Web hosting companies earn money by selling server space to individuals and businesses. While some hosting companies own their own servers, many new hosting ventures begin by renting server space from another provider. This is known as "reseller hosting." Typically, the larger company provides "backend" service that is not visible to the end user, and a reseller hosting business re-brands and sells the available server space.
Create a general business plan for the hosting business.
Decide which market niche the hosting services will fill. For instance, some hosting companies compete by offering basic hosting at very low prices, while others offer website building services or specialized software support. Establish a list of services and prices that will be offered by the company. If many different services will be offered, split them into several different packages and pricing levels.
Determine what technical support options the company will offer.
Around the clock customer support via phone can be attractive to customers, but requires more staff members than basic e-mail technical support. Decide if the reseller hosting business will use in-house tech support personnel or if support from an outside contractor is required instead.
Form a legal business entity for the hosting company.
Choose from a sole proprietorship, limited liability company or corporation. The first option is the easiest to create, while the last two options offer better liability protection. Visit the local Secretary of State or County Clerk’s office to fill out the appropriate forms for the business entity.
Select a backend hosting provider that offers reseller packages.
Check the websites and available packages from several different companies, and find one that meets the needs of the general business plan. Compare the available storage space and bandwidth numbers from different companies. Check to see if the hosting provider will offer technical support to your end users, or if you must provide this directly. New hosting businesses usually start with a small and relatively inexpensive reseller hosting package, and expand to a larger package once the company begins to grow.
Choose a payment processing solution for the new hosting business.
Compare the costs and features of a bank merchant account, and internet-based payment processors.
Verify that the payment service is able to process several different brands of credit cards, and is able to support recurring customer billing for monthly subscribers.
Create an internet presence for the new hosting company.
Register a domain name that is unique and easy to remember. Build a website to be placed on this domain or hire a design service to create the site. Many backend hosting service providers provide customizable site templates for this purpose or offer professional design services. Present the available hosting packages and prices on the site, using the general business plan as a guide.
Market the new hosting business.
Contact local businesses and offer the hosting services for their website; use a discounted trial rate as incentive. Network with local web design companies, freelancers and marketing companies to offer hosting to their clients. Advertise in publications such as newspapers, or using online pay-per-click advertising on search engines such as Google and Yahoo.
Monitor and administer the reseller hosting business to prevent site downtime and keep customers satisfied.
Use the backend hosting control panel to check bandwidth and storage amounts frequently and upgrade to a larger package with the hosting provider if needed. Respond quickly to customer questions or complaints, and consult with the backend hosting provider to solve any technical issues promptly.
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