Do you know how to start a web hosting business? If yes, here is a complete guide to starting a web server hosting business with no money and no experience.
Okay, we’ve provided you an in-depth sample web server hosting business plan template. We also take it further by analyzing and crafting a sample web server hosting marketing plan supported by actionable guerilla marketing ideas for web server hosting companies. In this article, we will consider all the requirements for starting a web server hosting business. So please put on your entrepreneur hat, and let’s proceed.
Why start a web server hosting company?
One good thing about the information age is that several business opportunities come with it, and one of them is server hosting or web hosting, as it is popularly known. Server hosting companies provide space on an owned or leased server for customer use and offer Internet connectivity, usually in a data center.
If you are willing and have the startup capital and are also looking to start a business in the IT industry, one of your best options is to create a webserver / hosting company. There is a vast global market for web hosting companies.
All you need to do to attract customers and maximize profits as a newbie in this industry is make sure your business is well-publicized, minimize downtime, and keep your rates affordable. To accomplish all of the above, you need to be ready to work hard and smart, hire dedicated and competent employees, and most of all, have a reliable server.
A server/web hosting business is a lucrative business because people, businesses, and the government all need server hosting companies. However, to start this type of business, you will need to have technical skills to secure your server.
Due to this business’s technical nature and the need to understand what you will be involved in from the commercial aspect, it would be advisable to consult a retail consultant in the area where you intend to start the business. It is to allow the business consultant to review your business concept and advise you whether to continue the business or not. If your business concept is excellent, the business consultant will offer tips and advice on how forward that will help you throughout your business.
Therefore, if you have done the required feasibility studies and market research, you may want to venture into this business.
Starting a Web Server Hosting Company: A Complete Guide
• Industry overview
It is known that the server hosting services industry is here to stay, and, of course, it is an industry that performs vital functions in the business world and in almost every aspect of what happens in our world.
It is so because there is hardly a severely minded company or organization or even an individual that does not have an online presence on their website.
The server hosting services industry provides Internet hosting services to third-party service providers. These services generally take the form of website hosting, where industry operators provide leased server space and Internet connectivity to individuals and organizations to make their websites accessible over the Internet. Players in this industry also provide application-specific services such as email application hosting and game hosting etc.
Research by IBISWorld shows that the industry demand for server hosting services has grown substantially in the last five years due to high demand from companies hoping to expand their activities and online presence. This trend is expected to continue to grow. Most of the employees, managers, and business owners in the server hosting services industry have worked in complementary information technology industries.
The server hosting services industry is, in fact, a vast and quite active sector in all parts of the world. Statistics say that in the United States of America alone, there are about 18,573 registered and licensed website hosting companies responsible for employing about 139,069, and the industry raises about $ 20 billion annually. The industry is projected to grow at a rate of 7.1 percent annually between 2012 and 2017. The companies with the best market shares available in this industry are Endurance Int’l, Godaddy.com, and Web.com.
The fact that server hosting companies are easily found in the United States of America and cyberspace does not make the industry too saturated. Some people and organizations always need hosting server companies from time to time to host their websites, making the business more and more green.
Some of the factors that encourage entrepreneurs to start their server hosting businesses could be that the company is very prosperous and profitable and can be created anywhere in the world.
Like any other related service, server hosting services are continually evolving. Technologies are rapidly changing and improving, and as a result, the technological limits of hosting are being pushed to meet ever-changing demand. It creates opportunities for consumers to look for the cheapest hosting offer or the most flexible hosting model and think about the type of business models they want to support and whether or not they need specific features in their packages.
Lastly, customers are also getting more thoughtful about potential cloud-related security issues. As a result, server hosting companies are developing more robust communications on this topic in copy, collateral, training, and others for their sales and marketing teams. The need to combat malware and abuse is a significant issue affecting all website hosting companies, not just cloud hosts. Continual investments and upgrades in this area continue to be a considerable concern for hosting server companies.
Starting a web server hosting company: market research and feasibility studies
Starting a web server hosting company: market research and feasibility studies
• Demographics and psychographics
The demographic and psychographic makeup of those requiring server hosting companies’ services encompasses individuals, corporate organizations, government agencies, investors, and business owners with entrepreneurs who own websites/servers.
So if you are looking to define your server hosting company’s demographics, you need to make everything global. Should include corporate organizations, business owners, research centers, institutions, banks, military establishments, front-line companies, businessmen and women, startups, entrepreneurs, aspiring entrepreneurs, and telecommunications companies within and outside the city operating that The ability to pay for your services.
List of niche ideas within the webserver hosting business that you can specialize in
Most server hosting companies tend to operate general services involving all the business activities that a standard server hosting company is expected to offer. So it seems that there are no niche areas in the industry. But on the other hand, some server hosting companies may decide to specialize in some key areas such as;
• Dedicated website hosting
• Cloud hosting
• Shared hosting
• Application-specific hosting (wordpress hosting)
• Provides website building, security, and value-added features.
The level of competition in the hosting server industry
Regardless of which business line you decide to store your store in, you will still compete with others in the same business line, and the server hosting business is not an exemption. The level of competition in the server hosting industry largely depends on your expertise and how large and organized your server hosting company is.
As more big players like Amazon and others enter the server hosting services industry, it becomes crucial for small server hosting companies to have strong partnerships. Affiliate-reseller relationships are becoming a mainstay of how these businesses benefit. Several small and medium-sized server hosting companies are bundled for the specific service packages needed by small business users and companies online.
The truth is that no matter the level of competition in an industry if you have done your due diligence and branding and promoting your products or services properly, you will continually advance in the industry. Just make sure you have what it takes to offer the right solution to individuals and organizations’ server hosting concerns and know how to reach your target market.
List of well-known brands in the webserver hosting industry
In all industries, there are always brands that perform better or are considered better by customers and the general public than others. Some of these brands have been in the industry for a long time and are known for it, while others are better known for how they conduct their business and the results they have achieved over the years.
These are some of the leading server hosting companies in the United States of America and also in the world;
• International resistance
• Go daddy
• Blue host
• Inmotion hosting
• Fat cow
• Rack space
• Soft coat
• Peer-to-peer hosting
• Blue windows
• Excellent Internet
When it comes to starting a business as a server hosting company, you have to get your feasibility studies and market research right before you venture into business. It is good to mention that the server hosting business is not for newbies; It is for professionals who have gathered the experience and knowledge necessary to offer solutions to server hosting concerns.
Starting this type of business involves acquiring the required degree and professional certifications and building a good working relationship with stakeholders in the industry. If you are already a significant player in the IT services industry before venturing into starting your own server hosting business, then this might not be an issue.
Depending on the scale you want to start on, you may need up to thousands of dollars to eliminate this, and at the same time, you may need a lot less if you choose to start the business on a small scale. Offering limited services.
You are expected to engage the experts’ services to assist you with a comprehensive cost and economic analysis of the business within the location where you intend to launch the business. If you get your financial and cost accounting just before you start the company, you may not have to linger long before you break even.
Starting your server hosting business from scratch vs. buying a franchise
Unfortunately, you can hardly find a server hosting company franchise to buy, which means that if you want to have a server hosting company, you have to be ready to start from scratch. The business is still quite green, and there are many opportunities available to aspiring entrepreneurs interested in the industry.
The truth is, it will pay you to start your server hosting business from scratch. Starting from scratch will allow you to conduct in-depth market research and feasibility studies before choosing a niche to specialize in.
Keep in mind that most of the large and successful server hosting companies started from scratch and built a strong business brand. It takes dedication, hard work, and determination to achieve business success. Of course, you can make your own server hosting company become a successful brand with clients from all over the country and from other countries around the world.
Possible Threats and Challenges You Will Face When Starting a Server Hosting Business
If you decide to start your own server hosting business today, one of the main challenges you will likely face is the presence of well-established server hosting companies within your market space. The only way to avoid this challenge is to create your market.
There is almost nothing you can do about these threats other than being optimistic that things will continue to work out for your good.
Starting a web server hosting company – legal matters
• The best legal entity to use for this type of business
You have the option of choosing a general partnership or a limited liability company for your server hosting business. Typically the general partnership should have been the ideal business structure for a small-scale server hosting company, especially if you start with moderate starting capital.
But if you intend to grow the business and have clients from all over the United States of America and other countries worldwide, then choosing a general partnership is not an option for you. Limited liability company, LLC will reduce it for you.
Setting up an LLC protects you from personal liability. If something goes wrong with the business, only the money you invested in the limited liability company will be at risk. Not so for general associations. Limited liability companies are more straightforward and more flexible to operate, and you don’t need a board of directors, shareholders meetings, and other administrative formalities.
These are some of the factors to consider before choosing a legal entity for your server hosting company; limitation of personal liability, ease of transfer, admission of new owners, investor expectations, and, of course, taxes.
If you take the time to critically study the various legal entities you will use for your server hosting business, you will accept that a limited liability company, An LLC, is the most suitable. You can start this type of business as a limited liability company (LLC) and in the future convert it to a ‘c’ corporation or an ‘s’ corporation, especially when you plan to go public.
Catchy business name ideas suitable for a server hosting company
When it comes to choosing a name for a business, you are expected to be creative because whatever name you choose for your business will go a long way towards creating a perception of what the company stands for. It is generally the norm for people to follow the industry trend from which they intend to operate when naming their business.
If you are considering starting your own server hosting company, here are some attractive names to choose from;
• Xtrip server hosting company
• Gconnect server hosting company
• Server hosting company com
• Diamond base server hosting company
• Top cloud server hosting company
• Octopus link server hosting company
• Hydra cloud server hosting company
• Qwerty server hosting company
In the United States of America and most countries globally, you cannot operate a business without having some of the basic coverage of the insurance policy required by the industry from which you wish to work. Therefore, it is imperative to create a budget for insurance policy coverages and perhaps consult an insurance broker for guidance in choosing the best and most
appropriate insurance policies for your server hosting company.
These are some of the primary insurance policy coverages that you should consider purchasing if you want to start your own server hosting business in the United States of America;
• General insurance
• Risk insurance
• Financial reinsurance
• Health insurance
• Liability insurance
• Workers compensation
• Overhead disability insurance
• Business owner’s insurance policy
• Payment protection insurance
Intellectual property / trademark protection
If you are considering starting your own server hosting business, you should generally apply for intellectual property protection/trademark. This is so because the business’s nature allows you to challenge organizations and individuals in court for illegal use of your company’s intellectual property.
Suppose you want to protect your company logo and other documents or software unique to you or even jingles and media production concepts. In that case, you can apply for intellectual property protection.
Is professional certification required to run a web server hosting company?
The result also produces server hosting services for its clients; professional certification is one of the main reasons why some server hosting companies stand out. If you want to impact the financial consulting services industry, you must work towards acquiring all the necessary certifications in your area of expertise.
We strongly recommend that you seek professional certifications; It will demonstrate your commitment to the business. The certification validates your competence and shows that you are highly skilled, committed to your career, and up to date in the market.
These are some of the certifications you can achieve if you want to run your own server hosting business;
• The iaap certified professional in basic accessibility skills (cpacc)
• Giac certified windows security manager
• Cloudu Certification – Rackspace
• Offensive Wireless Security Professional OSWP
• Ace web specialist
• Gpen – giac penetration tester
• Cisco cybersecurity specialist certification
• Bachelor of ICT-related courses
List of legal documents you need to run a server hosting business
Having the necessary documentation before launching a business in the United States of America cannot be overstated, especially a server hosting business. It is a fact that you cannot successfully run any company in the United States without proper documentation. If you do, it won’t be long before the extended hand of the law catches up with you.
These are some of the essential legal documents that you are expected to have in place if you want to legally run your own server hosting business in the United States of America;
• Certificate of incorporation
• Mysql server support and certified hosting
• SSL certificates
• Federal taxpayer identification
• State permit
• Business license and certification
• Business plan
• Nondisclosure agreement
• Employment agreement (offer letters)
• The operating agreement for LLCs
• Insurance policy
• Consult contractual documents
• Apostille (for those who intend to operate beyond the United States of America)
• Memorandum of understanding (MoU)
Financing your cyber server hosting business
In addition to the required certifications and practical experience, starting a server hosting company can be relatively expensive. Securing a standard office in a good business district, buying computers and Internet servers, outfitting the office, and paying your employees are all part of what will consume a large chunk of your startup capital.
One of the first things to consider is writing a good business plan when it comes to financing a business. Suppose you have a good and workable business plan document. In that case, you may not have to struggle before convincing your bank, investors, and friends to invest in your business or partner with you.
Here are some of the options you can explore when looking for startup capital for your server hosting business;
• Raising money from personal savings and sale of stocks and personal property
• Raise money from investors and business partners
• Sale of shares to interested investors
• Apply for a loan from your bank
• Present your business idea and apply for business grants and seed funding from donor organizations and angel investors
• Source of soft loans from your family and friends
Choosing a suitable location for your web server hosting company
The server hosting business and most Internet based businesses do not necessarily require you to see your clients physically; therefore, you can be located anywhere as most of your business is done over the Internet.
Just because you can operate your hosting server company from home doesn’t mean that location has little influence on a server hosting company’s success.
Therefore, if you are looking for a location for your server hosting company, make sure it is located in your city’s business district / ICT center. This place is visible and easily accessible. Of course, you don’t want to discover this type of business on the city’s outskirts. Your clients should be able to drive and find your office with little or no difficulty.
Starting a Web Server Hosting Company: Technical and Personnel Details
There are few particular technologies or equipment needed to run this type of business; you will need it server, custom cybersecurity software, and custom antivirus, among other unique products developed by its team of programmers and software developers. Also, you will need computers/laptops, Internet facilities, telephone, fax, and office furniture (chairs, tables, and shelves).
When it comes to choosing between renting or leasing office space, the size of the server hosting company you want to build and your entire budget for the business should influence your choice. If you have enough capital to run a standard server hosting company, you should consider the option of leasing a facility for your office.
As for the number of employees you are expected to start the business with, you will need to consider your finances before deciding. On average, you would need a CEO / President (can fill this role), Specialist, Legal Secretary, Human Resources Administrator and Manager, Programmers and Software Developers, Business Developer / Marketing and Sales Executive, Accountant, Executive / Front official customer service desk.
You would need a minimum of 5-10 essential staff members to run a mid-scale effectively but the standard server hosting business. Keep in mind that there will be times when you are expected to do your best to hire experts to help you handle some high-profile clients, especially from large corporations. If you are just starting, you may not have the financial capacity or business structure required to retain all of the professionals expected to work with you.
The service delivery process of server hosting businesses
When clients hire your services or pay to host their server on their platform, they expect their server/website to experience minimal downtime and be fast and efficient. Customers are generally expected to renew their payment after one year or when their subscription expires.
Starting a Web Server Hosting Company: The Marketing Plan
• Marketing ideas and strategies
As a server hosting company, you would have to prove that your server hosting platform is reliable and has minimal downtime before attracting corporate organizations and individuals to host your website on your web hosting platform. So if you have plans to start your own server hosting business, it will help you first build a successful career in the ICT services industry.
Individuals and organizations will only host their websites on their server hosting platform if they know that they will get perfect service and also minimal or no downtime while on their platform.
Therefore, when you are developing your marketing plans and strategies for your server hosting company, be sure to create a compelling personal and company profile. In addition to your qualifications and experience, it is essential to establish in practical terms what you have been able to achieve in the past when it comes to the server hosting industry and the organizations that host their websites on your platform. This will help increase your chances in the market when looking for clients.
Keep in mind that in most cases, when looking for clients from corporate organizations and other institutions, you will be asked to defend your proposal, so you should be pretty good with presentations. These are some of the platforms you can use to market your server hosting business;
• Present your business by sending cover letters along with your brochure to all corporate organizations, web designers, business owners, research centers, institutions, banks, military establishments, front-line companies, businessmen and women, startups, entrepreneurs, aspiring entrepreneurs, and telecommunications companies in and outside the city in which it operates that can pay for their services
• Advertise your business in relevant ICT magazines, radio, and television stations (be available for ICT-related server hosting and talk shows and interactive sessions on television and radio)
• List your business in local directories
• Attend international exhibitions, seminars, and business fairs.
• Create different packages for different categories of clients to work with your budget
• Leverage on the Internet to promote your business
• Join the local chambers of commerce and industries around you to network and market your services and products; you will likely get referrals from such networks
• Enlist the services of marketing executives and business developers to carry out direct marketing.
Strategies to increase the brand awareness of your web hosting company and create your corporate identity
Suppose you are in business and have no deliberate intention of increasing your brand awareness and communicating your corporate identity. In that case, you must be ready to take on whatever society describes as your business. One of the secrets of large corporations is that they are willing to spend fortunes year after year to increase their brand awareness and continue communicating their corporate identity the way they want people to perceive it.
Suppose your intention of starting a server hosting company is to grow the business beyond the city from which you will operate to become a national and international brand. In that case, you must be ready to spend money promoting and advertising your Mark.
When promoting your brand and corporate identity, you should take advantage of print and electronic media and social media (Internet). It is profitable to use the internet and social media platforms to promote your brands, and it is pretty effective and powerful.
Another strategy is to sponsor relevant community-based programs, television and radio shows, advertise your business in relevant magazines and newspapers. Below are the platforms you can leverage to boost your brand and promote and advertise your server hosting business;