Image via WikipediaAs this is an area i have been actively involved in for the last seven years i have seen a lot of hosting companies start and fade away in that time. I thought i’d finally
jot down some observations i have made over the years.
Who Are your competitor’s / Understand your market
You need to understand the market that you are entering , you need to research your competitor’s and see what they offer , what they charge and more importantly what is the distinguishing factor between them and your new business.
You need to know the customer base your are targeting or else you cannot compete.
Don’t treat it as a a Hobby
In the ultra competitive market of web hosting you need to dedicate your full time efforts into offering the best services ,features and support. Only checking support tickets in the evening or only adding new services a few months after everyone else will result in slow sign ups rates and high turnover of customers.
If your serious about your hosting company and its growth you need to work at it full time.
Automate Automate Automate
Hosting is a costly business with tight margins and high overhead , in order to maximize your profit you need to reduce the manual workload involved in your systems and empower your customers to have the ability to make any changes they need. You need to provide your customer with the ability to manage every aspect of their account online which will massively reduce the need for manual intervention for simple repetitive tasks.
“Automation” should be the key word for every system and product you look to use or sell.
Research your Data centre
The most important part of your hosting business is the data centre that contains your servers which are your business , if your data centre goes down your business goes down. Always meet your data centre partner face to face and tour their facilities , ask to see their UPS , their back-up generator , what back-ups they offer , have redundant their network is , what disaster recovery procedure they have in place , what SLA’s they can offer you. What solutions they offer for off site replication. Look at a few and then decide , don’t always go for the cheapest as the loss of your servers will end up being more costly in the long run.
Money
If you are committed to setting up a hosting company and working are it full time , financials become the be all and end all of your business. Sit down and make out a realistic business plan , just because your business is online does not make it any less of a business than a hotel or shop. You need a business plan to act as guidance and provide a blueprint for where your business is going and how its going to get there.
Make realistic projections in terms of turnover and profit. Invest in your core system and in customer service as this is where the word of mouth will come from , investing in fancy add-ons or services your not sure will sell can wait until your established in the market and have capital in which to do it. Most importantly if the figures don’t add up , walk away.
Marketing
Now that you have everything in place is a matter of getting your name out there.Adding a blog to your site is the cheapest and one of the best ways of advertising what you do but more importantly , putting a face to your company. People want to know who they are doing business with and what your background is. Print advertising targeting specific IT magazines , Google adwords , monthly newsletters , posting on public forums , attending conferences and industry events all can help reinforce your brand name in the public consciousness.
If i can think of anymore i will add them later , or feel free to add.

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