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Creating the Perfect Web hosting Company

By Staff

 

Have you ever given any consideration to creating your own web hosting company. It’s not that difficult to do and can be a very lucrative venture. In order to create a web hosting company that will thrive and grow, you must follow three basic principles.

1.      Optimize and accelerate your R.O.I. (return on investment).

2.      Practice fiscal restraint.

3.      Refine operations to improve revenues and profitability.

 

Optimize and accelerate your R.O.I.

In order for a web hosting business to be viable you cannot depend solely on large markets for your operating budget. You need to have the funds available to quickly finance daily operations by having a steady revenue flow and showing profitability. This way you are not indebted to those who finance your venture by paying interest payments. If you are in debt from financing and you are making payback payments, you can’t focus your funds on your operation where they need to be targeted. In addition, when you obtain outside financing, you may have to give up some control of various aspects of your business.

It is highly recommended that you find other sources of funding before searching for outside capital. Use savings accounts, borrow from family or friends, anywhere but from outside investors. The money that you do raise to start-up your business should then be targeted to finance your business. The goal of this financing is to turn a profit as quickly as possible for maintaining the business and for future growth.

Practice fiscal restraint

When you first start-up your web hosting business, capital will be tight at first. It is extremely important to use the funds wisely. Frivolously spending the money on expensive equipment or building an elaborate infrastructure should not even be considered. Start out frugally at first. Get equipment that is adequate to meet your initial needs than expand from there when you have steady cash flow. You don’t want to be equipment rich but cash poor. You will be out of business as quick as you can blink.

Take advantage of lower cost equipment available that is fairly inexpensive but adequate for starting the business. Seek out automated hosting platforms and broadband connectivity that is also inexpensive. Also use a little leverage to your advantage. Consider outsourcing a major part of your business to “top-tier providers to maximize your cost savings and keeps operating costs under control. The savings can be better spent on promoting your business through advertising, marketing and sales efforts.

Because technology is always on the move, it is unwise to put all your eggs in one basket so to speak. Focusing all your resources on infrastructure can be a big problem for your business. The focus needs to be on developing new infrastructure and maintaining it by investing in skilled people to do it for you. You need to remember that you are in business to get results and make a profit. Allocating finds in the right areas at the right times will be key to your business success. In addition, minimizing your financial risk and capital outlay is key to staying financially healthy.

Refine operations to improve revenues and profitability

Continuously improving your business is a major factor in the long-term success of your business. You must constantly tweak aspects of your business in order to keep revenues flowing in and profitability on the rise. Constant evaluation and monitoring of your business are a must so that you can spot problem areas quickly and respond rapidly to find solutions.

The evaluation and monitoring activities will also bring to light other areas of opportunity to generate additional revenue sources. Monitoring and evaluation should be done on the following factors.

1.      Examination of the web hosting web site.

2.      Examination of the advertising traffic coming to the site.

3.      Evaluating how effective the sales plan is.

4.      Streamlining and improving the sales process for maximum profitability.

By constant evaluation and monitoring of these aspects of your business, you can stop problems in their tracks and help your business to grow and thrive for a long time to come.

Your Own Web Site

The Internet is a vast land of web sites. They come in all shapes and sizes, one size does not fit all here. People have their own web sites for various reasons. Some have a single page personal web site for sharing information with friends and family while others who have an Internet business have more elaborate web sites to support the product or service that they are selling.

There are many more however who don’t have a web site on the Internet for various reasons. One being that they think it is expensive to have your own site. This is not necessarily true. You can create a web site yourself for free with the free templates available on the net and then find a relatively inexpensive web host to host your site. This can be done very cheaply.

It may cost a little more if you are planning to start an online business because the requirements are more vital and complex, but business web sites can also be created without breaking the bank. In this case, a web site is vital to selling your product or service, so the need outweighs the expense. The obvious benefits of having a business web site is the opportunity to make money.

There are many benefits to owning your own web site. Personal web sites benefit by having the ability to stay in touch with family and friends and to share information easily. Business web sites on the other hand have a great opportunity to promote products and services to generate a source of revenue and profits.

Here are some few benefits that having your own web site can mean to you.

1.      Business web sites can expand their markets and increase awareness of products and services. They are not restricted to selling locally but rather have a global audience.

2.      Having a web site gives you exposure 24 hours a day, seven days a week, 365 days a year, non-stop. It is the best form of advertising that you can have. You have a wider audience and round the clock viewing capabilities.

3.      You have the freedom to post information or new products on your web site any time of the day or night offering viewers “real-time” information that is current. You can literally interact with anyone at anytime quickly and easily.

4.      More and more people are learning how to “surf the web” on a daily basis to the tune of 55,000 per day. As the Internet grows so does the curiosity for what’s up there. Even the most introverted people are learning about the net and how to navigate around it.

5.      There are many cost advantages to having a business presence on the net. It’s cheaper than renting the traditional brick and mortar storefront to set-up shop and advertising on the net is considerably lower than conventional advertising methods. You can promote your products and services for a fraction of what it would cost in the offline world. Printing, publishing and distribution are also not a consideration adding to the cost savings.

 6.      The Internet is literally a global marketplace and as such it adds greater value to the money spent on Internet advertising and marketing efforts. E-commerce features such as shopping carts or merchant accounts can enhance a business web site and make it easier for people to purchase products and services. In addition, administration expenses are significantly less that you would pay in the outside world.

 7.      Businesses have instant contact with perspective customers via email features reducing the need for phone calls or high phone bills. Web sites can also gain exposure through newsletters or special reports and businesses can even send out promotional materials inexpensively and in a timely manner. This saves on printing and distribution costs as well.

 Whatever the reason for wanting your own personal or business web site, there never was a better time to get one and gain a tremendous presence on the web. Businesses that don’t have a web site are missing out on a tremendous opportunity for growth and cost savings and people in general are missing the opportunity to stay in touch with loved ones and share experiences and information. There never was a better time to take advantage of all the benefits of owning your own web site.


Becoming an ISP (Internet Service Provider)

 There are roughly 6 million small businesses in the US today and roughly half of them do not have an Internet presence or are e-commerce capable. They are still doing business in the brick and mortar world and they are missing out on tremendous opportunities provided by the net.

 Someone has to provide services to these businesses and others in general. Entrepreneurs are springing up all over the place providing various types of Internet services. These services range from web hosting to e-commerce services to data storage capabilities. Internet sales are sparking this new trend because online businesses are generating 65-billion dollars this year alone. Savvy businesses are jumping on the bandwagon by providing necessary Internet services and cashing in on this phenomenon.

 It doesn’t take fancy equipment or a lot of money to become an Internet Service provider. Some creative business people are doing it right from home with little more that a computer and an Internet connection. These Internet Service providers are basically reselling services similar to other types of retail services available.


The way that it works is this, larger ISP’s sell services to entrepreneurs at wholesale cost, they then turn around and sell those services to their own customer base. No special skills or technical expertise are required to become a reseller ISP either.  Take a look at the chart below to get a better idea of the roles of the larger ISP and the reseller ISP.

LARGE ISP

RESELLER ISP

Provides financing

Sells services

Installation

Manages accounts

Support for infrastructure (data center)

Customer Service

High-speed connectivity

Technology consultant

Technical support

 


ISP reselling allows each side to focus on what it is best at. Reseller ISP’s not only can thrive on the Internet but also in local and regional markets where they can provide a one-on-one relationship with customers.

Reseller ISP’s have to be current with the latest technologies available because in essence they act as technology consultants. They need to possess specific knowledge about digital tools that can help businesses benefit from and be able to explain those benefits in detail. Small business owners typically do not have the time to search for the best vendor, the lowest hosting cost or learn of any new and developing technologies. This is where the reseller ISP becomes a valuable aid in helping to meet their needs.

Although cost varies among web hosts, a good reseller plan can be found relatively inexpensively. Cost will basically not be an issue. Even though this is a recurring monthly cost, the fact that there is low overhead allowing for higher profit margins, makes this recurring cost insignificant.

So just how much money can you expect to make as a reseller ISP? Well that depends on several factors.  For one thing, there are a variety of services that a reseller ISP can offer and obviously customers a will not need all the services so you will have to establish a baseline for determining potential revenue. Let’s say that your baseline is $25 per customer x 50 customers, this will give you an approximate monthly income of $1,250 per month. Now you need to deduct expenses, fortunately the only expense you have is to your large ISP. Let’s say that cost is $50 to $150 per month. The balance of the money after expenses are paid is your profit. Considering that you are running the business with little time or effort invested, this is a pretty good revenue flow. In addition, you should always be looking for new business, the more customers you have, obviously the more profit you will make.

Just remember one thing, customer service is key to the success of your ISP business. You can offer the greatest services, hosting plans or latest technology, but if you don’t provide exceptional customer service, it will not much matter and you will lose many customers and be out of business before you know it. When a customer contacts you for help with a problem, rapid response time is critical to keeping the customer satisfied. Make sure to answer emails and return phone calls promptly. Your business will be judges for the support, especially the technical support that you provide and the response time. Implementing customer friendly and responsive mechanisms such as live “round the clock” technical support, toll free numbers, help desks, trouble ticket systems and useful help links are vital to ensuring total customer care.

Each customer’s needs will be different, it is therefore important that the reseller ISP play the role of technology consultant to help them determine the services and solutions to best fit their needs. Some will need to be guided through the process every step of the way, it’s almost like baby sitting them. Your job as consultant will be to help them define their needs and the best possible solution to meet those needs within their budgets. They will be looking to you to help them increase productivity, profits while keeping their costs low.

Another factor to consider in order to become a successful ISP provider is that just because you put a web site up doesn’t necessarily mean people will seek out your services. People will shop around for the best deals, it is therefore important that you offer a variety of affordable services but more importantly to market those services diligently. Your approach to marketing your web site and services are critical to your business. In addition, you need to be involved in the creation of the marketing plan right from the start, leaving this task to someone else will be like sticking your head in the sand.

Recurring revenue will be the key to making any real money as a reseller ISP. If you place your faith on just the products that you provide, then you are setting yourself up for failure. New customers will certainly give your business a boost, but it is the long-term customers that will provide the recurring revenue necessary to keep you in business.  In addition, they can provide additional value to you by way of referrals. If they are satisfied with your services, they will tell others and there is no better or cheaper advertising than “word of mouth” advertising. If you can keep long-term customers satisfied, you will be able to build a steady and consistent stream of income, month after month. If you increase your long-term customer base, additionally you will be able to build a very lucrative business.

 

 
     
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