How to start a domain and web hosting company

Starting your own hosting business is one of those things that seems so simple, you wonder why everyone isn’t doing it. While there is plenty of competition, there is plenty of room to grow. Starting your own hosting business can be cheap, easy, and safe. Since every company, and many individuals, need their own websites, providing hosting services can generate significant returns.

If you are a company that deals with IT infrastructure or web design, adding a hosting service to your existing platform can bring in new revenue and clients to add sustainable growth to your business. A hosting company can bring in new revenue streams and products to offer upcoming clients if you are just getting started.

But why bother starting your own hosting business when your plate is already full and your business is running fine? 

3 Reasons to Start a Hosting Business

Here are some of the best reasons to start offering hosting services to clients:

1. It’s Easy

Really, the web hosting provider is doing most of the legwork. They handle the technical difficulties that scare most people away from the industry, and keep services running smoothly. All you have to do is keep your individual clients happy and provide the right hosting solutions for them and their organization. Once it’s running, most websites tend to keep running without much effort or expertise.

2. Additional Revenue

Starting a hosting business can put extra padding in your pockets without losing your day job or adding unreasonable amounts of work. Aside from the initial setup and registering new clients, you can simply watch your bank account grow. An overhead price that covers your costs and brings in decent cash flow keeps costs and prices straightforward for you and your clients.

3. Great Upsell for Digital Firms

If you already run a digital business, especially web design, then throwing hosting into your package makes your service more “all-inclusive.” This could give you the edge you need over competitors and can make you a bigger and stronger organization. By offering hosting to your clients directly on your own platforms, or without having to manage separate users on separate hosting providers, you simplify things like account management and software solutions that must be installed on client machines.

To top it all off, it’s easier than you think to get started. In fact, you can have your own hosting business up and running after only 5 simple steps.

How to Start Your Hosting Business in Five Easy Steps

how-to-start-hosting-business

1. Find Your Niche

In the web hosting business, competition is fierce. You won’t be able to compete with the giants of the industry (at least not yet), but you can still target a specific niche group and start growing from there.

It’s essential to offer something unique to separate yourself from other companies and make your organization more distinct. That could be an additional service like web design, a competitive or revolutionary pricing plan, or maybe you’ll target a specific community (like webcomics or homemade jewelry stores).

It’s important to separate yourself from the crowd and cater to unfulfilled needs. By finding a great niche, you can offer custom solutions that fulfill their needs and aren’t offered anywhere else.”

Whatever your niche turns out to be, it’s necessary to figure it out first before you get into your hosting business’s nitty-gritty. This will give you the upper hand against competitors and help jump start your business by offering services to a specific industry.

2. Research Competitors

Next, you want to separate yourself even more from other hosting companies within your niche. Ideally, you will want your offering to be so unique that you’ll have no competition… but that’s rare. Even if you’re specializing in your market, you’ll still have more than a few competitors.

Research competitor business models and see what they’re doing that works, and where there’s room for improvement! Analyzing your competitors is the best strategy for discovering ways to outdo them.” 

This will give you an advantage when providing new services, looking for clients, and identifying marketing techniques and product offerings. Because the hosting industry is fiercely competitive, it’s important to gather as much information and data as possible to separate yourself from the crowd.

3. Choose Your Server Type

Assuming you’re reselling server space from a hosting company like Liquid Web, as opposed to building your own server in your garage, you still have a few different options to choose from.

As the name suggests, a dedicated server is a server dedicated to a single client. While the features are extensive, it’s the most expensive type of server. A single machine provides more robust features for larger clients, including the ability to have more security or HIPAA Compliant Hosting.

A dedicated cloud server is a great tool because you don’t have to worry about scaling your server or infrastructure — even with an unexpected spike in traffic, performance remains consistent. While not as expensive as dedicated hosting, dedicated cloud hosting falls somewhere in the mid-range, in terms of pricing.

A Virtual Private Server is a single server (cloud or otherwise) that is partitioned to suit multiple systems. While space is limited, it’s easily the cheapest option, and a good place to start for beginners in the hosting business. This will allow you to host multiple clients on one system to keep costs slow. But features may be more limited than other types of servers.

Cloud Servers, or public cloud hosting, is a highly available and scalable cloud solution that pools resources from across multiple servers using virtualization. This is optimal for websites with unpredictable traffic, fast-growing startups, or small eCommerce portals.

There is no one “best” server type. Instead, you’ll want to choose the one that fits together with your niche and business model.

It’s best to stay away from shared hosting for your infrastructure, as it won’t provide the performance, security, or scalability you will need to grow.

4. Create a Business Model

Now let’s get into the “business” part of the hosting business. You’ll need to fine-tune the details of your niche marketing as well as invent your brand. 

In this stage, you need to finalize plans for the following:

This includes your company name, logo, and tagline. Be aware of which domain names are available since you’ll inevitably need to build a company website. Your name should be memorable and easy to find.

Pricing Plan

Hammer out the details of your pricing plans to find that sweet spot between how much the hosting infrastructure costs you, and how much your clients are willing to pay for your services. This can also play into your niche marketing if you’re trying to undercut the cost of your competitors.

As with all digital industries, your web hosting company’s website is it’s the main storefront, so spare no expense in making it top notch. The quality of your website can reflect the quality of your services, so make strides to make it the best it can be.

5. Launch Customer Service and Support

Customer service and support is optional in theory, but in reality, it’s so important that it’s practically a necessity. Consider handling customer service and support as part of your hosting business.

In the web hosting business, part of your appeal to potential clients is that they don’t need to worry about the technical concerns. Even for hardware engineers, these tidbits can get frustrating, so you can imagine the anxiety it causes laypeople. Clients rely on you to keep their websites and services up and running without a hitch. 

If you aren’t able to provide this level of customer satisfaction, clients may choose to host their websites somewhere else.

Customer service should be a top priority for your new hosting business. That’s why we here at Liquid Web invest so much into our Support Team so they can be the Most Helpful Humans in Hosting. Our customer support is what endears us to our clients and keeps them loyal. 

Features like our 59 Second Guarantee and 24/7 access not only set us apart from our competitors but also turn what could be a negative customer experience into one of our company’s greatest strengths. 

When you are hosting your infrastructure with us, your clients gain the benefits of our support programs, and it can take some of the load off your back in the process!

You’re Ready to Resell Hosting

Now that you know the 5 steps for forming your own hosting company, you can get started today! You have found your niche and researched competition, selected servers, and defined pricing plans, and understand the need for customer service, so you can start reselling web hosting.

Start Reselling Hosting Today

Liquid Web has a Reseller Program that is a perfect fit for those looking to resell hosting. Or download our Hosting Buyer’s Guide to learn more about your hosting options.

Products mentioned

Reseller Hosting Everything you need to get started

Archive Product Disclaimer

The GoDaddy product information in this article is outdated and currently under review for accuracy. For the latest up-to-date product information please visit godaddy.com

If you’ve been tossing about the idea of starting your own web hosting company, there are several things to think through to set yourself up for success.

Today, consumers have a ton of hosting companies to choose from, so deciding on your business strategy and finding an under-served market is the key to creating a sustainable and profitable business model.

Define your goals

Step one to creating a profitable business model is to clearly define your goals and what’s needed to achieve them.

Are you looking to build a large hosting company with thousands of customers or simply make extra money with your existing clients with a recurring revenue stream? Do you want this business to become your full-time income or part-time supplemental income?

Carve out a niche

Once you’ve clearly defined your business goals, the next step is critical. How will you differentiate your business from thousands of other hosting businesses? This is where you need to do your homework. If you’re starting with an existing business where you already provide services like web design and development, digital marketing, branding or IT services to small business, then you’ve got a solid place to start. Do some research on how others are positioning their businesses, what can you offer that others don’t? You’ll want to find a gap in the market that you can fill that creates enough opportunity to reach your business goals

A simple approach would be to resell hosting to your existing clients so that you get a piece the hosting revenue pie. There are multiple ways to resell hosting from affiliate partnerships with hosting companies or transfer your clients’ sites to your own hosting account and bill them separately. (But this article is about starting a hosting company which means your goals are probably bigger than this scenario.)

Based on your skill set (or skill you’re willing to educate yourself to become an expert), are there markets that make more sense to easily get started in? For example, if web security is in your wheelhouse, specialize in products and services specifically for industries where security is mandatory. Healthcare, financial services, education, all these markets require strict security governance.

If you’ve been tossing about the idea of starting your own web hosting company, there are several things to think through to set yourself up for success. Today, consumers have a ton of hosting companies to choose from, so deciding on your business strategy and finding an under-served market is the key to creating a sustainable and profitable business model.

Choose a hosting partner

Goals – CHECK! Business model — CHECK! These next steps will describe what you need to build a hosting company including the backend business processes.

Now that you’ve defined your business model, next you need to decide how you’re going to deliver hosting products to your customers. At first glance, it may seem more profitable to purchase and maintain your own servers for resell, but once you dig into everything that goes into developing a secure and reliable server network, you may quickly learn that you spend more time managing servers than you do your customers. In this case, you’ll find that leasing server space from a reputable host provider is the easiest and least time consuming way to go.

When evaluating hosting providers, we recommend you start by partnering with a larger, more established company. There are several advantages to this approach:

  • Reduce Risk. Lower risk that the hosting provider will disappear overnight leaving you and your clients scrambling.
  • Uptime guarantees. Larger companies most likely have heavily invested in their infrastructure around security and redundancy for high availability, along with 24/7 network monitoring.
  • One stop shop. You can more easily round out your products and service offering. Larger companies will also offer domains, email, web security and email marketing solutions—all products and services that you can resell to create more revenue streams.
  • 24/7 expert hosting support. You’ll want to choose a partner that offers support around the clock. Make sure they have a dedicated hosting support department so you can quickly resolve any issues, which you will have from time to time. Every host, no matter how good they are, will have issues on occasion. How they handle issues, is what matters.
  • White Label hosting. If total anonymity is important to your businesses model, then make sure the Host you choose offers 100% white label support. The hostname servers should use a generic domain name, and provide you with an IP address for you to register your own private nameservers.

Establish the backend processes

To run your online business, at a minimum you’ll need to create the following operating mechanisms:

  • Enable purchasing of your products and services which translates into building your branded website with ecommerce capabilities.
  • Facilitate account provisioning around creating, suspending and modifying client accounts.
  • Define and develop billing and payment processes that support your unique business model (e.g., one-time payments, subscription-based, automated renewals).
  • Establish Customer Support model that includes types of support (phone, email, chat, ticketing system), issue in-take process, tracking, escalation.
  • The development of all the customer communication to support each of the processes (e.g., welcome emails, payment reminder, late payment notice, account suspension notice).

If setting up all of this sounds like a lot of effort and very time-consuming, well, you’re not wrong. Fortunately, there are smart people that have figured out what’s needed to efficiently start and manage a Hosting company and have developed tools to automate many of these tedious tasks. If you’re looking for the easiest way to get started, finding a good Reseller Hosting solution is the way to go.

Compare types of Reseller Hosting

The industry term “Reseller Hosting” typically is defined as mechanism to manage your business website, client accounts and billing operations. As you do your research on Reseller Hosting, you’ll find that most large hosting providers offer some sort of solution, it’s important to understand the different types.

A common approach to a Reseller Hosting product is bundle software to manage your business with a shared hosting plan for your business website. The business management software lets you connect the servers that you own and use for hosting your clients’ websites. The popular business management tools are cPanel/WHM and WHMCS

Basic Reseller Hosting

  • Consists of a shared hosting account to run your business website.
  • cPanel/WHM installed to create custom hosting plans for resell.
  • cPanel/WHM has limited capabilities; you’ll still need to setup your own billing, invoicing, customer support, accounting provisioning and customer communications.
  • Purchase and connect a server or additional hosting plans for your client sites (The shared hosting account has limited resources and is meant to host your business site).

Advanced Reseller Hosting

  • In additional to cPanel/WHM, includes tools like WHMCS to automate daily tasks and business operations.
  • Look for Hosting providers that install and manage your WHMCS license for you.
  • Purchase a VPS or dedicated hosting plan to insure great performance for clients’ sites, and carve out custom hosting plans and charge a premium fee.

Look for a reseller hosting product that integrates web hosting automation tools with VPS or dedicated hosting to save you the time and hassle and lets you get straight to building and growing your business. That’s exactly what we did at GoDaddy…

GoDaddy Reseller Hosting has everything you need

Our customers have been asking for a reseller hosting solution, so after talking to and surveying hundreds of customers to identify the most important features, there was one very clear message—WHMCS! It only seemed fitting that GoDaddy, the world’s largest host and domain name provider should partner with WHMCS, the leader in web hosting automation, to create a complete solution to start and efficiently manage your own hosting company.

Our new GoDaddy Reseller Hosting seamlessly integrates with WHMCS to offer fast reliable hosting to resell, as well as automate the operations and daily tasks of running your hosting business from a single dashboard. What users’ love most about WHMCS is the flexibility it enables to run the business your way with full control over pricing, payment options, invoicing, configure hosting plans, provisioning and customer support. Our plans serve up to 250 clients—all white-label ready for your own branding.

Manage your hosting business from a single dashboardManage your hosting business from a single dashboard

Automate time-consuming tasks

  • Quick setup and seamless WHMCS license integration
  • Create custom hosting packages based on fully configurable resources, sold under your brand.
  • Easily create, suspend and modify client accounts.
  • Define your pricing—one time purchase, subscriptions, term discounts and even free trials.
  • Get paid with automated invoicing, payment reminders and service holds for non-payment.
  • Seamless one-click resource upgrades, including migrating the customers content automatically
  • Customer Profiles and reporting on monthly revenue, invoices paid and outstanding.

Resell high-performance hosting to your customers

GoDaddy Reseller Hosting is built on a VPS-based platform which is automatically installed and license is issued and maintained for you. In comparison to cheap shared hosting plans, our platform uses single tenant virtual machines (VMs) with dedicated resources for faster, more secure hosting for your clients’ sites.

  • Built on our VPS-based Web Hosting Plus platform that offers dedicated CPU and RAM for fast speed and isolated resources to keep other sites from negatively affecting performance.
  • Automatically pre-configuring the customer’s VM in WHMCS as a server so it’s ready to use for customers
  • Your customers will get a simple cPanel experience to build and manage their websites.
  • In addition to multiple layers of server-level security, each of our plans include a free SSL Certificate for the life of the hosting plan.

Learn more about NEW GoDaddy Reseller Hosting

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Written by Jane