So you want to start a hosting business?
Do you know hosting is the most saturated business in the whole universe? If there is intelligent life on another planet and they’re doing big business, hosting would still be the most saturated business. Saturation means there is lots of competition. Lots. A large number of people – companies, individuals – are selling hosting.
Why are so many people selling hosting? Because,
- the barrier-to-entry is next to nothing.
- the demand for hosting is still strong.
- there are just too many people online, and just too many sites that need to be hosted. Someone’s going to get pissed off at one hosting company and would want to look into shifting their hosting somewhere else. Lots of attrition, lots of opportunities.
So should you, the budding entrepreneur, even bother to get into this whole hosting business?
I don’t want you to start your hosting business as if you are going to compete with the big boys. I think unless you are neck deep in technology and have access to something radical within the hosting/data/storage industry, you are better off doing something else.
I started selling hosting a looong time ago. I knew I would become a millionaire selling hosting to hundreds of thousands people all over the world.
Currently I have about 30 clients, from a total of four countries. Shit happens? Not exactly. You see, I learned the hard way. I was not being smart about it, not being creative about it. I was being too linear in my approach. Hindsight is perfect after all.
Now, with my 30 or so clients, I have a better perspective.
For example, my hosting business exists primarily to finance my online expenses. From Aweber to BufferApp to pretty much everything in between, I have the peace of mind that my expenses are taken care of and I can afford to take bigger risks online. By God’s Grace.
The left over money after a year – and there’s some money left over – is spent on upgrading a ticket perhaps, or buying something nice. Like a watch or something.
As you see, I am not rich from hosting. I intended to be. For like an hour or two. I read the eBook and it helped set me straight (more about it later – and don’t worry, the eBook can be had for free). Then as luck would have it, I asked a lot of questions, as to why am I trying to set up a hosting business.
All of it helped. And then some. Now my hosting business – that I hardly ever advertise – exists purely because it can. I am now not even interested in getting new clients, having found ways to leveraging my time more effectively.
So now, having said all that, here are the breakdown of how you can start selling hosting!
Steps to Your Hosting Business
It is time to be creative about it (this is the home of creative self employment after all).
I like simplicity. I will offer you the same.
First, let’s set up the technical side of things. I am doing this first because it is so damn cheap (and pretty easy if you’re comfortable with tech). Otherwise, I’d first do the marketing to qualify the business even further – get a few leads in perhaps. But with hosting, the setting up is not expensive, nor is it difficult, if you follow the following steps:
- I signed up with HostGator’s Reseller program. When you sign up with Hostgator as a reseller, they give you two awesome things that will further simplify things for you (explained below). So you essentially pay for three things. I got the US$25/month deal. I pay monthly. You can get the Hostgator reseller deal by clicking here
- With HostGator’s Reseller program, you get a free license to the WHMCS software. This is the billing and customer support software. It’s possibly the oldest, most updated, most reliable piece of software out there. WHMCS also has a great community around it with experienced hosting entrepreneurs offering free advice. I have used the community there as well to get answers to my newbie questions (I am momekh there. Hit me up). It has a cost (see WHMCS website) but when I signed up with Hostgator, I got this for free. Which is awesome I think.
- Hostgator gave me a copy of an eBook on – guess what – getting your first 100 customers. I first thought this would be one of those simple write ups and Hostgator just threw this in to make their offer look attractive. The eBook turned out to be quite informative. It’s written by a person who started a hosting business and grew it to above 100 customers! The eBook helped me set up my hosting, helped me with the WHMCS settings and what not. The part about marketing and sales strategy were also quite helpful. Moi was happy.
- Depending on how you want to accept payments (Credit Card, PayPal etc), you may need to jump through a few more hoops. But the eBook tells you what to do. Don’t overthink it, and just follow the advice to set yourself up nice and proper. Tweak and test later if you want to. Right now, get it done with.
What else? You need a website and a domain of your own. But I am hoping you’re at least this far into this to already have that in place.
Obviously, I have simplified this. The eBook (mentioned above) will give great details on how to do pretty much each and every thing from a technical point of view. It even tells you from where to get an international phone line. Nice.
Now you set up the marketing side. Most techies can easily set up a hosting server, fire up the RAID this and Cloud that. Impressive and all. But that’s not a business. A business comes into existence as a result of a sale. That means you need to start marketing your business. Again, simplicity and creativity is key.
- Your offer needs to stand out. But don’t worry too much about it. I offered a hosting package of US$ 147 per year, and apart from unlimited everything that is now the standard, I threw in Google Apps, WordPress installs and yearly maintenance.
- After you’ve set up your offer (try to make one or two offers max. Do not try to offer everything and the kitchen sink – remember you’re NOT HostGator), now you need to HUSTLE. You need to get out and start asking friends and family if they want a website and/or a blog
- You support your customers like that’s the only thing you do.
One week after you’ve started doing this, you should have your first client.
It is this simple. If you didn’t have your first client, you did not try hard enough. Your hustle lacked hustle. Try harder. Get to 10 customers like this.
Make them the happiest customers you can. Then ask them to give you at least two references each. You’ll have 20 leads. Work on them. Hustle. Work. Get out. Meet people. Sell.
That’s how you start and grow a hosting business. You do not have the advertising budget nor do you WANT one at an early stage (see the hosting eBook for a great story by the author on how it’s better to start small EVEN if you have the money to go big).
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This article is part of my efforts to get people to start their businesses. Be self employed. Not to become millionaires, but to live a more wholesome life.
Hosting is one of the businesses that can easily be started to “Test the Waters” and you never know – you never really know – that yours might be the next HostCroc or something.
I wish you all the best.
If you haven’t already, subscribe to LifeETC by Momekh to be creatively self employed to live a more wholesome life.