $16/month for a branded license, or you can purchase an owned license for a one-time fee. (Check http://www.whmcs.com). However, one thing to keep in mind when looking for a reseller provider is they sometimes offer WHMCS to their customers with their packages. This can save you quite a bit of money especially since you're just starting.

This is most of the information you need to get started. After that, you will need to setup your billing panel to connect with your server and such. Again, some providers can do this for you if you get stuck.

Do not hesitate to let me know if you have any questions.

Best of luck to all of you,
Mike
 
Why don't you post it to the blog? 🙂 Perhaps a few tweaks here and there. But great article.
 
It is a nice guide, teh problem i have with resellers as you suggested is, to many times it ends up someone that does it for a very short period of time, and either after not making alot of money right away, or unable to keep up on their own end to pay whoever they are reselling for. If they have gained clients, and just dump their plan or whatever, it ends up leaving people seriously screwed. I have seen this happen time and again over the years on various webmaster forums, WJ being one of them, not so bad these days really i guess as hosts need to actually be established for a while before allowed to sell there
 
iMage said:
It is a nice guide, teh problem i have with resellers as you suggested is, to many times it ends up someone that does it for a very short period of time, and either after not making alot of money right away, or unable to keep up on their own end to pay whoever they are reselling for. If they have gained clients, and just dump their plan or whatever, it ends up leaving people seriously screwed. I have seen this happen time and again over the years on various webmaster forums, WJ being one of them, not so bad these days really i guess as hosts need to actually be established for a while before allowed to sell there
Click to expand...

iMage, I agree with you that some start-up companies may not persist in the long run, but everyone has to start somewhere. Big established hosting providers were once small and new in the world of hosting. Just with any business, starting up your own host is an investment and there are risks associated if you don't put in the right amount of effort. Having a well-defined business plan is definitely part of the picture, and monitoring the effectiveness of your goals is as crucially important. I never said earning clients and their trust was easy, but if you put in the right amount of work you can get up there.

Also, keep in mind that starting with a reseller is much cheaper than starting to run it off a dedicated server. If these resellers are unable to afford a reseller plan, they will definitely not be able to afford a dedicated server as long as all the expenses that come along with it (licenses, scripts, management, etc).

Now if you're a webmaster and are looking for a reliable provider, you can look at other client's testimonials, the server's uptime, how long since they started, etc. There are many reliable indicators of whether or not you can host your site at a provider/reseller without worrying about troubles you may encounter.
 
Ya as an experienced webmaster i am aware of the steps one needs to take in order to find a good host for your needs. But for new people just starting up, some may just jump at anything that is cheap. I used to be into some underground activity on the internet at one time, and seen many many MANY of these kids starting up so called "hosting companies" and shutting things down after overselling.

I think teh industry as well needs to limit what hosts can say to gain clients as well, such as the old 'UNLIMITED EVERYTHING' plans it seems most hosts say they offer, there is no such thing as unlimited
 
The majority of hosts now use Unmetered instead of Unlimited. Unmetered would simply imply that the host will not confine your resources. But yes, you're right 🙂
 
In my personal opinion, starting a web hosting company is very hard, you need to know and control more things also have a good team to support you.

Have an post about how to start a web hosting company
[Link Removed]

I think you can learn more things from this.

Hope it helps!
 
Doctor Tech said:
Hey everyone,

I decided to post this thread on how to start your own hosting company since many people have been asking me. This will include some tips on what to look for when starting up your host.

To begin, I strongly recommend reselling off a provider than getting your own server. Starting your host from your own dedicated server or even Virtual Private Server (VPS) can be costly and troublesome if you have no server experience. By reselling from an existing provider, they will take care of all the server management.

Different resellers offer different features. Start by comparing the packages between different providers and see if they offer you any extra goodies that you can offer to your clients, or even you can benefit from yourself. For example, some providers offer Softaculous (1-click installers for different website scripts). Some providers can provide website builders. You may also look if they offer cPanel/WHM hosting to see which panel you're more comfortable working with.

Since you will be reselling, I strongly recommend looking at provider reviews as this gives you feedback on their services. You will need excellent uptime since your clients' sites could be down if their server is having constant issues. You will also need quick support since if there is a client who needs a specific request on the server, you may need to request it from your provider. Hence, that support loop may take some time and you will need fast answers from your provider.

After deciding on a provider, you need to pick a company name. Ensure that it is unique and catchy, and that the domain is available. Short Top-Level Domains (TLDs) are preferred. Another feature to look for is if the reseller white-labels your nameservers. That way, you can give nameservers to your clients that will be unique to your domain. You may also purchase a dedicated IP address, but you could hold that off until later. Clients will not know that you are running off the reseller if your nameservers are white-labeled by your provider.

You will then need to setup your site after ordering the reseller hosting package as well as your domain. When setting up your site, you will need a script to manage your clients, support, and billing. WHMCS is a common option that many hosts use nowadays.

You can read about other panels here: http://www.cloudmgr.com/blog/3-of-the-m ... companies-

WHMCS costs about $16/month for a branded license, or you can purchase an owned license for a one-time fee. (Check http://www.whmcs.com). However, one thing to keep in mind when looking for a reseller provider is they sometimes offer WHMCS to their customers with their packages. This can save you quite a bit of money especially since you're just starting.

This is most of the information you need to get started. After that, you will need to setup your billing panel to connect with your server and such. Again, some providers can do this for you if you get stuck.

Do not hesitate to let me know if you have any questions.

Best of luck to all of you,
Mike
Click to expand...
Very nice guide, thanks for sharing. However it is quite difficult to start your own hosting company and it requires a lot of thought because there is a lot of competitive in the market. Also, it takes a lot of time to build a solid reputation which is important. In order to succeed, you will also require a lot of investment in terms of money and time. A lot of people will also go with the larger hosts which already built a solid reputation. Have you got any advice on how you can overcome some of these problems?
 
MasterA said:
Very nice guide, thanks for sharing. However it is quite difficult to start your own hosting company and it requires a lot of thought because there is a lot of competitive in the market. Also, it takes a lot of time to build a solid reputation which is important. In order to succeed, you will also require a lot of investment in terms of money and time. A lot of people will also go with the larger hosts which already built a solid reputation. Have you got any advice on how you can overcome some of these problems?
Click to expand...

You are absolutely right! Building a reputation is 100% essential to maintain the viability of the business. A lot of people come into this market expecting to make money right away. As with any business, there is always an investment phase where you may spend more money than you make to expand your potential in the future. To compete with the larger hosts, you can provide free trials to customers, referral commission, extra services included in packages that are provided, competitive pricing, and outstandingly-quick customer support. These are key factors that attract customers to your webhost. Once you get your first few clients, their word of mouth to other customers will mean a lot to you. Trust me, webmasters do talk about which webhosts they would be proud to host their site(s) on as well as which ones to completely avoid. Slowly but surely, word of mouth will build you a solid reputation. However, this doesn't mean that you should not put in the effort of advertising and trying to spread awareness of your company. You are trying to appear within this gigantic industry and make your company look competitive among others!
 
Doctor Tech said:
To begin, I strongly recommend reselling off a provider than getting your own server. Starting your host from your own dedicated server or even Virtual Private Server (VPS) can be costly and troublesome if you have no server experience. By reselling from an existing provider, they will take care of all the server management.
Click to expand...

I can not stress this enough. I do not agree with this statement AT ALL!

If you do not have the experience on running servers, or knowing even the most simplest of questions in regards to hosting, you should NOT be starting up a company selling hosting to clients. This is why the hosting market has such a bad reputation to begin with.

"But how am I going to get experience and learn then?"
Simple. Learn. Get a small box, learn the linux commands, and master cPanel. Get a cPanel University Degree (It's free!) once you feel you have enough knowledge learned.

THEN start a hosting company. Not vice versa.

In my opinion, reseller accounts should be for one of the following:
1) Someone who has lots of sites, and wishing to have each site on a separate cPanel account (much cleaner)
2) A designer or developer who also offers simple hosting as an added or extra package.

Starting a hosting company on a reseller because you can't afford your own servers should also be a key point that you should not even start up a hosting company because chances are, you will end up closing it within its first year or two, and the hosting market reputation will be worst than it already is.

The hosting industry is not a get rich quick scheme. You have to spend a great deal of money, time, and resources on it. It is very competitive, and most people these days want hosting for pennies.

Take it from someone who has been running his hosting company for more than 4 years 🙂
 
Jordan said:
Doctor Tech said:
To begin, I strongly recommend reselling off a provider than getting your own server. Starting your host from your own dedicated server or even Virtual Private Server (VPS) can be costly and troublesome if you have no server experience. By reselling from an existing provider, they will take care of all the server management.
Click to expand...

I can not stress this enough. I do not agree with this statement AT ALL!

If you do not have the experience on running servers, or knowing even the most simplest of questions in regards to hosting, you should NOT be starting up a company selling hosting to clients. This is why the hosting market has such a bad reputation to begin with.

"But how am I going to get experience and learn then?"
Simple. Learn. Get a small box, learn the linux commands, and master cPanel. Get a cPanel University Degree (It's free!) once you feel you have enough knowledge learned.

THEN start a hosting company. Not vice versa.

In my opinion, reseller accounts should be for one of the following:
1) Someone who has lots of sites, and wishing to have each site on a separate cPanel account (much cleaner)
2) A designer or developer who also offers simple hosting as an added or extra package.

Starting a hosting company on a reseller because you can't afford your own servers should also be a key point that you should not even start up a hosting company because chances are, you will end up closing it within its first year or two, and the hosting market reputation will be worst than it already is.

The hosting industry is not a get rich quick scheme. You have to spend a great deal of money, time, and resources on it. It is very competitive, and most people these days want hosting for pennies.

Take it from someone who has been running his hosting company for more than 4 years 🙂
Click to expand...

Thanks for your input. We have been in the hosting industry since 2010 and I am simply giving advice for smaller start-ups 🙂 Before starting to answer you I'd like to say that there is always something new to learn, even for the most advanced professional hosts. If you are expecting to know everything before you even start, you are mistaken. I am sure you know that the hosting world is always rapidly changing and updated, and if you do not learn to adapt then maybe this isn't the best field for you to work in.

Although I respect your point-of-view regarding the two reasons why someone should get a reseller, it does not prevent a small start-up hosting company to use a reseller as a step to grow in the business. Not everyone has the extra money laying around to spend on a server until they eventually start making an income. I agree, as you have said that "the hosting industry is not a get rich quick scheme". However, good business strategy dictates that you should minimize cost and increase revenue in order to make good profit. You will definitely not make profit right away, but every company at least tries to minimize expenses until they have a leg to step on. You mentioned that "most people these days want hosting for pennies". How do you expect to offer hosting to customers at such a low price, spend much more on a server, and expected to last in the business? There would be no reason to run the business if you are not making a profit (not necessarily right away). Just because you are spending less does NOT mean you will shut down within the first year or two. Contrary to what you stated, these businesses may eventually become more successful if they are strategic with their budget management.

If you read my words carefully, I have mentioned that it can be troublesome managing a VPS if you have no server experience. As I am sure you know by running your own host, dealing with support and billing inquiries via an Automation Panel, as well as making necessary changes via cPanel and WHM is completely different than back-end management. Otherwise, some of the hosting providers out there in the business wouldn't be seeking Managed VPS providers to do back-end tasks for them! Think of a reseller as a Managed VPS provider. Whenever a reseller asks for a sever customization request, it is the same as a VPS owner to ask their managed provider to do the modification on the server for them. However, this comes back to my first point where you are paying managed VPS providers to do the work for you, versus having a mutual agreement between the reseller and their provider that the support offered is promising to the start-up business at no extra cost.

Take it from me, who has been in the same business for slightly longer, dealt with hundreds of hosted clients, dozens of which are resellers 🙂
 
Good thread! Very informative!
Part of my business model is a reselling service for hosting solutions. Its a good way to start earning a small income as an augmentation to the business model. Saying this with this type of solution you're better off using a cloud based server. There's lots of options out there find one to fit your budget.🙂
 
It is very good idea But i think it is very hard to starting your own hosting companies.
Before starting your business you should need suggestion of any expert or experience person and also know the few things which is very important for everyone those who are starting their own business http://charmigupta.angelfire.com/
 
Naina said:
But i think it is very hard to starting your own hosting companies.
Click to expand...
Wouldn't think it be hard, it will take time to build and cost allot to start one up.
 
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