Choosing a Web Host if You`re a Reseller
Choosing a Web Host if You`re a Reseller
If you’re a website owner, choosing a web host is one of the most important decisions you will make for your business. If you’re a reseller web host, that’s even more true. The services you can deliver will directly depend on the service your web host delivers. In effect, you’re going to be the middleman, so you’d better have someone backing you who will help you stay in business.So what should you, as a reseller web host, be looking for in a web host? In many cases, you should be looking for some of the same things your clients will be looking for. But you will find that you actually have less flexibility than they do, because you have a lot more riding on your web host.
For example, let’s say that you host a lot of little hobbyist websites, a few not-for-profit informational sites, a smattering of artist/artisan sites that sell their wares online, maybe even some sites for the local garage bands. They may or may not be upset if visitors to their websites experience slow loading times every so often, or even can’t reach the site for a certain (brief) amount of time every month. How upset they get is going to depend on how seriously they take their website, and whether they treat it as a business.
You don’t have that option. As a reseller web host, your website and your ability to provide uptime is your business, period. And your potential customers will figure, by extension, if they have any problems getting through to your website, that you cannot provide good web hosting services. It really doesn’t matter if it’s your web host’s fault rather than your own. Do you really think your customers will accept that as an excuse when they’re calling you up to complain because their website is down?
Choosing a Web Host if You`re a Reseller – Make Sure Your Host is Reliable
I know that when you’re starting out with a new business, money is tight. You will no doubt be looking for every bargain you can find. Trust me on this, your web host is not the place to go with the lowest bidder.
Oh, issues probably won’t crop up right away. But after a while, you will start having slowdowns and down time. At this point your customers will start complaining to you about their websites not working properly. And you, in turn, need to contact your web host.
If you didn’t do your research fully when you signed up with this web host, this is when you might get a few unpleasant surprises. You see, you might not be the only one operating on a thin financial margin. Your web host might be using IDE instead of SCSI drives, or overloading its servers with too many accounts. (To be fair, reseller web hosts are often guilty of not allowing for enough of a margin as well).
So how can you find out whether your prospective web host is reliable before this happens? One way to judge is by whether they offer a guarantee. Some hosts will guarantee 99 percent uptime, and they back that up by refunding all or part of your monthly fee if they fall below that. That gives them a real incentive to keep things running smoothly.
Another way to tell whether your prospective web host is reliable is to visit its support forums. Browse around for a while and get a feel for what kinds of complaints the company receives. You will also want to check out other forums, such as the one here at Web Hosters (http://forums.devshed.com/web-hosting-98), to see what other people think of the company.
As you will see from the thread topics, customers can and will be very blunt about whether or not you should use a particular web host! That’s okay, though; you want that kind of information. Remember, that could very easily be your company that’s getting flamed…and if you go with the same web hosting company that people are putting to the torch, your company might be getting raked over the coals a few months from now. If you read about the kinds of problems others have been having with the web host you’re thinking about using, you can hopefully avoid them. If they’re bad enough, you will know that you need to avoid that web host entirely.
Choosing a Web Host if You`re a Reseller – Fun with Features
Let’s start with the most obvious features: web space and bandwidth. How much of that are you getting, and for what price? That affects what kinds of packages you can create for people, and what you can charge. Keep in mind what I said in the previous section: biggest and cheapest isn’t necessarily best. Consider what kinds of customers you plan to serve. Are they likely to need lots of space and huge amounts of bandwidth? Don’t assume that just because they’re hobbyists doesn’t mean they won’t have some pretty big needs in this department. Most podcasters are hobbyists, and they are notorious for eating bandwidth for breakfast.
Check out what other features your prospective web host provides. Remember, if your web host doesn’t provide it, you can’t provide it to your customers. Most of them will want to be able to have email addresses for their own domain–ones that don’t include your domain or your host’s domain. Other features you should look for are autoresponders and FTP access. If you’re going to have clients that sell anything through their websites, ask your prospective web host about servers with Secure Sockets Layer (SSL), MySQL, and shopping carts.
You will also want to know what kind of server the host is using (Microsoft, Unix, or open source operating system such as Linux). You or some of your clients might want to use server side scripts, and if you do not have this information you will not know what you can support. Remember, one way that many companies differentiate themselves is by how much they can offer their clients in the way of services; if this is the route you want to go with your reseller web hosting business, you need a web host who can help you with it.
Choosing a Web Host if You`re a Reseller – Customer Support is Key
Remember the scenario I mentioned a couple of sections ago when I discussed the importance of a web host’s reliability? I don’t know of any web host that has never experienced down time–and if there ever was one, it would have made the news. (In fact, one web host did make the news for being located in downtown New Orleans and managing to stay up throughout the aftermath of Hurricane Katrina). When your customers experience down time, for whatever reason, you have to call your web host. This is when you will find out whether its customer and technical support is at the level you expect.
Fortunately, you can do a little quality testing yourself before push comes to shove–before you even sign up with them, in fact. They should have their email and phone information easily available. Use this information. Send them an inquiry and see how quickly you get a response. If you really want to test them, send a sales-related question to their technical support department and see how fast they get back to you. They will probably have to reroute it to sales first, which will give you a chance to see whether they’re on the ball.
Don’t judge it solely on speed, though; how well did they answer your question? Call the phone number, too. Do you connect to a person or a phone tree? How long do you have to wait on hold? Did the person you spoke with seem knowledgeable? Did they have to route you to several other people before you got an answer to your question (one of my personal pet peeves)?
A number of web hosts have other forms of contact as well. I had a pleasant experience recently when I was doing a little research on web hosts. After poking around for a while on RackSpace’s website, a window popped up offering me the opportunity to do a live IM chat with one of their people. I did; he asked me a few questions as to what I was looking for, and answered mine. I appreciated the opportunity to get some quick answers without having to send an email or get on the phone.
You will probably want a web host that offers 24/7 customer support. People expect that these days. If your customers expect it from you (and they probably will, no matter what you say), you’d better be able to get it from your web host.
Of course, this is another area where visiting web hosting forums and doing your research will serve you well. When people complain about web hosts, it’s usually because of reliability and customer support issues. Those tend to be the sorts of things that get remembered, good or bad. So you want to know how your prospective web host is remembered…because that is probably how you will be remembered as well.
You’ll notice I’ve barely mentioned price in this article. There is a reason for that. I’m not saying that price doesn’t matter, especially since reseller web hosting plans vary wildly in both price and the amount of space/bandwidth you get for a particular price. But all of the other factors I’ve mentioned are far more important. Once you narrow down the web hosts you would be willing to use based on reliability, features, and customer support, then you can think about price. Good luck!
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Choosing a Web Host if You`re a Reseller
Advertising Ideas for Your Web Hosting Business
Advertising Ideas for Your Web Hosting Business
Stuck for ways to get the word out about your web hosting business? Keep reading; this article features a number of them, including some you might not have thought of before.When you’re too close to something, you sometimes get caught thinking in one particular way. That’s why you hear the phrase “think outside the box” so much, especially when people are trying to solve problems related to business. Often there is the sentiment that “this is the way we’ve always done it, so this is the way we should do it now.” Sometimes, though, it makes sense to tackle a problem in a number of different ways at once—and that’s very true for advertising your web hosting business, the topic of this article.
For the purposes of this article, I’m going to assume your web hosting business is already a “going concern” – you have the technical skills and the server in place, you’ve at least started to hire (or think about hiring) customer support people so you have some breathing room, you have your company’s website set up, and so on. Naturally, you need customers, or more customers. To get more customers, you need to reach the people who might be interested in your service, and convince them that you can offer them something they want that they can’t get anywhere else. How do you go about that?
Start by honestly considering what it is you have to offer that they can’t get somewhere else. Are your hosting packages larger than anyone else’s? Is your service better? Do you have some special knowledge from which they can benefit? If you’re having trouble figuring out how to answer this question, ask yourself what you would want someone to remember about your business after they have had contact with it, whether it’s through poking around your website, talking with customer service on IM or over the phone, or interacting with you in person as you go about your daily life. Once you know what makes you different from the rest of the pack, you have a focus to keep in mind when you start promoting your web hosting business to people.
Advertising Ideas for Your Web Hosting Business – Getting the Word Out Online
While we do want to think outside the box, we’ll start our brainstorming about advertising with the obvious. Most people will first come in contact with your web hosting business through your website. In that sense, promoting a web hosting business is no different from promoting any other website, so you can use the same techniques.
For openers, you will want to get a few advertising campaigns started. While you should at least consider other forms of advertising, online advertising campaigns are a good place to start. Many people have used Google AdWords with some success, so you will probably want to try it. Be prepared to adapt if it doesn’t seem to be working for you, though.
Another way to promote your web hosting business in the search engines is by naturally ranking near the top of the listings when people search for certain keywords related to your site. Searchers can still tell the difference between sponsored links and sites that make it to the top of the listings organically. The art of getting your website to score high on the search engine results pages (SERPs) is called search engine optimization. You can read up on how to optimize your website over at SEO Chat, which features many articles on various aspects of that topic. You can also hire a search engine optimization expert or company, but be warned: some of them engage in so-called “black hat SEO” practices that could get your website banned from the search engines entirely.
You will also want to get your web hosting business listed in various directories. I’m not talking about phone books, of course. There are plenty of web hosting directories online, and you want to get listed in as many of them as you can.
What about web hosting forums? Well, you can give that a try, but there are some caveats. Check out the other companies that advertise in web hosting forums. Do they sound like they’re offering way too much for way too little? That’s your competition. If you think you’d go broke trying to match their deals, you might want to stay away. It doesn’t matter so much whether they can actually deliver on what they’re offering; with so many companies offering those kinds of deals, people begin to expect it.
Advertising Ideas for Your Web Hosting Business – Offer Something for Free
Here’s another way to promote your web hosting business online that you might not have considered. Remember what I said earlier about reaching people who might be interested in your service? A lot of people who need web hosting are going to be regular visitors at certain kinds of websites: informational sites which offer valuable tips about running a business, being a webmaster, and web hosting (such as this one). You might be able to work an exchange with a number of those kinds of sites: offer to host them for free or a significantly reduced price, in exchange for the right to run a “hosted by yourhostingbusiness” banner on every page of their site.
Make sure you’re clear with them about the kind of banner you want to put up, and where you want to put it. No one in their right mind will give you space to put a large banner at the top of every page of their website, so forget about that right now. But you should be able to get something small and discreet that doesn’t detract from the entire effect of the page, yet lets people know you’re there. You might consider asking for a small space in the navigational area of their website; that usually gets plenty of eyeballs.
Offering something for free can be a great way to get noticed. You can offer a free trial of your web hosting service at your website. Or you can go to a business with lots of regular customers, such as a restaurant or a private mailbox service, and talk to the manager about offering free web hosting accounts to their clientele. Again, these would be free trial accounts lasting for only a few months, after which they’ll have to pay to continue the service. That should be plenty of time to hook them into wanting to keep the account.
If you don’t want to offer your actual web hosting service for free, how about something related to your business? Over on SEO Chat, there are a variety of software tools that visitors to the site can use for free. All of these tools help SEOs see how well they are achieving their goals. If you can create a tool that gives a user some information they need, especially if it’s related to your own service (bank websites offering mortgage calculators is the classic example), visitors will come to your site to use the tool. They’ll think of it as a free service, rather than obnoxious in-your-face advertising, and that’s a great way to leave a positive impression.
Advertising Ideas for Your Web Hosting Business – Give Your Customers More
As I mentioned, the goal of advertising is to get customers. You do that by giving them something they want that, preferably, they can’t get anywhere else. What do your customers really want? Or more precisely, what can you, and only you, give them?
One way to answer this question is with your own expertise. There are a lot of ways to communicate this to your customers. One you might not have considered is through tutorials. Writing some really good articles that contain the kind of information that would be useful to anyone who owns a website will help you attract traffic. You can even build each article around a certain key phrase. After you put the article up on your website, the search engines will pick it up, thus gaining you a greater presence on the SERPs. And of course, if they really are good articles, the word will get out, and you might even attract people by word of mouth–people who aren’t coming directly from the search engines.
In fact, word of mouth advertising in general works well, but it is certain to backfire on you if you don’t offer good customer service! Bad news always seems to spread faster than good; one disgruntled customer can poison the well for tens or hundreds of other potential customers. So treat all of your customers with the kind of care you’d extend to your very first (or very last) customer.
People expect prompt, 24/7 customer service and support from their web hosting service these days. Odds are you can’t offer that by yourself. Ask yourself how much time you can put into the business, monitor your help desk and support emails, and you might still be able to impress your customers with good service—at least for long enough to build up the business to the point where you can hire a customer support person or two to give you a break!
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Advertising Ideas for Your Web Hosting Business
Planning Your Web Hosting Business
Planning Your Web Hosting Business
Just as you wouldn’t travel in territory you don’t know without a map, you should not proceed in business without a plan. That’s as true for the web hosting business as it is for any other. In this article, the first of two parts, I will mention the six important parts of any business plan, and discuss three of them.Many people who get into the web hosting business figure that it’s just a numbers game. While it is important to get the numbers right, those figures that add up to a profitable business on paper may be hiding some mistaken assumptions. Let’s look at someone who plans to sell web hosting for $5 per month. He does the math for his business at 300 customers. Here is what it looks like:
Gross income=$1280 (300 times $5 minus credit card fees)
Server cost=$100
Control panel cost=$100
Advertising=$300
Customer support=$350
Total Costs=$850
Net income (profit) =$430
Net income per customer = $1.43
That might be a nice projection, but there are a lot of things it doesn’t take into account. How is he going to manage until he actually gets those 300 customers, hmmm? Until then, he’ll have to cover his costs himself. Likewise, how did he figure that his advertising cost would be $300 per month? That number can’t just be drawn out of a hat. How will he advertise? How well can he close sales?
If you want to go into the web hosting business, you need to treat it seriously, just as you would if you were starting any other business venture. A good place to start is by taking a job with another web hosting company to learn the ropes. Another way people start is by becoming a reseller web host, but even that is a serious business and should not be treated casually.
However you choose to start, you’re not going to be able to escape the responsibility of doing your research. That means reading books, asking questions on forums, checking out the industry online and at conferences. There are certain questions you need to be able to answer before you turn on your first server, and certain issues you need to at least be thinking about. In other words, you need a business plan.
If you are just starting out, and the business plan is chiefly for your own edification, you may be able to get away with just a few pages. But you should be thinking of the future, and what you plan to do with your business five years down the line. There are plenty of books that describe how to write a business plan; I’m going to cover the most generic elements of a business plan here, with a focus on web hosting. Even if you don’t see these elements as applying to your business—yet—you can benefit from reading all the sections, as they will get you thinking about the areas of your business you will probably need to address sooner or later.
Planning Your Web Hosting Business – Key Parts of a Business Plan
A good generic business plan features six key parts: executive summary, the enterprise, the market, operations, organization, and key risks/timeline. Not every business plan will cover all of these parts in the same amount of detail, and in the same business plan, these will vary significantly in length. Your own business plan will change as time goes on, you acquire more information, and your own needs (and those of your customers) change.
If your business plan is like a nonfiction book, the executive summary is a comprehensive introduction. As with most introductions, it should be written last, and for the same reason. You need the information contained in the rest of the work to give an introduction that truly covers the subject.
An executive summary tells the reader what the company is all about, who the founders are, and what they see the business doing—the vision for the company, if you will. It should also include a statement about the market opportunity: why now is the right time, and your company is the right company, to take advantage of the current situation. You’ll see these points repeated in other parts of the business plan.
The part of the business plan that covers the enterprise describes your company’s product or service, and how it holds an advantage in the marketplace. Obviously, for a web hosting firm, the basic service is hosting websites, but you will also offer customer support, and you might offer services related to web hosting (such as website design). As for your firm’s advantages, they will vary with your own and your employee’s backgrounds, among other factors. Maybe you have actual experience running, say, a small boutique. This gives you an advantage in understanding the needs of this kind of business, which may assist you in hosting websites for small boutiques. Or maybe you have a lot of experience explaining technical details to the less technologically savvy in a way that they can understand.
Planning Your Web Hosting Business – Key Parts of a Business Plan: The Market
This brings us to the third section of your business plan: the market. It might also be one of the most comprehensive. Yes, you need to do research (and maybe some soul searching) when you write the section about your enterprise, but you really need to dig when you work on this section. A thorough version encompasses seven parts: the industry; market size and rate of growth; target market; the competition; sales approach; pricing policy; and promotion and advertising. Some of these sub-sections may contain only a paragraph or two; you might find that putting the information from certain sections into a graphical format (such as a chart or a table) helps you think about it better than writing lots of text.
When writing about the industry, you’ll need to do significant research to get a good overview. What are the major challenges that face web hosts today? How much does it cost to get into the business? How much does it cost to serve customers? What keeps the industry a going concern? How much turnover is there? Finding the answers to these questions will get you off to a good start.
Discussing the market size and rate of growth naturally follows from the previous topic. How big is the web hosting business? How much money was made in the business last year? Two years ago? How much will be made in the next couple of years? How many people will need someone to host their websites? These are the kinds of questions that this section deals with.
Next, and perhaps most importantly, you must consider your target market. This is the specific segment of people looking for web hosting that you hope to serve. Do you hope to serve businesses in a specific geographic region? Podcasters? Online auction runners? Not-for-profits? Whatever segment or segments you serve, you need to know what they want and need, how to fill those needs, and—for the future security of your business—what the trends are for your target market’s future behavior (i.e. how their needs will change, and what they’re likely to do about it).
Planning Your Web Hosting Business – The Market, Continued
Now we come to another important subsection: the competition. Don’t pretend that you’re so special and unique nobody can compete with you. I used to make paper bead jewelry that looked so good, even an antique dealer mistook the beads for Murano glass. I displayed my work at art shows, and it was unique; no one else was making paper bead jewelry. So I had no competition, right? Wrong. Every other jewelry maker was my competition.
Likewise, every other web host who could fill similar needs is your competition. So you need to cover their key attributes in this subsection. Or, if it doesn’t make sense to look at specific web hosting companies as your competition, you might look at broad classes of web hosting companies—all firms that offer web hosting in a particular price range, for instance.
Next, you need to look at your sales approach. How are you going to reach your customers? Will your sales be conducted chiefly face to face, or (much more likely for web hosts) over the Internet? How much experience do you have with Internet sales? If you don’t have a clear idea of how you are going to reach your customers, guess what? You might not get any customers at all.
You may not have given much thought to your pricing policy, but you should. How and why did you pick the price level for your service? Is it higher, lower, or comparable to similar offerings on the market? Is there any particular risk to the business in having your prices at their current level? Or, on the contrary, is there some benefit to your price level? The point is, you shouldn’t just pick a number; you should know what it would take to turn a profit, and whether you can get enough business at that price point to stay in business.
Finally, we come to promotion and advertising. This covers any public relations, advertising campaigns, educational programs and other tools that you will use to drive demand of your service. Planning to get a booth at the local county fair and give out brochures about your web hosting service? That falls under this section. How about pay-per-click advertising through the search engines? Ditto. Radio ads? Sure. Visiting the local public school to give a presentation on building a website, then helping the students to set up their own—hosted on your server, of course? That counts too; even if you set the students up for free, their parents just might become paying customers.
That’s all I have room for in this part. Hopefully, it has given you a better idea of what you need to think about when starting your web hosting business. In the second part, I’ll tackle the final three sections of a business plan: operations, organization, and key risks/timeline. See you then!
Planning Your Web Hosting Business, continued
Welcome to the second and final part of this discussion about planning your web hosting business. Last time, I gave you only half of the roadmap for what goes into a business plan. This time, after a recap, I will give you the other half.In my previous article, I explained that web hosting was a business just like any other. Sure, it has its own unique challenges, but you want to approach it as a business. That means that you want to have a plan before you proceed.
I also mentioned the six parts one usually finds in a business plan: the executive summary, the enterprise, the market, operations, organization, and key risks/timeline. Since I did not have the room to cover all six in the previous article, I covered the first three.
To review, then, the executive summary gets written last because you need the information in the rest of the plan to fill in the information. It provides an overview. It should include what the company is about, who the founders are, and what your “vision” is. It should explain the market opportunity. If you are using your business plan to seek funding, it should also explain what you plan to do with your funding. It should also cover where you are now and where you hope to be in the future (say five years from now).
The section talking about the enterprise describes your company’s product or service and what its advantage is in the marketplace. With so many different web hosting companies in the field, this is particularly important. If you hope to compete, you need to have some kind of focus.
I went into a great deal of detail about the section that covers the market. And rightfully so—if you hope to compete, you’d better do your homework. You need to know the industry, your market size, your niche, who your competitors are, and how you will reach your customers, among other things. It can seem more than a bit overwhelming, but the point isn’t to paralyze you; it’s to help you understand that there’s work to be done, and research is your friend.
So much for the recap. Now I will cover the remaining three parts of a business plan: operations, organization, and key risks/timeline. While these parts may not seem as important as, say, the market section of your business plan, they will give you and anyone who reads the plan a better handle on how the company is projected to operate on a day-to-day basis.
Planning Your Web Hosting Business, continued – How Will You Operate?
The word “operations” covers a plethora of items. And what you put in this section may vary depending on whether you’ll keep this plan private or show it to other people (and which other people you will show it to). I’m not saying this is a section in which you will be dishonest. But not every company is comfortable disclosing the same amount of information in this section. For instance, if you’re a manufacturer and the creation of your product involves certain trade secrets, you probably won’t go into too much detail about those here.
Certainly web hosting companies may have trade secrets as well that affect their operations. While you might be circumspect about those, there are other things you will need to include. You might discuss staffing, productivity (sales and processing among other matters), standards of quality for customer service, and so on.
You will want to discuss your current facilities, location, and information systems (yes, that means the software you will use to keep track of everything, among other things). Basically, this is the part where you consider the nuts and bolts of what you need to keep your business running. You should also consider your future needs here. Are you planning to expand? If so, where and into what kind of space? Will the space be available when you need it?
As with every part of your business plan, you need to do your research. You can, and should, call on your experience in other businesses as you consider what is reasonable here. In fact, if you haven’t already worked for another web hosting company, you should definitely consider it; it will help you learn whether this kind of business is for you. What better way to do research than on the inside? It will also help you engage your imagination as you visualize more completely what your business will look like.
Planning Your Web Hosting Business, continued – Getting Your Organization Organized
In some ways, this section is an extension of the operations part of your business plan. The sort of information that you would put on an organizational chart goes here, but that’s just the starting point. As a new web hosting company, you may not need to include everything I’m going to list here, but you should consider it.
The first thing you will list in this section is the company’s executives. Include short career bios of anyone whose title starts with “chief.” This also gives you a chance to look objectively at skill sets—what skills do you have at your disposal, and which ones do you need to make sure your company will be successful? You will also want to include how much you plan to pay your officers. Yes, you should even draw a salary for yourself. If you want your business to support you, you need to plan that from the very beginning.
You should also include information about supporting professionals in this section. You probably won’t hire certain people full-time, but you will want to have access to their skills when needed. Do you have an attorney that you trust? What about an accountant for your taxes? Will you handle your payroll yourself or use a payroll company? Your list may be a little different from this one, and you certainly won’t need every kind of professional! Give it some thought, and include the names, addresses, and telephone numbers of the ones you need.
If you plan to grow significantly, you should also include projected headcount increases. Split them up by area: so many sales people, so many customer service reps, so many technical people, and so on. You may even want to include an organization chart. This might sound like a lot of detail, but these are the kinds of things you will need to be thinking about if you plan to grow your company.
Planning Your Web Hosting Business, continued – Preparing for Risks
(Page 4 of 4 )
Nobody likes to think about how things might go wrong with a new venture. But if you want to be successful, you do need to be prepared in case the worst happens. There are certain risks that are inherent in every industry, and web hosting is no exception. Those risks should be noted here (and again, this is where doing your homework comes in handy).
There are also certain risks that are specific to any new venture. Any young company faces certain dangers. What if one of the founders or officers suffers a debilitating illness or dies? They could be difficult or impossible to replace. Many firms will buy life insurance, with the company as the beneficiary, to mitigate this kind of risk. This of course brings up the other thing that belongs in this section, namely, how you plan to respond to these risks if and when you have to deal with them. If you have experience dealing with these particular risks, this is also a good place to mention that point.
Another good thing to put in this section is your timeline. While you have already talked about your future plans in other parts of the document, you might want to summarize them here. You can do it in a timeline format, which gives you a nice at-a-glance view as to what your targets are and when you hope to achieve them. Another advantage of using a timeline is that you can also go “backward” by showing what you have already accomplished as far as achieving your goals: skills acquired, employees hired, research completed, web host found if doing reseller web hosting, customer packages created, that sort of thing.
A timeline that shows your targets makes a good counterpoint to the list of risks. It can help clarify your focus: “here are my goals, here are the things that could get in the way of my achieving these goals.” Thus, putting the two together in this way helps to give you a good context. If the entire business plan can be seen as a map, this section can be thought of as the dotted line along the road you plan to travel. This doesn’t mean that the rest of the plan isn’t important; with the research you’ve done to flesh it out, it’s what helped you draw that dotted line to begin with.
If you want more information about business plans or starting a new business in general, the Small Business Administration’s website (http://www.sba.gov) should serve as an excellent resource. Among other things, it features articles that can help you learn about starting, financing, and managing your business. Good luck!
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Planning Your Web Hosting Business
Planning Your Web Hosting Business, continued
Common Myths about Reseller Web Hosting
Common Myths about Reseller Web Hosting
A lot of people have considered getting into the reseller web hosting business because they heard it was an easy way to make a lot of money. If you’re thinking along these lines yourself, keep reading.Reseller web hosting is easy. With the various control panels available, even those who are practically phobic about technology can run their own reseller web hosting business. It’s totally automated. It simply comes down to the math; once the monthly fees from your customers cover the monthly fee you pay your hosting company, everything else is profit. So all you have to do is sit back and watch your bank account expand as the money comes rolling in. After all, you’re working for yourself, not somebody else, so you won’t have anyone on your back.
If that is what you think it is like to run a reseller web hosting business, think again. Anyone who owns their own business will tell you that it is a lot of hard work, and that there is no such thing as fast, easy money. Owning a reseller web hosting business is no exception to this rule.
In the article “Becoming a Web Hosting Reseller: is it Right for You?” which you can read here, I discuss some of the things you must consider as you set up your own reseller web hosting business. It is a basic article, but it should get you thinking along the correct lines. If someone you know is planning to go into the web hosting reseller business, and seems to think it will be a lot less work than whatever they’re doing now, you might want to hand them this article in addition to that one.
You see, there are a lot of misconceptions about what is involved in running a reseller web hosting business. In this article, I’m going to tackle the mistaken ideas that many novices have about running such a business. Your fledgling company will have a much better chance to take wing if you wipe these false notions out of your head.
Common Myths about Reseller Web Hosting – The Control Panel Handles Everything
I’m not going to say a word against control panels. Graphical user interfaces have been around for a long time, and they have proven their worth for people who are not quite as technologically inclined as your average ubergeek. Even the geekiest of users must admit that they can sometimes get their job done much more quickly with a GUI than with a command line (depending on the task, of course).
Take cPanel, for instance. The company offers a Web Host Manager control panel from which a user can handle more than fifty separate tasks for his business and his clients. It also offers a control panel for end users (the people whose websites you’re hosting) so that they can make some changes on their own accounts without bothering you, which should make your life a little easier.
Even so, the Web Host Manager isn’t a control panel that your grandma can use unless she’s more tech savvy than mine was. For example, one of the tasks the WHM lets you do is install Perl modules. Unless you know what they are, why you would want to install them, and what effect they will have, to know that you can do it isn’t particularly helpful. What I’m saying is, you need at least some level of technological knowledge, and if you don’t have it, you need to be prepared to spend the hours it will take to acquire it, even if you’re using a control panel. Otherwise, you could end up doing something you really didn’t want to do in the first place.
One problem with GUI interfaces in general is that they can prevent you from doing things that you really do want to do, or make it more difficult than it needs to be. A control panel is simply a tool. It is not a be all and end all. It may be an effective shortcut, but you need to understand what the shortcut does and does not let you do before you use it. You will still need Windows or Linux skills to secure, configure, and troubleshoot your system.
Common Myths about Reseller Web Hosting – The Profit is Just a Matter of Math
That may be what it looks like on the face of it, but as with many things, there’s more going on than meets the eye. To explain this, let me start with why many people think it really is just a matter of math.
Let us suppose you find a hosting company from which you can get a reseller web hosting package for about $100 a month. This package includes 80 GB of hard disk space, which is not exactly the easiest thing to find, but not impossible (Hostgator has a 20 GB package for $100 per month; on the other end of the spectrum, PowerHost offers 100 GB for the same price, but since the time this article was written, they have proven to be difficult to find). You may decide to resell this space in 25 MB blocks at $5 per month.
Each gigabyte is 1024 MB. To use round numbers, let’s assume you can sell 40 accounts for every gigabyte of space you have. Multiply 40 by 80 and you get 3200. Multiply 3200 by $5 and you get $16,000. Subtract your own $100 per month, and you’re left with much more than $15,000 in sheer profit. At least, that’s how the reasoning goes.
If you think that bit of math covers everything you need to know about turning a profit in reseller web hosting, you’re all but destined to end up bankrupt. It’s not just a matter of the cost of the hardware or the space. You can’t put 3200 accounts on a single 80 GB server, because you will overstress the machine. That will lead to increased downtime and support tickets, not to mention unhappy customers.
Remember, too, that storage space isn’t the only important aspect of online accounts; you must also consider bandwidth. Just as servers come with a limited amount of space, they also have a limited amount of bandwidth, which dictates how much online traffic they can handle. You should explicitly try not to sell all of your machine’s bandwidth, in order to allow some kind of safety margin.
It’s true that many websites won’t use all of the bandwidth you assign them. But some might, and some will even eat bandwidth for breakfast, at least sometimes. This is particularly true if one of the websites you are hosting gets “slashdotted” (mentioned in Slashdot or some other news-related website). Websites with active forums could also be an issue, as well as sites that feature podcasts. Do your homework here; it could save you a lot of headaches later.
Common Myths about Reseller Web Hosting – You Won’t Have to Work Hard
There’s an old joke about the man who was getting ready to quit his job and start his own business. Chatting with one of his soon-to-be-former colleagues, he said “The best thing about owning your own business is that you get to work half-days.”
“Really?” his coworker asked, picturing glorious days of working only in the mornings and knocking off around one for lunch, then having the afternoons free.
“Really,” the new business owner assured him. “The first 12 hours you work for your business, then the next 12 are all yours.”
He had the right attitude. The truth is that most people with their own business work twice as hard as they ever worked when they were employed by someone else. On the other hand, if they are successful (a very big “if”) they can make twice as much money (or more). And despite the headaches of owning their own business, they often have twice as much fun.
Those headaches should not be underestimated. There are a lot of negatives to owning your own business, and that’s true whether it’s a restaurant, a shipping company, or a web hosting business. With a web hosting company, for example, you will probably have to consider hiring help so that you have 24/7 customer service and support; you will have to deal with credit card processing fees (not to mention setting yourself up to accept credit cards in the first place); how you will advertise, and with what budget; and so on.
You will also have the headache of dealing with your competition – and trust me, in the web hosting industry, there is a lot, and it is cutthroat. Many of these companies spring up seemingly overnight with offers of incredibly cheap web hosting. As you probably gathered from what I’ve said so far, these companies are heading straight for bankruptcy. But new ones keep popping up to replace them, which makes it hard for a company that wants to be in the business for the long haul to get established. “Why should I buy a web hosting account with you when Crazy Cheap Hosters offers the same thing for half of what you’re charging?”
This is what happens when the barrier to entry for a particular field is very low, or at least perceived to be very low. If you really want to make a go of it in the reseller web hosting business, you need to treat it like a real business. And, as anyone who owns a real business will tell you, there are no free lunches.
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Common Myths about Reseller Web Hosting
Four Building Blocks for a Web Hosting Business
Four Building Blocks for a Web Hosting Business
There are many things to consider when you begin building your web hosting business. One of the most important concerns how to attract customers. This article discusses four areas you need to pay attention to if you want to get visitors who need web hosting to your site…and turn those visitors into clients.There are a million things to consider when you decide to start your own web hosting business. You need to think about what company to buy your package from (if you’re a reseller), make sure you have the technical skills, create a business plan, deal with the bookkeeping, and so on. Some of these points are the sorts of things you would need to think about no matter what kind of business you decided to get into. But some challenges are a bit more peculiar to web hosting, especially as an online business. In this article, I will discuss four key areas that deeply affect how well you attract customers to your fledging business.
Let’s start with the design of your website. This is the first thing that any prospective customer sees. As you’ve heard before, first impressions last. On the Internet, that’s even more important; if you make a bad first impression, you won’t get a second chance.
So how do you want to be seen? Your website should be easy to navigate, of course, because nobody is going to take the time to learn how to maneuver around a confusing site, especially since there are a million other places a web surfer can check out for the same services (just enter the phrase “web hosting” into Google to see what I mean). It also shouldn’t look like the thousands of other web hosting sites out there, which seem to have been built with generic templates. How will you ever develop a professional corporate identity if you look like everyone else?
Someone who is looking for web hosting for their website wants to feel as if they’re dealing with a professional. If you come off looking like an amateur, you will lose their business. That’s true whether the site they want hosted is a small hobby-style site, an educational not-for-profit information center, or a large commercial e-tailer.
Four Building Blocks for a Web Hosting Business – Be More than Just a Web Host
You offer various web hosting packages to your clients. You provide customer service via phone, email, and IM. You answer their questions about what software will work with your hardware. You’ve streamlined your billing process so that it is quick and painless for both you and your customers. Guess what? You could be doing a whole lot more.
There are very few website owners who know everything, and the ones that think they do are wrong. You could do your clients a great service by posting articles and tutorials that help them get set up. If you’re targeting your service at small e-tailers, some articles that talk about what to look for in an online shopping cart, how to set one up, and organizing an e-commerce website would certainly be in order. Prospective customers who see these articles will know that you understand the needs of their business, which will weigh strongly in your favor.
You can go beyond phone, email, and instant message in customer service if you start a set of forums. Support forums not only let your administrators address issues in a more informal setting; they also let your customers communicate with and help each other. You could see a community start to grow, which would be all to the good. You might even start getting suggestions about ways to serve your customers better. These might be in the form of complaints, or they might be phrased more like, “I’m trying to do X, and it would be really helpful if I had Y to support it. Is anybody else having the same issue?” Nobody likes to feel as if they are an island; support forums give you a potentially more proactive way to communicate with your customers, and both you and your customers stand to benefit from this. Besides, many website owners check out various support forums when they are considering what web hosting company to hire.
All of these services provide additional content for your clients and prospective clients. Think of them in part as opportunities to prove that you are a professional who is serious about his business and about helping your customers. Remember also that the extra content will bring extra traffic to your site, and quite probably result in more sales. That can certainly make it worth the extra work!
Four Building Blocks for a Web Hosting Business – Don’t Ignore the Search Engines
Actually, the heading of this section is an understatement. Since more than 90 percent of your business is likely to come straight from the search engine results pages (SERPs), you must understand how search engines work. The success of your business depends on it.
What this means is that you need to learn how to learn to optimize your site so that the search engines will index it and give it a high ranking for your chosen keywords. But keep in mind the points I discussed in the previous section; you must also build your website so that it is friendly to visitors. Fortunately, it is possible to build a site for your web hosting business that will appeal to both search engine spiders and flesh and blood visitors. Remember, if you have the greatest hosting plan in the entire world, it’s utterly useless if nobody knows about it.
So how do you learn about search engine optimization (SEO)? Well, you could start by doing a search on the phrase in Google. Or even better, you could pay a visit to SEO Chat (http://www.seochat.com). Either way, you will find more information on this topic than you can shake a mouse at, much of it free for the viewing.
If you decide you would rather hire someone else to optimize your website, you will also find plenty of SEO companies. Please be cautious when choosing one, however, since many of them are somewhat less than honorable. Some even engage in practices that could get you banned from the search engine indexes entirely. Google has some webmaster guidelines that talk about SEO and what to watch for when you consider hiring a company.
Four Building Blocks for a Web Hosting Business – Find a Niche and Fill it
Especially when you are just starting to build your business, you cannot be all things to all people. As with the search engine business, the web hosting business is highly competitive, with a number of highly visible players that get a lot of customers. That doesn’t mean, however, that the little guy has no chance at all. It does mean that you may need to think differently.
Rather than catering to everyone, think about the market and the kinds of people and organizations who want web hosting. Not all of them have the same needs. You may be able to cater to some needs better than others. Think about this, and be honest. If so, you can turn this into a virtue, and specifically set yourself up to sell web hosting to those whose needs you could fill best.
Catering to a niche is a great way to set your web hosting business apart from others. For example, there are web hosts who cater to the special needs of those who run online forums and communities. Others offer web hosting to podcasters, who have technical concerns that include eating bandwidth for breakfast. Still others cater to small online e-tailers, while others enjoy handling the web hosting needs of not-for-profit organizations.
While the four main points that I’ve mentioned in this article aren’t the only things you will need to succeed, they will certainly help to get your web hosting business off to a good start. You need a website that projects a professional image and includes extra content that attracts visitors. The site needs to be friendly to both search engines and web surfers. And finally, you need to cater to a niche to help set you apart from the thousands of other web hosting companies competing with you. Good luck!
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Four Building Blocks for a Web Hosting Business