Hi there,

I wrote the below article sometime ago and it has been sitting on a page on my website with noone reading. I really think it can help some people either getting started, or even existing webhosts with ideas. The article is below, and its very long.

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Introduction

Welcome to my guide of running a Web Hosting Business, this is for people wanting to get into the hosting industry or people who have just started. Maybe life long professional hosts may also learn something from this guide.

Now before anyone comments, this is not an official guide and it is up to the reader to decide whether they agree with the points made. Throughout this guide I will attempt to not base opinions but to try and encourage thought into your decisions, I will be using examples and there will be subjects where I will inevitably have to express my thoughts.

But remember they are MY thoughts, not the law and certainly I am not anyone who is going to tell you how to run your business. Remember this is a GUIDE.

What will this guide cover?

It will try and get your thought processes started in terms of where you want your company to go, what you want to achieve and help you along the way in covering aspects of running a hosting business that maybe you have yet to think of.

What this guide will NOT cover?

It's not going to tell the secrets of how to become a successful web host, because quite frankly no such guide will ever exist. It will not tell you what control panel to use, or what billing/support software to use, and it certainly won't tell you how much you should charge your customers.

This may be getting repetitive but I am trying to emphasise what this guide is trying to achieve, to help you in thinking about decisions that need to be made.

The next few pages/subjects are going to cover many aspects in regards to decisions that need to be made, the order of these subjects does not relate to the order that you should think about them in. Think of this guide as a kind of reference.

Where do I start?

This is a tough question, there are so many things to think about when starting up a hosting company. This is probably one of the most important times, you have so many tough decisions to make and it is best to get as many of those decisions done and things implemented BEFORE you open the doors of your web hosting company. It is a common trait for someone who wishes to start in the hosting industry to just setup a website, choose a name, get a server and viola, “I am a Web Host”. If that's you then shame on you!

Ok if that is you then you probably know the work that has to be done once your doors have opened that maybe you should have done before. Agree? No, well think about it in a professional sense.

If I am someone looking for hosting and I come across your website, and I looked closely at your setup and saw that you're ordering system sucked, you had a crummy web page saying “Email support@probablythebesthostintheworld.com ” with no contact information then I would probably not have the desire to sign up with you.

It's all about preparation, sorting out your website so it looks good, get a good billing system, use a ticket based support, proof read your website especially your Terms of Service (The Hosting Law).

Name

So you want to be a web host but you don't know what to call yourself. Been there, done that and so have many others.

All I can say is its not about the name, it's the whole package. I doubt very much that many web hosts get lots of business because they have managed to acquire a “pucker” name for themselves. (Other than webhosting.com, that's just mean).

Things you must ensure, choose a name that is respectable and try to keep it simple. Also don't assume that you have to have the word hosting in your title, there are many top companies out there who by looking at just there name you wouldn't have the first clue that they were a web host.

Remember though the name you choose should really match up with a registered domain name, and this is where things get tricky. Because of the shear volume of web hosts out there, and those damn companies who **** register domain names, being able to register a domain name to match the name of your business is becoming increasingly difficult.

So it maybe a good idea to use the two, while trying to choose a name, check that the domain name is available at the same time.

What if .com is gone but .net/.org/.co.uk/.dotdotdot is available?

Well that's up to you, if you feel happy choosing a company name that another company is already using then go for it. Be warned though that doing so may come to bite you in the toosh, because if you start doing well or the other company notices that you have setup shop they may not necessarily like it.

You should think about trying to choose a name that isn't being used and register .com, .net and .org. Also consider registering your own countries domain extension (i.e. if you are based in the UK then .co.uk, or .mars for mars or .scary if you're in Transylvania )

Should I register my hosting company as a legitimate business?

This question is really outside the scope of this guide, I am not to judge whether you feel the need to register as a company in the country you live. But if you want to do things properly, like setting up a merchant account, VAT registered ( UK ) etc. then it's something you should definitely consider.

The truth is you don't have to be registered as a business to actually host websites, whether this is breaking laws in your country I do not know. But there is always the feeling of professionalism when talking to customers knowing that you have done things right.

Market

Now this is another very important aspect of running a hosting business, you need to choose what market you would like to aim for. Probably the main thing is what platform you feel you would be best suited to, as a general rule of thumb it's often best to choose the platform you are most comfortable with. Unless you plan on using a server admin then by all means the choice is yours.

Generally the two main platforms are Linux and Windows, two very greatly in terms of technical aspects and expertise. When running a business in the hosting industry, generally Windows hosting is going to cost more than Linux, this is primarily the difference between the cost of a license for Windows and Linux.

Now there are differences in terms of pricing and features that will also dictate what type of market you will aim for. There is the budget sector, which is the most competitive market in the hosting industry and more hosting businesses are sprouting up everyday with prices getting increasingly cheaper. Now there is a strategy in the budget sector that has proven to be very popular and that is called overselling:


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Overselling

Overselling is basically a certain strategy that could be described as trying to use your server(s) resources to the best as possible. It is the act of selling more hosting accounts with allocated resources (i.e. disk space/bandwidth) than your server could handle if every customer started using the maximum amount of resources their account allows.

An example of this would be:

I have a server with 80 GB hard drive, and my data centre allows me 1000GB a month of data transfer. My server costs me $90 a month, and I have priced a package to sell as follows:

8GB Disk Space, 100GB Data Transfer(Monthly) for $10

Now that would mean I could sell 10 packages if I did not apply the rule of overselling, but those 10 packages would only allow me a monthly income of $100, meaning a profit of $10 a month. Yay! Profit.

Now realistically you could not survive of $10 dollars a month profit, even if you had hundreds of servers you just would not be able to cover operating costs (staff, your own wages etc). And the fact is that it is very unlikely that the customers on this server would use all of their allocated resources meaning that some would see this as a waste. So some hosts adopt the strategy of overselling which would work like:

I can't afford to only make $10 a month, so I need to squeeze more accounts onto my server.

If I put 15 accounts of the server that will leave me with a monthly profit of $60, if I put 20 accounts on there that would allow me a profit of $110.

Overselling in the hosting industry is a very touchy subject, it has become widely accepted that many companies do it at various levels in the industry (i.e. Bandwidth Providers, Data Centres, Web Hosting Companies, The little men that sit in your PC). But it is the level of overselling that many people will disagree on, there is a growing trend of “extreme overselling”. I am not one to criticise companies that practise this, and whether you decide to follow suit is your decision.

Platform

So you need to choose what platform you would like to offer hosting on, well you have three choices:

Linux

Windows

Both

(Any other platform is outside the scope of this article)

As mentioned above there are major differences technically in regards to Linux and Windows. The ideal situation is to choose the platform that you are most comfortable with, but in the hosting industry many people are driven to Linux because generally it is much cheaper to setup shop with a Linux server than it is with a Windows server.

There are other aspects like compatibility with hosting software (i.e. Control Panels), there are the differing opinions on the suitability of using Windows as a hosting platform due to security. Now on this point I can personally vouch that a Windows Web Server can be just as secure as a Linux Web Server, its all about the knowledge of the technician who is managing the server at the time.

If you look around there are so many more hosts offering hosting on Linux than there is Windows, one of the main reasons (other than what has been outlines above) is how easy it is to manage a Linux server with a Control Panel than what it can be with Windows.

Say for example most data centres will setup a Linux server with the option of a preinstalled control panel. That control panel allows you to do the mundane tasks that most people had to do on the command line back when control panels didn't exist (the good old days!). And to be honest control panels are getting more and more advanced as each day goes by, more advanced features and it is taking the need for root access away more each day. (I hope you know what root access is, if not then please go away).

If you do decide on Linux and you are a good systems admin, you know how to secure a box then fine. If you decide on Linux because it is “easier” and “cheaper” then you will probably want to consider using a third party system admin.

I you decide to be the lone gunman and head off into the sunset on your own (Yeeha!), then at least spend a lot of time getting yourself clued up on how to use the Linux command line. And you need to get good enough so you can call yourself a Systems Administrator.

There is also the natural reason to choose Linux because you feel it is the “better” platform for hosting (many would agree/disagree). I mean it is the natural platform for MySQL, PHP, and many other internet technologies.

There is also the large array of server control panels that allow a much more flexible choice to what suits your needs, there is not the luxury of such a large selection at the moment on Windows.

Now what about Windows? Why should I choose Windows over Linux? Well only you can answer these questions. But I will attempt to try and help you answer them by giving a little insight into why generally Windows is used as a hosting platform.

People who are looking for Windows hosting are generally the people who think that Windows is better, because they have Windows at home or because they need to use it for a specific reason. This could be because they need to use ASP, or the new .NET technology that has become quite popular.

In terms of managing a Windows server the same rules apply as if it was Linux, technically you need to be very good with managing a Windows server. Now just because you sit at home knowing how to tweak Windows XP does not make you a Windows Administrator, far from it.

In a way Windows is considered by some as being a little easier than Linux, purely because of Windows Update, the GUI and the endless amount of available documentation on the web. Now in personal experience with dealing with both Linux and Windows I find them very even. I am someone who has always been a Windows guru but learnt Linux after and even now I still find some things harder on Windows than Linux. From a personal point of view this is because Windows can be very complicated, but this is mainly due to how powerful the operating system can actually be when trying to do advanced things.

Now on the technology aspects, Windows is and always will be the natural platform for ASP. Now personally I love ASP, always preferred it to PHP but there are many people who will disagree with me.

So for a summary, you need to choose your platform depending on what market you hope to aim for.

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What market should I aim for?

Ok so I have explained about the different main platforms in web hosting and in a way they can also be defined as different types of market, Linux and Windows.

But unfortunately it does get a lot more complicated than that, and I will use an example of how three people can be grouped into 3 different types of markets.

Customer One:

I am a currently seeking a web host to put my personal website up, it will contain pictures of my family.

Now typically customer one would be looking for a basic hosting account, where they can easily upload their websites and expect it to work. Now they probably would not be too worried about their website being up 100% of the time, and they wouldn't want to spend much money. They probably would not be too concerned with website speed either. So the fact that their site is being hosted off a low specification server would not be a problem, or if there already existed many accounts on an already overcrowded server.

They may not be concerned on what platform the server is that hosts their account, but it will probably be Linux. As already explained in this article, this is more to do with Linux hosting packages tend to be cheaper than the Windows equivalent.

Now the type of market that the customer could be grouped in is the budget market, where they are seeking no thrills cheap web hosting.

This type of customer can be fantastic or very hard work, I will elaborate:

Say for instance this person who is looking for a place for their personal website knows how everything works, then it is likely that they will take up very little support time. But if it is someone who doesn't have the first clue then these generally are the customers who on average use support more than others.

The budget hosting market is probably the most competitive, and prices seem to be getting cheaper and cheaper as time goes by. This is great for the consumer, bad for the hosts who want to make a profit. The prices are decreasing for a number of reasons, disk space is much cheaper than it once was and bandwidth again is also much cheaper. The cost of actual hardware is going down all the time.

There is also the fact that because so many hosting companies are setting up shop, there is a massive price war that is sending prices down. The practise of overselling is probably most used in this type of market, and currently we are seeing trends of extreme overselling which is even being conducted by the larger hosting companies.

Customer Two:

I am looking for a web host for my businesses website, it generates a large amount of revenue.

Customer two would generally look for a host who can guarantee excellent uptime because of lost revenue when their site could be down. They may be looking to spend more than the average consumer, and would probably be looking for their website to load quickly.

This customer could be grouped in the E-Commerce market, where they may be seeking good site uptime and good specification servers. The type of platform will vary depending if they use any specific internet technologies like PHP or ASP.

Customer Three:

I am a website developer and I am looking for a host where I can upload my current projects.

Now this type of customer is probably one of the most difficult to cater for, they may be looking for specific features or specific internet languages that a host will support. Now it will depend greatly in terms of what type of platform they will aim for, this will fall directly in relation to the internet technology they will be using.

A PHP developer could be looking for specific add on PHP/CGI modules that is installed on the server, likewise a ASP developer may seek specific add on COM objects that are installed.

So the hosting package they seek would have to be feature rich, and they may be looking for flexibility in terms of the host catering for their needs. Like installing add on components directly on the server if it ever comes to them needing it.

They typically will be looking for good uptime, and more than likely they will want a website that loads quickly.

The developer may tend to stay away from the budget hosts, but obviously this may not always be the case.

Now I have shown examples of 3 different types of customers with 3 different types of needs, by all means there are many more types of markets and it is up to you to do your research and decide which would best be suited to you.

You could decide to cater for more than one market, or try to offer services to cater for all their needs. If you feel you can accomplish this then go for it, but in many businesses it is often advantageous to try and concentrate your efforts on a niche market rather than everything.

What Data Centre?

If you are asking the question “What is a Data Centre?” then please you do not belong in the hosting industry, this is not a beginners guide.

Choosing the right data centre for you is very important, it is where the very assets of your business, your customer's websites and typically a large percentage of your business will reside. This particular step needs to be thought of thoroughly, because if you choose a bad apple and you are hosting customers it can affect your business dramatically.

First things first, to try and narrow down your search you may want to think in terms of geographical location. Now almost every country will house some kind of data centre within its borders (Yes even Timbuktu !), so wherever you are in the world your options should not be limited.

It seems the most popular location for renting servers is the good old USA , this is because there is a very impressive network with many providers supplying ridiculous amounts of bandwidth. The USA is cheap to rent a server, and bandwidth is also very cheap. Generally it is cheaper than the average country, and you have a huge population which a large percentage use the internet.

This does not necessarily have to be the solution for you, just because everyone else does it, that shouldn't be the reason why you do it.

If you plan on targeting potential customers in Europe , then it would make sense to locate your server in a European data centre. Likewise if you are specifically targeting the UK , then use a UK data centre (Does it make sense yet? Oh I do hope so!).

Basically general rule of thumb, put your server as close to the [majority] of your customers as possible.

So you have now chosen a geographical location, what data centre shall I choose. Well the next thing you need to work out is what factors are going to influence your decision? Network, price, level of service, managed/unmanaged etc.

If you are looking to spend as little as possible, then there are many data centres that will be able to accommodate you, just don't expect the world.

You will want to investigate how good a data centres network is, there are many aspects that can define which data centre has a better network than the other. If this was to be discussed in great detail then this article would go on for pages and pages

I would recommend using the many Web Hosting forums on the internet to seek opinions, and get advice on what would be the best data centre for you.

Each data centre will also have a certain level of support which traditionally can be grouped into managed or unmanaged, I will discuss further.

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Managed or Unmanaged

The “old school” term for managed, was a data centre would look after your server for you, allow you to not have to worry about security fixes, kernel updates, DOS, brute force attempts, Pulmonary Embolus etc. (Again if you do not know any of these terms, I told you to go away a few lines ago!) Basically you could ask for something to be done, and a nice server admin at the data centre would do it for you.

But today the term for managed has changed and as already mentioned what “managed” actually means depends on the data centre. There is also to consider the cost difference between a managed and unmanaged server, in most cases an unmanaged server will be cheaper than a managed server.

What should not change is the basic level of support that any data centre should offer you. This is hardware changes due to failed equipment, free reboots, that's it really. Some data centres will charge for OS reinstalls, some will not. Others will charge for 0.00000001 seconds of there time while they look at what is wrong after a service has failed that you can't restart, again others will not.

So the question is what would best suit you?

Well there are a number of factors you will need to consider when making this decision, your level of knowledge, time you want to spend on the upkeep of the server etc.

When running a web hosting business you have to realise the time involved in looking after your hardware, it is the very foundations of your business and the general maintenance is very important. If you are a technically savvy individual and do not mind getting your hands dirty, then an unmanaged server could be best suited to you.

But if server skills for the desired platform are not as strong as they should be then a managed server is definitely something you should consider.

I will use some examples of how the two different types of service are suited to different individuals.

I am a Linux/Windows guru and am looking for a server, cost is also a factor in my decision:

Well the obvious choice it may seem would be for an unmanaged server, where you would generally save money with this option and the individual feels comfortable administering Linux/Windows.

I'm not great with Linux/Windows and I'm looking for a server:

Now this individual would probably be best suited to a managed server, it would take away the worry of maintaining the server. Remember though as already mentioned a managed server does tend to cost more. And when choosing a managed server, you need to be sure what level of service they supply (i.e. are they proactive, do you have to ask for something to be done?). There is nothing worse than signing up a data centre and expect them to do something, and then you find out later it's not in their support agreement.

I do not really want to get involved with the maintenance of the server, I want to concentrate my efforts on running the business:

A managed server would probably be best suited to this individual, and some would see it as a good choice. Running a web hosting company does take many hours of your time, with so many things to do and look after. If the worry of looking after your server was taken away then they would leave you with a lot more time for the other important aspects of running a hosting business.

Now factors to take into consideration, as already mentioned above you need to be 100% clear of what level of support the managed server will receive. You will not want to get involved with any server maintenance, and you need to be clear that there will always be someone to help you quickly when you ask for something to be done.

This individual will typically be expecting to pay more, because the managed service will need to cover as much as possible.

What else?

Well I have covered the important aspects that should hopefully help you in making a decision, but that is not everything and each person will have different things that are important to them when choosing.

Now I will go over a couple of factors that have already been mentioned in great detail, but just not directly. Price is one of them, if you are driven alone in your decision in regards to choosing a data centre based on “as cheap as possible”, then many of the topics mentioned above will not really help you.

If possible, price should be one of the minor factors when deciding where to host your customers, I cannot emphasise how important it is to find the right data centre for you. There are always things directly in your control in regards to the level of service that your customers receive, but what you don't have control over is what problems your data centre are having.

So it the data centre is down then this has a direct knock on effect to the rest of its servers, which are where your customer's websites are located.

So far we have covered Platform, Market, and Data Centre's. So what else do you need to consider? Ok so if we imagine that you now have chosen what platform(s) your hosting company is going to use, what market you are going to consider and what data centre you want to use. Well what about hardware specification?

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Hardware

Well the specification of the server that you will be looking for will depend on your situation, what market you will be targeting and how much you want to spend. I'm sure you realise, and I won't explain why it is so but a higher specification server will cost more than a lower one. (If you ask why then go jump off a building).

A host that could be targeting the cheaper end of the hosting market could have one of two choices. Either aim for the cheaper server which would mean lower CPU speed and lower disk capacity, or buy an expensive server with a higher specification CPU, more disk space and more memory.

Now this may not make sense at first but think of it in terms of resources available and the amount of accounts that can be placed on one server. A higher specification server will be able to handle more accounts than a lower one, and this can be very important especially is you plan on practising the art of “overselling”. There is nothing more trouble some than a slow server with hundreds of accounts on, you will have processes failing, customers complaining of slow websites and the server maintenance will take a lot more of your time.

This is pretty much it in terms of scope for discussion regarding hardware, I could talk about the advantages of different types of CPU's, memory etc. But that is for you to investigate.

So you now have a server and you know what market you would like to target, one important factor regarding the management of your hosting is are you going to use a Control Panel?

Control Panels

What is a Control Panel?

A control panel is a software component that runs on a server on top of the existing Operating System (OS). It is designed to allow server administration to be quicker and easier than if you did not have one.

The majority of main stream web hosts have a control panel of some kind whether it is supplied by a 3 rd party or whether it has been scripted in house.

A typical control panel will have multi tiered functionality, where there would the server administrator level, reseller level, and website level.

The administrator control panel would be used for server administration, managing hosting accounts, DNS, email etc.

The reseller CP can be used if you would like to offer a reseller product, it is a simplified version of the administration CP but usually with all the server administration features taken out. So effectively they would use it to manage additional hosting accounts setup under their reseller account.

The website CP is usually limited to the individual hosting account, so for every hosting account setup they would have their own individual CP. This allows them to manage the features of their own hosting account without having to contact their host every time. What they can actually do varies depending on the CP you decide to use, but typical tasks would be to upload files, manage email accounts, change contact information, setup account features such as databases and view resource usage.

Whether you decide to use a control panel or not is an important decision, you need to look at the differences of a company that does have a CP and one that does not.

I do not want to use a Control Panel:

Well you can expect a lot of time taken up with support requests because a customer will need to contact you even for the most basic tasks, such as setting up an email address or a sub domain. Now this could be a popular decision if you need to keep costs down as CP's do cost money, how much varies from product to product. This is also popular if you're aiming to offer a more personal service, say if you are targeting local businesses or the non-technical savvy end of the market.

If this is a decision you decide to take then make sure you know the server platform you are using inside out. Also if you have chosen a data centre offering a managed service, it is likely that the type of requests such as “Adding an email” will not be included in their support contract, so make sure you check.

There is also the added bonus of improved server performance. Control Panel's tend to be quite memory and CPU intensive, and on slow servers with little memory this can drastically alter the performance and stability of the server.

I do want to use a Control Panel:

The benefits of using a Control Panel have already been explained, and also the additional cost to be taken into account. (There are free CP's available, but whether you get the same functionality and support are open for debate) An important question is what control panel do you want to use?

What Control Panel?

If you search around you will notice that there are a wide selection of CP's to choose from, especially for the Linux platform where Windows does lack a certain degree of variety.

When choosing a CP you obviously need to check that it is compatible with the server Operating System, and that your server stands up to the minimum hardware requirements.

CP's have become so advanced, and every month new features are being released all the time. There are only a few major players in the CP market, but I will not name them here. If you have had any experience with the hosting industry or hosting in general then you already should know them.

You need to look at what you hope to be able to do from a server admin side of things. Do you wish to offer reseller accounts? Do you want your hosting accounts to have individual CP's? If so is it going to be basic or do you want it feature rich? Do you want to be able to customise it (i.e. change the look, install add-on components)?

These are many contributors that need to be thought about before deciding on what CP is best for you. Although you could always decide to develop your own if you have the resources and skills to do so, so that the CP can be modified to your needs and to how your business develops.

Now once deciding on a Control Panel, there are two other aspects of running a hosting business that needs to be considered. They are billing and of course support.

If you can find a Control Panel that allows you to manage user accounts, handle billing and support then great! Some people will want to try and get all three as one package (or as close as possible), where some will want all three separate. It depends purely on your own preferences, there is not a “best” way.

Yes it can be handy to have one system that allows you to manage all 3 but in practise this is not always the best thing.

I am now going to discuss billing and support solutions as if you were wanting to keep these as three separate entities, you will find products on the market that offer combinations of Control Panel/Billing/Support, Billing/Support, CP/Support, CP/Billing etc.

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Billing Systems

This is a strong market that offers a great variety of billing systems aimed at hosting companies, some of the products on today's market are so advanced that they are nearly as complex as some of the most advanced Control Panels available.

What will you look for in the right billing system?

Well firstly you need to locate a product that is going to fit in with your business, you need it to be flexible so that if you change your package structure or/and prices, you will be able to use the billing system to amend with ease and accordingly.

You do not want to choose something which is going to restrict what you aim to achieve, and example of this would be if you decided to offer domain registration services and your billing system did not support this. Or if you wanted to use a particular payment gateway and you billing system either not support it or was not flexible enough for you to implement it yourself.

Billing systems vary in price, some charge a one off free, some offer yearly licenses while others offer a pay monthly scheme. There are also free solutions on the market, but like free Control Panels it is debatable whether they offer the features and support of an equivalent that you pay for.

The aim of a Billing System is to streamline the process of charging your customers for the services that you provide. Normally the billing system will kick into place the very second someone makes an order, where the order pages are actually the billing system itself. The visitor chooses the package they want, inputs their payment details and the billing system them charges their account. This is normally done by setting the billing system to use a payment gateway or some hosting companies will have their own merchant account.

How a billing system handles the user from now on greatly depends on the product you choose, some will allow for automatic account creation on the server, some require a greater degree of administration than others. They all serve a purpose and it's up to you to decide which one is best for you.

Support Systems

So the billing system is there to take your customers money and make you rich, well you could think the support system is there to make your customers happy. And yes it is just as important as any other part of your business.

Not everyone will decide to use a support system, and just stick to email communication using their email inbox to track customer questions/problems. Now this is fine if you have a limited number of accounts to deal with or you are incredibly great at keeping your inbox organised.

In practise this is not a great solution, a growing trend in the hosting market is for companies to implement a ticket based support system that is very popular with users.

How does a ticket based system work?

Well when you think of the term ticket, you could think of the ticket as the actual support request that the user has. Typically a support system will allow the user to log into a web based part of the system where they can use a form to submit a support query. That query enters the system as a ticket, with a unique identifier so that it can easily be tracked/monitored.

You are then able to log into the support system and see the ticket that has been submitted with the unique identifier. This allows management of that ticket, either my assigning it to a specific department (containers that can be setup), or by replying to the user directly.

There are more advanced support systems that allow the use of email, where a user sends an email to a specified email address and the support system is setup so that the email is then transferred into the system as a ticket.

What is the right support system for me?

We that depends on the number of staff you have in your company, the departments (i.e. sales/billing/support). It is becoming increasingly popular to use the ticket system for all departments in a business, not just support.

The pricing structure to use a support system is very similar to the billing software out there, some are free, some charge a one off fee, others charge yearly/monthly.

What else could I use?

Well there are other systems that a host could use such as live support/sales, which is effectively a chat session allowing direct communication with a client/visitor. These chat systems can either be purchased as an individual product or they may be part of an existing support/billing system.

If you do decide to use live support/sales then please make sure that you have staff available to handle requests.

A typical chat system will involve a piece of code and a graphic on a web page, with different graphics being triggered to show if a staff member is available. If it is a common occurrence that it shows “Live Chat Unavailable”, then this may not set the best image for your company.

There are also forums to consider, now a forum can be used very effectively for support/sales questions as well as gaining valuable testimonials in response to good service that you may be giving. If you can get your clients to post regularly and get a community going, again this looks great for any prospective customer.

But this can also have the opposite effect, if support/sales questions go unanswered or if you receive negative feedback then this is not going to look good. Again if you do not have many clients or they aren't the type to post regularly then an empty forum can look like a host with few customers, which can be off putting for someone interested in your services.

Now we have covered many aspects in regards to what tools you will use behind the scenes when running your business, and also we have discussed the factors that you have to take into consideration when setting up shop.

Now what about actually getting hosting customers, what are the tricks of the trade and what can you do to become successful. If these are the answers you seek, then go see someone with a crystal ball. The truth is there are no “tricks of the trade” and there is no guaranteed way of becoming successful. It takes initiative, hard work and a trick for looking after the customer.

But I will now discuss certain things that you may find useful in your journey into world domination.

[Continued in post below]

Website

Now this is probably one of the most important parts of your business, it is it's “face” so to speak. It is the first impression someone well get of you if they stumble across your website looking for hosting, so it is important to bring across a professional image.

I am not going to talk about how to go about designing your website, if you are in a position to effectively do it yourself and make it look good then you know more than me and I can be no help to you.

In regards to getting your website designed, I would recommend using one of the many design companies out there that can be found by searching or by finding one of many web hosting forums and posting a request.

The cost of getting a website designed varies greatly and it depends on what you are seeking, what your current skills are and how unique you want to be.

If you are looking to save money then you could go and buy a decent looking hosting template, and just use that template for each page. These can be acquired from designers and from template websites, but be warned it is hard to tell how many other people will be using this design.

You could also go a get a unique template designed, or search for a unique template for sale. This tends to be more expensive than the templates that are resold, and price really does depend on the level of quality of the design. But to do this you will need to be fairly skilled in web development and have the right tools at your disposal to edit the template, place your own content on there and reuse the template for the other pages of your website.

Typically the most expensive option is to get a company/person to design your whole sight, where you tell them what sections you would like. It varies from designer to designer whether they will also include the site content but generally a site template is supplied and you are required to then add your own content.

A popular tactic by people who maybe are on a tight budget offer hosting for design work, and you will find many posts relating to this on web hosting forums. Obviously this is a tactic you could consider, and it could work very well for you, but there is always the chance that the design supplied is not satisfactory.

Website Content

I will now outline the typical web hosting website, and what the bare necessities should include:

Price Plan:

This is the page that includes all account features and prices to go with them, they can range from shared hosting accounts, to resellers to dedicated servers.

Order Page:

The place where people visit to actual order a product, this is usually a form that collects users information that is usually submitted via a script. Typically this is part of a billing system, where the user's information then gets submitted to into the billing system.

Support/Contact Pages:

Outlining how the various different departments in your company can be contacted, usually via email or phone. It may also include a FAQ, and it can be a good idea to supply a postal address as well.

Term of Service:

This is a very important part of your website. Now when talking about Terms of Service (TOS), this also covers Acceptable Use Policy, Spam Policy, Abuse Policy etc.

This page(s) will define the rules and regulations of what you do and do not allow, it effectively is a contract that someone agrees to when signing up for an account. It has to cover as many eventualities as possible, this is important so that you are covered legally and it allows you to take action when something illegal is done on one of your servers by a customer.

If you are going to write your own TOS, then make sure you do your research first. Take a look at other hosts TOS (but do not copy), so that you can get an idea of what rules and regulations they have in place. This will allow you to decide what you should or should not allow, and then get it down on paper.

Once on paper spend time writing it up in the style of a set of rules.

You also have the option of getting your TOS written professionally, which there are services on the net that can do this for you. Of course you could always consult a specialist lawyer, which some would consider as the only option as the TOS is very important.

So you have a website, so what next?

Well unfortunately you are going to need to attract visitors to your website so that this could possibly turn into a sale. Getting people to visit is not an easy thing, and it takes hard work to achieve the sufficient traffic to gain regular sales.

How do I attract visitors?

Well first you should start by trying to get some free advertising, submit your website to all the main search engines. Now there are tricks to achieving a high ranking in the search pages but that is outside the scope of this article.

You may also want to consider using a professional company who specialise in tweaking your website, and search engine submissions to get a good search ranking. This is when choosing a particular market is effective, rather than just hoping people will find your site by typing in “Web Hosting” (which will return thousands of results which your site will most likely be nowhere near the top). If you had a specialised market, targeting a specific type of person looking for a specific type of hosting, then they will be using different search queries such as “Tomcat Budget Linux Web Host”.

You will want to consider using some of the Hosting Directories out there and submitting your website, be warned there are hundreds and it will take a lot of your time.

You can also use forums to post offers, and also general participation in some of the popular web hosting forums may get you the odd customer or two. This can be done by advertising in your signature which many forums do allow.

But to be honest free advertising will only get you so far in most cases, like any other business it is likely that you will need to put hard cash forward to get the customers required to make your businesses work.

It is very difficult to effectively advertise on the internet due to the grand size of it, its all about trying to target the right people. Well first of all you could consider placing adverts in the form of banners on forums (especially web hosting forums), also if you're a host targeting a specific market then advertise on websites in that market. An example would be if you were in the game server market, then it could be effective to advertise on game websites.

Using Google to advertise is a very effective way of gaining traffic and customers if you don't mind paying for it, the Google Adwords and sponsored links are an effective way of getting the extra customers that you need.
Free Web Hosting

A rather popular and growing trend with hosts starting out is to attract clients by offering free hosting, with the hope of either making their forums look more busy so this makes their business look bigger than it is. It also can be used for hoping to attract word of mouth, or if those free hosting customers will like your service so much that they will upgrade their account and pay for a package next time. Some hosts require a link or advert to be placed on the users web site, which again is exposure.

This can be an effective way in getting your business off the ground, but be warned there are a lot of dangers when offering this type of service.

One is you may be a target for spammers wanting to exploit your “Free” services and use scripts to send out thousands upon thousands of SPAM emails, getting your server (SMTP) IP address blacklisted on the many SPAM databases on the internet.

If you're very unlucky you will all of a sudden find a flood of signups who cannot speak a word of English, which makes it very difficult to communicate with them. I do not wish to be stereotypical in this instance, I am just stating a fact. But the majority of this type of activity does seem to come from some of the areas of the continent of Asia, and most predominant in South Asia .

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Thank you for reading, I hope someone finds it useful. :-)

The article you posted is interesting... at least for me. Can I ask you to bold the internal titles so the text can be easy readable. I almost got headache because of unlear formatting.

I thought it was a great aticle as well (covered quite a bit, for a basic guide). I don't think the OP is able to edit the posts (due to a timeout) so I went in and bolded the main areas he discussed, the questions, etc., and made one small edit (forgive me) in the TOS section.

Probably the best first 7 posts *ever* by any member of any forum I've ever been a part of.