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My Insane Plan to Six-Figure Profits!....help me please

Discussion in 'Making Money' started by alih97, Nov 25, 2015.

  1. alih97

    alih97 Junior Member

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    Hey, guys I am going to start a domain and hosting company website. I have determined my costs are going to be about $1,277.02 upfront and my monthly maintenance cost are going to be about $859.21. I will list my costs below. I will start off providing shared hosting and use Stripe API for payments, here are the shared hosting plans I will provide.

    HOSTING PLANS

    -Stripe Payment Processor-Free Signup (2.9%+$0.30/transaction)
    -Basic Plan: $11/month -
    $0.62(Stripe Fees) = $10.38/net per month

        • 10GB Disk Space
        • 150GB Bandwidth
        • 2 Domains
        • Unlimited MySQL Databases
        • Unlimited Emails
    -Standard: $17/month - $0.79(Stripe Fees) = $16.21/net per month

        • 20GB Disk space
        • 250GB Bandwith
        • 4 Domains
        • Unlimited MySQL Databases
        • Unlimited Emails
    -Pro: $24/month - $1.00(Stripe Fees) = $23.00/net per month

        • 50GB Disk Space
        • 500GB Bandwidth
        • 5 Domains
        • Unlimited MySQL Databases
        • Unlimited Emails


    ------------------------------------------------------------------------------------------------------------------------------------------------

    COSTS

    -Original Custom PSD Web Hosting Provider Theme-(free, design myself)
    -PSD to HTML/Wordpress Conversion(fiverr)-$5
    -Google Apps Business (5 different email addresses)-$25/month
    -Namecheap domain name-$10.87/year
    -HiVelocity Managed Dedicated server-$494/month - about 250-400 accounts

    ***For Customer Accounts & Data Only***


    • Processor: 2x 2.4GHz Hexa-Core E5-2620 v3 Haswell Xeon
    • Memory: 32GB DDR4
    • Primary Hard Drive: 2000GB
    • Secondary Hard Drive: 2000GB
    • Third Hard Drive: 2000GB
    • Fourth Hard Drive: 2000GB
    • RAID Setup: RAID 10
    • Bandwith: 100TB on 1Gbps port
    • Operating System: CentOS 6.x
    • Control Panel: cPanel+Softaculous+Fully Managed Services
    • Litespeed: 2 CPU LSWS Enterprise License
    • Cloud Storage: 10GB

    -Future Hosting SSD1 Managed VPS-$34.95/month
    ***For Billing, 3rd Party Software, etc.***

    -cPanel Theme Flat Panel-$49.94
    -eNom Domain Reseller(Silver)-$50fee+$50deposit(to start)
    -Blesta Billing Automation (Monthly Unbranded)-$14.95/month
    -Standard IdenTrust SSL Certificate-$99/year
    -Stripe Payment Processor-Free Signup (2.9%+$0.30/transaction)


    -Quickbooks Simple Start Accounting (connect to Stripe)-$10.36/month
    -AWS Glacier (for Backups)-In->$0.000 per GB/Out->Varies based on Data
    -CloudLinux (2-4 License)-$12/month
    -R1Soft Backups Standalone Licensing-$7.95/moth
    -Hire on Web Hosting Talk Forum -> Employment Section to put all this together into working website, ready for customers-$100



    Example Ad:
    REQUIREMENTS

        • Must have 3 years+ Experience in Web Hosting Industry, Developing, PHP, HTML, Server Management,
        • Must have legitimate proof of Experience (Resume, CV)
        • Must be quick, Must be professional, Must be reliable
    REQUEST

        • Integrate my Original Responsive HTML converted theme to ENTIRE website
        • Set up ALL Backend Systems for Website
        • Set up Blesta Billing Automation Software
        • Integrate My Stripe Account with Subscription Billing in Blesta (so I don't have to send invoices to customers, recurring payments).
        • Set up R1Soft Manager to Backup all data daily to AWS Glacier Account
        • Set up Daily Backups
        • Set up Cloud Linux
        • Set up eNom Domain Reseller API into my theme (able to search domains)
        • Set up Dedicated Server and VPS
        • Set up Dedicated Server to be used for ONLY Customer accounts and Data
        • Set up multiple cPanel accounts so everything is separate and more secure
        • Set up Managed VPS Server to be used for everything else (billing, 3rd party software, etc.)
        • Set up 5 Google Apps business Emails to my domain on VPS Server

        • Handle all upfront set-up and make website customer ready
        • Make sure website runs smoothly


    Total Upfront Costs=$1,277.02


    Monthly Costs=$859.21/month(will increase based on website growth)

    ------------------------------------------------------------------------------------------------------------------------------------------------

    INCOME GOALS

    My goals for this small business are to get my monthly income to about $5,000.00 net profit per month (before taxes of course), and then sell 6-12 months later for about $150,000 USD (This is a big goal but I believe I can do this!). I can use that money for a bigger business investment, (Possibly e-Commerce / Private Labeling). Or if it is growing really well I will keep the business and keep growing it. But, to hit $5,000.00 net income per month on top of my costs I will need about 362 accounts at my standard hosting accounts at a net profit of $16.21/month. Here is the math I did:

    Goal: $5,000.00 net income


    1). $859.21(Costs) + $5,000.00(goal monthly profit) = $5,859.21(Revenue)
    2). $5,859.21(Revenue) / $16.21(net per sale: standard plan) = 361.45 (accounts)
    *Round 361.45 up to 362
    3). 362(Accounts) x $16.21(net per sale: standard plan) = $5,868.02/month
    4). $5,868.02(Revenue) - $859.21(Costs) = $5,008.81 Profit (before taxes of course)

    ***I will set up LLC/Inc. and hire accountant & business lawyer once I have positive income flow (make more than my costs per month...duh?), until then I will keep track and document everything with Quickbooks Accounting***


    Going this goal of $5k per month net income, at 362 accounts. My monthly revenue will be $5,859.21. Most businesses sell for about 2x to 2.5 times yearly revenue. I will sell at least 6-12 months later so they see that I have created a sustained stable income. I don't believe this type of one-man business would be too hard to sell either.

    My valuation estimate would be

    2x - $5,859.21 * 12 * 2 = $140,621.04
    2.5x - $5,859.21 * 12 * 2.5 =
    $175,776.30

    So once I hit my goals at this number I should be able to sell it for anywhere in between 140k to 175k (minus broker costs, and other costs required of selling). Hits my goal of $150,000 nicely. Nice chunk of change!

    ------------------------------------------------------------------------------------------------------------------------------------------------


    QUESTIONS

    1). What do you think of the plan? And what would you recommend I should I change to make this better?

    2). I was thinking of using the "free website method" to get initial hosting customers. Basically where you offer businesses a free website and they sign up for your hosting and domain. I tried using this method with voice broadcasting, but it didn't work too well. Do you guys have a better way at going about this method? Should I scrape emails and blast out to business owners daily?...hmm really stuck on this one guys.

    3). A lot of you on BHW are really smart marketers, I am a newbie (I hope to be on your guys level some day). I am trying to build a real business and brand that I can later sell for BIG MONEY. Are there any tactics you have in mind to get me to my goal of 362 standard accounts.

    4). After I set everything up, I want to give my self 4 months to hit 362 accounts and my goal of $5,000 net income per month. Do you think this is possible/do-able and what do you think I should do to expedite this?



    ***If you have any other questions about my plans PM me, BHW won't allow me to post Links!***

     
    Last edited: Nov 25, 2015
  2. TayaX

    TayaX Jr. VIP Jr. VIP

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    Well, first of all, I think that's the most detailed plan I've ever seen here. I guess you have a things for numbers :) .
    I guess the main problem in your plan is that you have absolutely no idea of where to get your clients, which is a big problem when you invest that much money upfront. before launching anything, You really should do a market analysis and see where you can get your clients from. Free websites are one solution. a BST here will probably get your more clients if you give a discount. Media buying on other forums can also be a solution. But it's really your job to look for opportunities.
    Lastly, I might have missed it, but you're not taking about customer support at any point. This is REALLY important in order to keep a good relationship with your clients. You won't be able by yourself to handle 100 clients. just 2/3 emails per day will take a lot of time & research and if you cannot provide clear & helpful answer, clients will run away. You should really think about a plan there too.

    Good luck buddy :)
     
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  3. alih97

    alih97 Junior Member

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    I was thinking of using a site like bobcares.com for customer service, of course I am still researching. I appreciate your feedback!
     
  4. UptonGoodwin

    UptonGoodwin Power Member

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    I'm not too familiar with programming jobs or setting up a web host like this. But there's no way you are going to get an experienced person to build this for you for $100. They are also likely going to have to stay on your payroll after you are operational to keep everything working properly.

    It's a real detailed plan you have. I would say the biggest downside you have going here is your entire business is going to be pretty dependent on that one server hosting 360 clients and not having any major issues that end up resulting in downtime, which would pretty much sink you when you are just starting up.
     
  5. alih97

    alih97 Junior Member

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    Good point, i was think $100 bucks was too cheap and as for the server, it is managed by Hi Velocity admins so if technical problems occur the should be able to take care of it. I am really focusing on just looking for ways to get my initial customers, so i can cover my costs and be in profit.
     
  6. Oz0102

    Oz0102 Jr. VIP Jr. VIP

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    i must say ii am impressed with how you worked up your plan. it shows how serious you are with getting this started but here is my opinion.
    1. the hosting costs are a bit pricey considering there are tons of competitors offering better specs at more affordable prices.
    2. you should pay a lot of attention to promotion because its not just about setting up the business but getting clients. Take out time to do a a proper market analysis.
    3. Find a way to attract clients possibly through coupons, seo deals, etc etc

    All the best mate
     
  7. hdwla

    hdwla Junior Member

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    It's only cover hosting cost, what about marketing cost?

    You should also make your marketing plan

    Best of luck buddy!
     
  8. Asif WILSON Khan

    Asif WILSON Khan Executive VIP Jr. VIP

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    Well you have certainly put more thought into this thread than your previous one:
    http://www.blackhatworld.com/blackh...vil-unsubscribed-method-quick-cash-twist.html

    If the actual plan is the "Free Website Method" mentioned in the following threads ...
    http://www.blackhatworld.com/blackh...eed-advice-experienced-offline-marketers.html
    http://www.blackhatworld.com/blackhat-seo/making-money/801605-need-honest-advice.html
    ... then I would actually scale back initially, you can cut back on the total set up and monthly costs as you don't require those specs at this point in time, you need to scale your business.
    Start smaller, get customers then scale it up, rather than spending that sort of money each month without even one client.

    It is tempting to have everything in place but if you struggle to find clients then you could go broke pretty fast, better to scale your model as the business grows.

    Good Luck with it, but I would suggest getting a decent looking site up (on shared hosting if necessary) by the weekend and you can start calling potential clients from the beginning of next week.
     
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  9. alih97

    alih97 Junior Member

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    I hope you know that my previous post was a total joke and i hope no one would actually try that method. :)
     
  10. Asif WILSON Khan

    Asif WILSON Khan Executive VIP Jr. VIP

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    Well, be careful when making jokes like that as some people are clowns and are probably already trying it.

    Anyway, good luck on your journey, when you are ready, you should start a thread here:
    http://www.blackhatworld.com/blackhat-seo/f167-my-journey-discussions/
     
  11. safex

    safex Jr. VIP Jr. VIP

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    Honestly, I liked the Plan. Full Details and Good Paper Worked.
    -Suggestion.
    -Toll Free Number or Skype Number for Support your customers.
    -Full Time Chat Support for Customers too.
    These 2 are Major things in my view for a company (hosting) to get Good converting. Now Major Problem is Clients. What is your Budget for Promotions? and Marketing?
     
  12. hdwla

    hdwla Junior Member

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    I'm agree with W130SN
    Well said!
     
  13. Trith

    Trith Newbie

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    Actually getting the sales is probably the hardest and most overlooked aspect of business. I'd recommend researching on getting the sales before you launch any of this.
     
  14. Psmaniaboy

    Psmaniaboy Newbie

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    I also would like to acknowledge the amout of thought you put into this plan. You sound like a true businessman who's completely serious in their goals. Personally i think the best way to get clients is to either talk to them on the phone or in person. If they hear the voice of another person, they will feel more motivated to accept your service. Yes it will take longer but you will definitely get a higher amount of people accepting your service than if you just emailed them. I definitely think this is achievable in 4 months but you're gonna have to work your ass off. All depends on how bad you want it. Good luck with your business sir.
     
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  15. dar1xbl

    dar1xbl Newbie

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    Well, i was thinking about opening hosting company long time ago so i have a lot of knowledge in that field, first of all you have to realize that someone have to handle the following things :

    * Customer support ( sales questions, customers requests, customer complaints etc )
    * Technical Department ( fix any possible issues on your servers, web site, customers portal, fix customers issues, etc )
    * Fraud/Legal Department ( keep a track that all your clients are running legit web sites, no illegal stuff going on, solve chargebacks, handle ddos attacks, handle viruses on customers web sites, handle spam complains etc )
    * Reputation Department ( someone who will be active on all forums/sites where your company is being promoted or mentioned at all and respond to potential clients questions, current customers reviews/complaints etc )
    * Marketing Manager ( someone who will run marketing campaigns for your company, you cannot get 350 clients out of nowhere, especially since there are tens of thousands hosting companies out there, literally, you will have to promote your company on hosting/webmasters/IM/IT forums, do PPC/PPV, social networks, email marketing, paid ads, etc ).

    Believe me you can't do everything by yourself, especially if you think of having 350 clients working with your company, you'll have to hire at last 3-5 people to do everything for you, you could potentially hire one person to do multiple tasks, but you'll have to pay them more. Even workers in this field from 3rd world country wouldn't work for you for less than $400 USD / month, so that would be at last $1200-$2000 USD extra fees for salaries, if you want to hire domestic workers, then you'll probably have to pay more like $5000-$7000 a month for 3-5 workers.

    Hosting company is not that easy, actually it's far from easy nowadays, there are tons of hosting companies out there, it's hard to stand out from the crowd and it's also really hard to keep track on everything. If i were you i would lower down the expected income and add hiring workers as one of the tasks you have to keep in mind, because there is absolutely no way you can manage everything by yourself, maybe if you will have 5-10 clients, for more than that you need workers.

    Good luck.
     
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