Starting a Web Hosting Business (Chapter 2)

By Scott Seong

Chapter 2.
Decisions, Decisions & Decisions

In the previous chapter, we discussed whether a web hosting business is right for you. If you decided to read further, I'm assuming that you understand the challenges of becoming a web host and also decided to make a full commitment in building a solid web hosting company. In this chapter, I'll describe high level decisions you'll have to make before establishing a web hosting company.

1. Decide on your service offerings and the operating platform

What will be your service offerings? Will you be offering shared hosting only, or will you be offering more advanced services like VPS, dedicated server, cloud hosting and also resell SSL certificates, and marketing packages with your web hosting service? Will you be offering web hosting services on Linux or Windows operating platform? You'll need to define your products before making more advanced decisions.

2. Decide on Billing and Control Panel Software

There are so many billing and control panel software to choose from, FREE ("open source") and PAID ("commercial"), and you'll have to make a prudent decision to stay hassle-free when you go live with your web hosting company. You'll need ONE billing software for your business, but will require ONE control panel software for each server you deploy unless it is provided by your "seller" hosting company.

You may opt to choose an open source billing software, but if you're serious about your web hosting business you'll be better off starting out with a commercial billing software and save your trouble. When considering a billing software, you'll have to understand that it MUST BE compatible with domain registrar account that you're reselling, control panel and payment gateway service you're using.

Control panel software allows your customers to configure their web hosting accounts from A to Z, so it's important to find a control panel that is reliable and easy to use. If your customer is experiencing a problem setting up their website in the middle of the night, you'll get a call to from them and you'll have to support.

3. Decide on Domain Name Reseller Account

As a web hosting company, you'll have to resell domain names. Significant percentage of customers requiring web hosting service also require domain names, so if don't offer domain names your customers will find someone who does and buy not only domain name from them but also web hosting plan as well. Finding a reputable domain name wholesaler is a must for success of your web hosting business.

4. Choose from Hosting Reseller Account, Dedicated Server or Colocation

Are you technically savvy? Will you have the time and up-front investment to procure server hardware and configure them yourself, and find a data center to rack them up? Even if you are technically capable, you'll have to revisit your business requirements and risks associated with hosting yourself before committing to do it yourself. Perhaps, you may be better of reselling hosting plans from a reputable hosting company, and save your energy for leaping your business later.

5. Choose Help Desk, Trouble Ticketing & Knowledgebase Software

A differentiator between a mom-and-pop web host, and a top-notch hosting company is the ability to provide excellent customer support. Setting up help desk, trouble ticketing and knowledgebase software will not only make your website professional but also save you a lot of time and money in supporting your customers. Be prepare to integrate 3rd-party help desk software with your billing and control panel software if it's not already part of your billing software.

6. Select a Credit Card Processor and Merchant Account

Choosing a merchant account and credit card processor is not an easy task, as you'll have hard time comparing apples and oranges from multiple providers and find the one that is right for your company. A few critical things to consider are discount rates (fees for qualified, semi-qualified, and non-qualified transactions), credit limit, chargeback policy, and whether the provider will allow you to charge 1-year, 2-year or even 3-year in advance for service(s) to be rendered in the future.

7. Develop 24x7 Support Plan

As discussed in the previous chapter, 24x7x365 is a must for a web hosting company. If you are starting out small, it's practically impossible for you (and your staff) to provide 24x7 support and make profit. You may opt to resell web hosting services from a reputable hosting company, or outsource your 24x7 support plan. We'll discuss pros and cons of doing it yourself vs. hiring 3rd-party company to achieve the 24x7 support.

8. Develop Sales and Marketing Plans

Regardless of size and type of business you're running, the success of the business is dependent on sales and profit of the company. You'll have to develop a business plan, sales plan, and a great marketing plan to advance your business into a profitable status in shortest possible time. We'll discuss search engine marketing, search engine optimization, social media marketing, and tactics you can use to promote your business without forking out tons of advertisement money.


Setting up a successful web hosting company is not an easy task. You'll have to make a lot of decisions before going live with your ecommerce business. Deciding on service offerings, domain name & web hosting wholesalers, billing & control panel software, merchant account, and writing marketing plans are a few decisions you'll have to make to launch a web hosting business. As with any business, trying to run your web hosting business on the side will not make you rich. You'll have to fully commit your time and energy in order to build a successful web hosting company.

<< Previous ChapterNext Chapter >>