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10 Steps to Starting Your Own Web Hosting Business

10 Steps to Starting Your Own Web Hosting Business

In today's blog post, we will explore how to resell web hosting, and do it successfully.

While this blog post won't guarantee you becoming the best web hosting service ever; it will set you up on the right foot without missing any crucial steps which have caught out many young web hosting companies in the past.

Who wants Reseller Hosting?

Reseller hosting is perfect for people who want to sell web hosting services to their customers, without having to invest in servers, hardware security, and the networks required.

Developers or Businesses

Reseller web hosting is ideal for web developers who want to package an 'all-in-one' experience for their clients, by giving them web hosting with their new website development. Reseller web hosting is also very attractive for new web hosting businesses planning on being a successful player in their region, or even globally.

If all this seems like a lot of hard work too soon, but you're still interested in getting up to speed with web hosting services, why not try out a web host affiliate program where you can still earn a satisfactory income, without risk or responsibilities.

What are the benefits of Reseller Hosting?

The biggest benefit to reseller web hosting services is that you get all the required hardware, security, and expensive resources for a fraction of the price - a cost which you can easily offset from your very first few customers.

Making the right business choices

This makes reseller web hosting very attractive to any new web hosts just starting out.

Getting it right, from the start

Everyone knows the World Wide Web revolves majorly around web pages. In order to have your web pages on the internet, you need a web host. For this reason, there's already hundreds if not thousands of web hosting providers on the web today; so how do you get your customers to choose you?

Every decision you make in the lead up to launching your own web hosting business will answer to this.

Step 1: Choosing Your Infrastructure & Provider

There are different approaches for starting to resell web hosting services. Only you can choose the right one for you, which depends on factors such as your initial expense outlay, the amount of customers you expect to be hosting from the start, and how much you charge your clients (i.e. how much profit you plan on making).

Think. Analyze. Succeed.

More commonly than not, it's always best to minimize your expenditure as much as possible - so that your business doesn't fail before it's even begun.

Reseller Hosting

Reseller hosting is the most popular way in for new web hosting businesses. The reasons for this is it's the least expensive method of starting a web hosting business. You'll be able to start relatively quickly, and you are provided with a Web Hosting Manager (WHM) control panel; for managing your customers hosting accounts, and your companies hosting packages and resources.

When choosing a reseller hosting provider, make sure you pick one with as little limitations as possible; this way, you can run your business how you want to. Common things to look out for are:

  • Unlimited Hosting Accounts
  • Essential Billing and Client Management Software supported
  • Competitively Priced
  • Important: Reliable and supportive customer support

What's great about reseller hosting is the fact you can easily sign up with little outlay, explore the control panels and familiarize yourself with the support of your provider before you start. If you choose a good hosting provider, you'll also get great support leading up to the launch of your new web hosting business.

Familiarising yourself with managing your business is very important; as ultimately you will be the front face of your business, and you'll be the one your own clients are going to for support with their hosting accounts.

VPS Hosting

A virtual private server is the step between a reseller hosting account, and a dedicated server.
They're absolutely perfect for when you've familiarized yourself with the hosting industry, you've secured a relatively consistent amount of customers and you're ready to improve your knowledge and expand your business further.

Virtual private servers are in theory, a virtual container isolated from the rest of the dedicated server. Meaning the VPS runs its own operating system, control panels and users. Unlike shared hosting, VPS accounts have a specific amount of reserved resource for running their websites and clients, and get full control and access as if it was a dedicated server.

When choosing a VPS provider, be sure to pick one that is committed to giving you full control of your VPS, along with the best processing power available.

  • cPanel Minimum Requirements
    cPanel recommends at least 1GB of RAM for your server, we provide a minimum of 2GB of RAM on our VPS to ensure your server can run the demands of a web host. Also ensure your VPS has access to at least a 4 (quad) core processor.
  • Full Root Access
    This is very important, as this distinguishes between a normal reseller hosting account, and a wide-open full-access server environment.
  • Easy Upgrades
    It's often overlooked when you're buying your first VPS. It's one big jump from reseller hosting to a VPS; but you still need to think for the future. Will you need your VPS resources expanding seamlessly without downtime, when you're ready to expand? Of course you will. Make sure you choose a provider that can do that for you.
  • Uptime Guarantee
    The uptime of your VPS relies on the uptime of your providers' servers, and network. It's important they are committed to keeping everything running smoothly above your VPS at all times, to save you the headache of being kept in the dark.

Dedicated Server Hosting

The final option we're looking at today; dedicated server hosting. The peak of your success - you have mastered providing website hosting via your reseller account, and later your VPS. The time has come, to start purchasing dedicated servers.

Whether you're a free web host, or you provide image hosting, file hosting or website hosting; if you keep expanding you will one day need to start buying dedicated servers to build your services further.

If you're new to buying dedicated servers, they can seem quite daunting, we understand that. It's why we think it's so important to have your web hosting provider 100% behind you, supporting you in your decision making process to upgrade, which server to buy, and also what software and security to place on that server to protect it from the elements of the World Wide Web.

  • Billing Periods
    Naturally, dedicated servers are more expensive than other kinds of hosting accounts. That's not a bad thing though, as you get so much more control with the raw power of a dedicated server. An important thing to consider is how often you wish to pay for your dedicated server (annually or monthly), and then calculate the density of the accounts on each server. That helps make sure you're always making a profit, and you can focus on the smooth running of your servers instead of the financial side of things.
  • Security
    Now you have a dedicated server, in almost all cases that takes full control from the web hosting provider, and places it in your hands. The most important thing once again is, having your provider there to support you with anything you need. The next crucial thing to think about is security. Now your server is your full responsibility to keep healthy and protected, it's normally good to get your provider to install the control panel and configure it so that it is secure to industry standards. This way, you'll rest assured that the most common precautions have been taken. It's worth mentioning that there's no such thing as 100% protection when it comes to anything internet related though.
  • Contingency
    If something catastrophic happened to your server or servers, where would that leave you and your business? Backups are very important. They allow hosting accounts to be restored as close to a few hours before any major failure or compromise. This can not only be good for massive failures, but are a great cushion for all your individual customers who may mess up their site and feel safe in the knowledge they can come to you and ask for a backup of their site at any time. For more information and a great product for server backups, check out Server Backup Manager from R1Soft.

Step 2: Choosing a Control Panel

There are many web hosting control panels available today. Two very common ones are cPanel and Webmin.

cPanel

cPanel

cPanel / WHM is by far the world's leading Web Hosting Control Panel. It comes in two sections. cPanel (the client-side control panel, for managing email accounts, databases, FTP Accounts, domains, subdomains, statistics, virus scans etc.) and WHM - 'Web Hosting Manager' (the admin-side panel, for managing web hosting accounts, defining hosting packages, managing overall server and company settings etc.

cPanel is the most recommended web hosting control panel, and is globally recognized as the market leader, for very good reasons.

Webmin

Webmin

Webmin is a control panel with management controls of a Unix/Linux based server close-up. Ideal when running a virtual server and you don't have the resources or budget to run a cPanel control panel. Webmin gives you web-based control over system users, system settings, and also services running on your server such as apache web server and MySQL Database server.

Webmin out of the box is ideal for single-user use, such as managing your own VPS or Dedicated Server in the background, however can be expanded with sister-products such as Virtualmin - a specific client-side web hosting control panel. Virtualmin gives users access to email configuration, domain names, database settings and more.

Step 3: Client, Support & Billing Management

One of the fundamental ways to succeed when starting a business is customer satisfaction. Your customers will be the heart and soul of your company image, reputation and ultimate success.

Choosing the right client management, billing and support system is crucial in the early days of any new host; and it needs to be just as good an experience for your customers, as it is for you.

WHMCS

WHMCS

WHMCS was first released in 2005, and has flourished in to a fully-fledged industry-leading web hosting complete solution. Recently partnered with cPanel, WHMCS and cPanel go hand-in-hand to create the closest relationship between client and website management ever.

Some of WHMCS best features include:

  • Professional, templated designs
    WHMCS is very sleek in their design methods. Being completely template-driven allows WHMCS to plug in to any websites' existing style very easily, giving your customers the 'all-in-one' user experience they're after.
  • Excellent Management Panel
    The WHMCS administration panel offers easy and quick access to all aspects of managing your web hosting business. Quick glances at new orders, pending tasks, unanswered support tickets and income summaries make WHMCS productive and efficient for all members of staff.
  • Multiple Currency Support
    This is useful if you wish to target more than one region. Global web hosting companies can appear more connected to their customers when they accept a currency they are familiar with, and WHMCS makes adding and managing currencies for all products super easy.
  • Advanced Automated Billing
    Running a business involves heavily in customer interaction. That interaction can often turn in to profit; if you have the right tools to hand. WHMCS provides you easy-access to setting up one-off or recurring automated invoices for any given service or product at any time, meaning you can focus on serving your customers in the best possible way and leave the billing and invoicing all to WHMCS.
  • Leading Customer Interaction
    Your customers will feel right at home once they've signed in to your WHMCS client area; summarizing their purchased products, domain names, transactions and support requests in a super-easy to digest format.
  • Built in Knowledgebase
    Having an easy-access FAQ section for your customers is very important. Worried about how you're going to fill this up? Don't be. Your customers will fill this in for you. You may see patterns in what your customers are asking you, or sometimes spot a "really good question" that you can include in your Knowledgebase FAQ's for all other customers. This makes great content, and also provides your customers with the knowledge they need quickly, and easily.
  • For a full list of WHMCS features, visit www.whmcs.com.
  • For help installing WHMCS, please see this video on YouTube.
  • For 50% off WHMCS licenses, remember to add a WHMCS license to your Belira Reselling Hosting package.

Blesta

Blesta

Blesta is a great alternative client, billing and support module. Although less commercially popular than WHMCS, the team that develop Blesta are very proud of their development, and the efficiency and professionalism of their development code.

Blesta features include:

  • Dynamic themes
    Choose from one of the themes made available within Blesta, or develop your own theme to ensure your installation remains unique.
  • Multi-company Install & Management
    A good feature of Blesta is the ability to manage different companies from a single installation. Each can have their own domain name, and you can configure all the settings individually (including staff, invoicing, emails and more).
  • Multiple Currency Support
    Accept money in a currency that is familiar to all your customers, either in the region you are targeting or globally.
  • Billing Automation
    Invoice and manage your customers' services automatically, without the need to worry or monitor client services individually. This allows you to focus on providing an excellent customer support.

Step 4: Payment Processors

In order to run a business successfully, you need two things. A passion, and a profit. As you've got this far, you've definitely got the passion, it's how you're going to retrieve your profit you need to think about next!

There are many different payment processing services available today, but let's focus on two excellent examples to get you started.

PayPal

PayPal

PayPal is almost recognized as the standard payment method on the web today; if not by you, by many of your future clients. Accepting PayPal is quick and easy.

PayPal offer the standard checkout-style system with no monthly fees, which involve the users going to the PayPal site during payments.

They also offer a Pro service, for a small monthly fee (plus transaction fees) you can process everything directly from within your own website.

Both of these PayPal services are fully supported by either WHMCS or Blesta out of the box.

Authorize.net

Authorize.net

Although PayPal is safe and secure for most users, a single payment method can sometimes alienate new clients if they've ever had a bad experience with any given company. It would be a shame for a potential customer to be turned away, just because for some reason they don't like using PayPal?

Authorize.net is a credit card gateway which allows you to accept and process credit cards directly from within your website. You can offer this seamlessly to both new and existing clients at any time.

Authorize.net do charge a sign-up fee, plus transaction fees.

Step 5: What kind of Web Host will you be?

Like any business category, there are different niches available within web hosting. Before you move forward and plan the running of your business, take a moment to think about the type of customers you want to target.

Web Host Types

Do you want to become a free web host? Or maybe an image host / photo hosting service. Most likely you will be planning on becoming a generic website hosting service. It doesn't matter which one you choose, you will need to make a decision before you can plan out your system resources, pricing and expenditure.

Step 6: Plan your packages, prices and expenditure

Many web hosts fail in the first 3 years due to being unsustainable. Start small, and think big. While you may have plans to grow at a quick rate, it's better for you to outgrow a smaller reseller hosting plan than it is to not even meet the costs of a high-end dedicated server.

Start by analyzing how many, and what kind of hosting packages you want to offer. Secondly, match this up with how much all your outgoings will be (such as reseller hosting cost, domain names outlay, the cost of your time). Once you have a rough estimate of these figures, you'll then know how much you need to charge per product (to fit within your reseller hosting account resources) and also how many customers you will need before you need to consider upgrading to the next reseller hosting plan.

Step 7: Domains, or No Domains?

Although some providers won't admit this, a common pattern in the Web Hosting Industry shows you'll either get an excellent web hosting provider, or an excellent domain registration service. Rarely will you find a competitively priced web host AND domain registration service together.

That said, it's not impossible. Belira prides itself on focusing on bringing the best possible services for the most competitive prices available on the web today!

A world of Domains

So; the big question is, do you prepare for domain name reselling beforehand, afterwards, or not at all?

If you have chosen a control panel which can natively connect to domain registration services (such as WHMCS connecting with Enom), offering Domain Names is very straight forward. WHMCS allows you to configure which domain TLD's (top-level-domains) you wish to offer, and at what price.

For a free professional WHMCS-compatible Enom API reseller account, check out our Reseller Addons.

The advantage to selling both website hosting and domain names gives your clients a reason to purchase all their required products from you, this increases impulse and motivational buying, and is another step towards making you the right choice!

If however, you do want to master your service of being a website host; that's fine too. You could also participate in partnering or affiliating yourself with a different domain provider to still give your customers some clear guidance in where they should get their domains from.

Step 8: Marketing

It's a difficult game to get into; reselling web hosting services. Marketing is often the downfall to many young web hosting providers, and it's easy to see why. There are some common tips you can follow to ensure a loyal customer base though.

Seek Out New Customers

The best kind of customers are the customers who haven't realised they need you! You can find them on blogs and forum communities all over the internet; asking questions such as:

  • How do I create my own WordPress theme?
  • How do I incorporate phpBB with my website template?
  • How do you go to a new URL using jQuery?

Seek New Customers

All these web development-based questions are asked all the time, and by finding these people and offering your help to them free of charge is a great way to start introducing yourself and your services.

To do this effectively; check out Google Alerts. Google Alerts lets you easily monitor the web for popular phrases and queries and sends you a daily summary of any new online activity matching that query.

It's a great way to stay current with questions and topics you are familiar with, and are hopefully able to start building some bridges between you and your new customers.

Participate in Relevant Communities

Be seen as a business that not only can help, but wants to help. Provide open assistance on forums regarding as many relevant topics as you can find. This isn't always easy; and it's very important never to be seen as cheaply self-promoting.

Only mention your products when the perfect moments arise. Be known for how helpful and supportive you and your business are, rather than how little and often you mention your business for little or no reason.

Once you're seen as a reliable source of information and support, people will naturally flow to you for not just your support, but excellent services too!

Step 9: Client Retention

It's all good and well getting customers, but how do you get them to stay?

The customer isn't always right, but they're always in charge

Like all things business, those that are paying us money want to feel like they are in full control of the service that money pays for; and rightly so! Keeping customers is all about how important you make them feel.

Give Back

  • Random acts of kindness
    Offer them freebies of your services, they cost you nothing more than it would if you ever lost that customer. Don't do it too regularly though, as if you got in a routine and stopped - this may have an opposite effect!
  • Jump on support requests quickly
    Set up high-priority alerts that either forward emails to a text message, or provide a different notification sound on your phone. Doing this stops you missing any support requests until you later check your queue, but also gives you the heads up as soon as one is received.
  • Be ready to make exceptions
    Exceptions are like surprises - and not always seen as a good thing. But they should be. Making clear exceptions for individual customers (such as special discounts or different resources) can be counter-productive to larger companies, but when you're just starting out; exceptions are one of the few things you can provide that they likely can't.

    If your customer needs half the disk space and double the bandwidth, and it isn't going to cause you any bigger issues; do it! If the customer appears unsure with your services, give them a 30 days free trial and monitor their usage to ensure nothing untoward is going on.

    Finally (and this is a great tip); when you notice your customers maxing out a lower-level hosting package, give them a risk-free 30 days trial of a higher package. This lets them experience the advantages; and many won't want to look back.

Step 10: Have fun

Have Fun

This may be a strange way to think about running a business, but as we mentioned earlier; you need two things to run a business successfully, a passion and a profit.

Have fun learning as you move along this great adventure. Feel comfort in the fact that there will always be someone able to help and advise you, be it friends, fellow forum and community members, and (if you choose a good one) your web hosting provider will always be on hand to offer advice and guidance whenever you need it.

Conclusion

And that's it! 10 useful, and very important steps to starting on a successful path to reselling web hosting services. If you feel any questions are unanswered, or you'd like any support with a specific part of starting to sell web hosting services, please leave a comment below.

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17
Jan 16
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