[Method] How to start your own Web Hosting Business

[Jeffersontalks]

This is a guide to help you in starting your own web hosting business. Of course the easiest method is simply order a reseller hosting packages but to really earn money, you would have to lower your cost further by owning your own infrastructure. This guide is meant for startup so the priority is to lower the cost.

Things that we need:
1) Dedi Server. I would suggest http://www.serverbidding.com/?country=US due to the pricing of an auction server. Hetzner offers auction server despite older hardware. Not a big issue for start up as you can always upgrade to better server once you start to make money. A 2 x 2TB SATA hard disk and 32 GB ram only cost 32 Euro a month.

2) Cpanel % WHM- http://cpanel.com/pricing/ -> $45 per month

3) Monthly dedi server license for softaculous $2.50-> https://www.softaculous.com/softaculous/pricing

Total monthly cost $36+ $45 + $2.50= $83.50

You can include other advance features such as CDN service, cloudlinux, WHMCS etc at an additional cost. As a start up, I would give these a miss.
https://www.maxcdn.com/pricing/ -> CDN pricing
https://www.cloudlinux.com/all-products/product-overview/cloudlinuxos/28-trial - Cloudlinux -> I personally like this as it offers isolation to each customer hosting so that performance will not be affected due to some customer who are abusing resources.

Steps:
1) Setup your server with linux - it is not difficult, just google for the steps.
2) Install cpanel/whm
3) Go to WHM panel and install softaculous
4) Setup your hosting package and if you have WHMCS then setup accordingly.
For the above steps, I would suggest hiring a freelancer to setup for you.

For the above setup you may think that the cost is so much higher so you might as well get a reseller hosting. Most reseller hosting cost $20 or more for 20GB harddrisk. In the above setup,you get around 4,000 GB for the price of $36 which is 200 times cheaper thus allowing you to sell more packages at cheaper price to customers.

The benefit of your own setup primary lies in the low cost which gives you the flexibilty to do things like charging $1 for 5GB hard disk and unlimited bandwidth per month. For 4,000 GB hard drisk, you would be making around $800 in sales monthly.

$800- $83.50 monthly fixed cost= $716.50 gross profits for a single server. (Now you know how much profits hosting companies are making huh?)

However this gross profits is not a FINAL profit as you still need to deduct marketing cost which would take up a lot of the profits depending upon how aggresssive you are with marketing.

Hope you find the above guide useful. Feel free to add in on areas that I have missed out. Cheers.

 

[BrandingBaw]

Thanks for the method!

Fun to have some insights in the profits for 'amateur' hosters .

 

[teetimeb]

Thanks for the share man, pretty interesting. You actually touched on my one concern, which is acquiring customers... what marketing methods would you suggest for just starting up?

 

[thetrustedzone]

For the above setup you may think that the cost is so much higher so you might as well get a reseller hosting. Most reseller hosting cost $20 or more for 20GB harddrisk. In the above setup,you get around 4,000 GB for the price of $36 which is 200 times cheaper thus allowing you to sell more packages at cheaper price to customers.

You missed the most important part in this business , the issue isn't in the setup , the issue in running ! , reseller you don't need to sort the customers technical stuff like hacking , unloading ,...etc . you just forward that to the main hosting company , in this method you need handle the customers 100% which is pure headache ..., sure you could hire technical staff but you need decent capital to start ......

anyways good info you shared .....

 

[DutchStuff]

Uhhh.. I wouldn't suggest this when you are a noob. If you have no tech skills or knowledge about everything in the background of your site (hosting), I won't advice to do this.

Yes it's lucrative when done right. I run a online multi service company and I made a deal with a hosting company, a rip-off affiliate deal. They (my clients) register with my personal code, get 5% off and I get 15% of the yearly subscription price. If there is any trouble I can reach out to the hosting company to fix it for free instead of getting "pure headache" as @trustedfire9 said.

But IF you know this stuff and have investments capital, you can win big. Anyway this is a good insight in earnings of those companies as stated before by @BrandingBaw

 

[tasburrfoot]

IMO this is such a headache, dealing with customers etc. I'd rather just use my affiliate to get people hosted, easy revshare for me, and I don't have any overhead/hassles.

This is more of a full time business venture.

 

[davids355]

Good guide. Agree with @trustedfire9 though running a web server is the tough part.
No good if you need a freelancer to set up because if something goes wrong you will struggle to fix - that's bad enough if you are running your own sites on there but if you have clients then you have a big responsibility.
Also to need to think about redundancy (if server goes down), offsite backup etc.

 

[turrilite]

Usually you see those how-to's right before summer break

 

[Jeffersontalks]

You missed the most important part in this business , the issue isn't in the setup , the issue in running ! , reseller you don't need to sort the customers technical stuff like hacking , unloading ,...etc . you just forward that to the main hosting company , in this method you need handle the customers 100% which is pure headache ..., sure you could hire technical staff but you need decent capital to start ......

anyways good info you shared .....

Yes the running and fixing of the server issue can be a pain (like all full time business does). Thus you must be really committed to the hosting business before going this route. For reseller you have less of a headache but you still need to service the client with simple issue such as why is my email not hitting the inbox of my client. Anyhow there is no business that you do not need to sweat to make money. But ultimately you have to be passionate to stay in this hosting business.

 

[Jeffersontalks]

Good guide. Agree with @trustedfire9 though running a web server is the tough part.
No good if you need a freelancer to set up because if something goes wrong you will struggle to fix - that's bad enough if you are running your own sites on there but if you have clients then you have a big responsibility.
Also to need to think about redundancy (if server goes down), offsite backup etc.

Yes there are much more work to it if you own your own infrastructure. A reseller package certainly makes this part a lot easier at the expense of the profit margin.

 

[akram92]

have you tried by yourself? cuz hosting 50 websites will use more than resources on that CPU you suggested, if someone is interested in long term journey in this business I recommend collocating a rack and buy the hardware for once and all you'll have to pay only for the rack collocation and the IP's.

 

[The Flame]

OP your method is definitely flawed. Even with 4000 GB hard disk space your CPU will limit how many sites can be hosted on each machine.

Also, HDD is significantly slower than SSD

 

[Jeffersontalks]

have you tried by yourself? cuz hosting 50 websites will use more than resources on that CPU you suggested, if someone is interested in long term journey in this business I recommend collocating a rack and buy the hardware for once and all you'll have to pay only for the rack collocation and the IP's.

I don't run a web hosting business, I own a live adult cam site with my own models. Profits are alot better compared to hosting .
But thank you for the input. As my first post say, it is great to have fellow members who point out areas that I have missed.
In terms of system resource usage, this is why I also mentioned to use cloudlinux to improve the stability of resource usage.
As the suppose setup is meant for startup, thus the clients would most likely be those who are after cheap hosting who have little knowledge about hosting technicality.
One of the marketing method used by a well known hosting Company that have a BST here is to bait with cheap hosting and when system overload, advise client to upgrade to a VPS or Dedi. I am not going to debate if this is morally correct but definitely a smart move to upsell.

OP your method is definitely flawed. Even with 4000 GB hard disk space your CPU will limit how many sites can be hosted on each machine.

Also, HDD is significantly slower than SSD

This is why it will be good to have cloudlinux to maintain and control system resource consumption. HDD is slower yes than SSD, so you can always go for CDN to improve the performance. There is always a trade off especially when the budget is low (i am assuming that this is a startup).

For those who are reading this post and intend to start your web hosting business, please do not think that this is easy business (else I would already be doing it myself). You need to have a passion in this industry. Even if you use reseller hosting. For reseller, your pricing advantage is as good as gone thus you need to be smart to acquire customers at the cheapest cost possible and provide good customer service. Remember at the end of the day, there is no money earn without hard work.