Planning your webhosting business

In my last article, I talked about the factors which should be present in order to become a successful webhost. In this article, I will talk about planning for the success of your webhosting company.

In order to become successful, you will need to plan for your webhosting company’s success. At the heart of your planning phase is a business plan. A business plan helps you put all your thoughts on paper prior to starting your webhosting company, and helps you identify any issues which need to be addressed prior to launching your business. A business plan is primarily composed of the following sections:

  • Products and Services
  • Market Analysis
  • Marketing Strategy
  • Sales Strategy
  • Milestones
  • Management Summary
  • Financials

Since it is technically impossible to cover all of the above aspects in one article, I will start by taking a look today at the products and services a webhost can sell, and will discuss the subsequent sections in later articles.

Products and Services to consider selling:

  • Domain registration services: Usually, there isn’t much profit to be made here. However, if you’re offering shared and reseller hosting services, you will need to offer domain registration options, because many clients bundle their domain name with their shared or reseller hosting service.
  • Shared hosting services: While there is a margin profit to be made here, you will need to provide very good support, since all your competitors are doing it. I highly suggest you hire a service company which provides outsourced hosting support. This will ensure that you’re providing 24/7 support, at the fraction of hiring a full-time employee.
  • Reseller hosting services: This offering is very similar to shared hosting services, except that you’re allowing your clients to resell hosting services to their clients. Therefore, your support will need to be even better since your customers are business owners, and will lose money every time your service is unstable.
  • Dedicated Servers: A dedicated server is a physical hardware computer with high specifications, which will be dedicated to one client only, whereas a shared hosting account resides on a server shared with other accounts, as the name implies.
  • VPS hosting services: A virtual private server (VPS) is a part of a dedicated server, functioning as a dedicated server, through a software technology called virtualization. This technology allows you as a company, to sell a VPS to your customer, which almost functions as a dedicated server, at the fraction of a price of a dedicated server.
  • Cloud hosting services: While a VPS server is usually part of a dedicated server, a cloud server usually sits on top of a server farm, which usually consists of hundreds of physical servers or more. This allows your server instant upgrades to virtually unlimited resources and failover abilities.

My next article will talk about additional streams of income for webhosts, by selling products and services which will complement your webhosting offerings. Stay tuned!

Samer Bechara is a business consultant who specializes in business planning, online marketing and web-based technical solutions. He can be reached through his website, Thought Engineer.

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