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How To Start Your Own Web Hosting Business

 Thursday, August 22, 2019

Ready To Start Your Own Web Hosting Business?

First of all, as you can tell going by the date when we posted last; it has been a while since we last updated the HostXNow Blog! Moreover, we are aware that an old Blog can look off-putting to our potential customers (we too can get put off if we go to a business website and see they have made no effort to update their Blog for quite some time), but that by no means anything is wrong with HostXNow.

We have just been so busy providing the very best service possible to all of our clients that we have not had the time to update our Blog page for quite some time. The service we provide is primary and things like updating our Blog, are, of course, secondary.

A Quick and Easy Guide on How to Become a Web Hosting Provider

Hopefully, this guide on How To Start Your Own Web Hosting Business will help make up for the lack of updates on our Blog, especially for those wanting to increase their income.

Is it worth starting a new Web Hosting Business?

Due to the high demand for everyone wanting to have an online presence for their hobby or business nowadays, now is an excellent time to start your own web hosting business! The best part is you do not need a great deal of technical computer knowledge to run a web hosting business these days at least not when using our Reseller Hosting setup.

Many of our competitors started their web hosting business using our Reseller Hosting plans and now run everything themselves. You may question why we help create competition that could potentially decrease the chance of us gaining new sales ourselves, but we have no problem with this because there is enough room for everyone!

Sounds expensive to get it all up and running

Becoming a web hosting business is not that difficult at all, and the startup costs might not be as high as you think them to be.

The main things you need to run a web hosting business is a reliable Reseller hosting account from a reputable hosting provider, a billing & support ticket system so you can bill your customers and offer support to them.

How to accept payments and automate new orders?

Finally, you will need a way to take payments from your clients. Receiving payments is easy when using WHMCS integration which seamlessly works with popular payment gateways such as PayPal and Stripe (Credit/Debit Cards).

Do I need White Label hosting?

It may also be necessary for you to use a provider who offers White Labelled hosting, and what this means, is your customers will not see any branding from the provider you use to resell hosting.

For example, the nameservers you tell your customers to point their domains to would be something like /, and so, therefore, your customers will have no reason to think you are the middlemen (not that this is a bad thing).

I say it is not a bad thing because everyone resells somewhere down the line, e.g., a web hosting company that even owns its hardware uses bandwidth from a data centre.

How to stand out in such a competitive market?

In most cases, it is best to be transparent, but at the same time, you do not have to broadcast to all your customers that you are a Reseller. In any case, it does not matter as long as you offer an excellent service, then that is what counts.

Usually, smaller providers offer far better-personalised support than the more prominent providers do, and this is one of the reasons why a customer would not mind choosing you over a more significant provider who no doubt deals more with quantity over quality.

In other words, the provider does not usually have the time or staff to help people new to hosting who use a lot of admin time. Big providers like that would instead host customers who know what they are doing; that way the provider can spend less time hiring staff to try to cut their costs down, etc.

In short, don’t worry about being a Reseller; 9/10, it is usually only temporary.

How did HostXNow start?

HostXNow started on a Reseller account just over ten years ago and upgraded to VPS Hosting and Managed Dedicated Servers, and so on.

For the last six years or so, we have been leasing all our servers directly from world-class data centres. If we can do it, anyone can do it.

How long does it take to start making a profit?

For us, it took a lot of time, dedication, a little money, and more importantly, patience. How fast you make a profit really depends on your business model i.e. offer unmanaged or managed services, going to lease or own equipment and the funds/backing you have, as that will dictate how much you can spend on advertising and the like.

What is the most important part of starting a new Web Hosting Business?

It is vital to choose a reliable hosting provider, because if you turn it around and you were the customer using this same business setup, and they provided you with poor service, well then you would not be happy too. So it is vital only to set up a web hosting business if you are serious about it.

If you do decide to set up your own web hosting business and resell web hosting you need to choose a reliable and reputable provider because if you get it wrong, it will not be so easy to start back up again at a later date.

If you had a good reputation and sold your business on favourable terms, then it would not be a problem to start up a new brand in the future. So please think about these things before you set up a web hosting business.

Can you give some examples of part of a business model?

Here is some advice on how much disk space to offer and what to price it at to help make a profit.

Do not go too high or too low; try to have realistic specs and pricing, and see the bigger picture.

By that we mean you could have a Reseller account with 5GB disk space and pay around £5/month and think you could only resell 5 x cPanel accounts with 1GB disk space each or 10 x cPanel accounts with 500MB each which you can make a fair bit of profit.

Let’s say you resold 5 x cPanel accounts with 1GB disk space each for £4/month which is £20 in total sales, so if you paid £4 for your reseller account but resold 5 x cPanel accounts then that means you have made a profit of £16/month — not bad!

However, that is not all, because not every customer will use 100% of their disk space which allows you to make even more profit! Also, going one step further, you should not just be limited by the real limit of your Reseller account.

Because not only can you oversell disk space (resell unused disk space), but know that you can always upgrade plans or even services in the future which would allow you to make much more profit. Because the more you speculate, the more you can accumulate (most things are cheaper when buying in bulk, but be careful).

So rather than set pricing for your plans going by the small 5GB disk space, know that as you make a profit, you can increase the storage for your hosting packages when needed.

So rather than resell 5 x cPanel accounts with 1GB disk space each or 10 x cPanel accounts with 500MB each, instead, you go with the idea that you have 100GB disk space (even though you do not have the plan yet) and that would allow you to offer more disk space and maximise profit.

Just know that when first starting out, you are bound to be at a loss for a while, or you may make a little profit if you are lucky when reselling using the first examples I gave.

HostXNow offers 100GB disk space which costs £140/month; you can pay that every month and offer custom specs and disk space, e.g., pay £140/month for 100GB but resell any of the following:

100 x cPanel accounts with 1GB disk space each at £4/month = £400/month and so £400/month – £140/month for the Reseller account = £260/month profit.

50 x cPanel accounts with 2GB disk space each at £10/month = £500/month and so £500/month – £140/month for the Reseller account = £360/month profit.

And even when you do that, again, not every customer will use 100% of their quota, and so you can resell that disk space and make a profit on that too making that £260/month or £360/month go even higher!

Because not every customer will use 100% of their quota, this is why do I think anyone paying more for so-called “unlimited disk space” is a bad idea.

Should I use a plan with Unlimited Diskspace?

Now you are probably thinking “I should choose a provider who offers the most storage for the lowest price possible”, but that would be a BIG mistake. Quality hosting is not cheap.

You don’t want your customers to experience poor service in terms of the hardware/network/software used. It is best to use a provider who uses the very best of everything like HostXNow does to ensure you and your customers receive the best service.

There are a lot of other things that have to be taken into account. But that is the general idea regarding how much disk space to offer and how to price your plans.

What are some other operating costs?

You may need to pay for the support team, pay for additional software, staff, submit information to the government, etc. However, if you are in it for the long haul, then you can make it work.

Which Reseller hosting service and plans would you suggest using?

We would recommend starting with our X1 Fast Reseller Cloud Hosting plan, which allows you to host up to 50 cPanel accounts, includes Unlimited Bandwidth, 25 GB SSD storage and free SSL certificates all for just £35/month! You may upgrade to our X2 or X4 Reseller Hosting plans at any time.

Here we have listed the different software and services we use to offer the following hosting services:

Cloud Hosting

Reseller Hosting

VPS Hosting

Except for SolusVM, which allows our customers to manage their VPS, for our Shared/Reseller hosting services, we make use of all the vendors mentioned on our Technology Partners page.