This guide will fully explain how to start your own hosting company, what you need to start, and the amount of funding you should expect to use to be successful. Becoming a hosting provider is tough, so make sure you’re ready to put in the effort it requires.
A hosting company works by taking on clients and providing them hosting for their website(s). To do this, you need to have access to powerful servers. If you don’t have hundreds of dollars to spend each year, the best way is to become a “Reseller”. Resellers utilize Reseller Servers with an established hosting company to provide hosting to clients.
A Reseller Server (or Account) gives you access to the tools needed to create additional accounts (1+ per client), and manage them. You can also manage payment plans, and additional features.
The most common “panel” that you are giving customers is cPanel. cPanel is an interface that allows clients to add/remove features with ease, and edit their website. If you’ve ever had any type of website, there’s a high chance you’ve used cPanel. There are other panels available, such as Kloxo CP (live demo).
Picking a good hosting company can be tough, as some providers are great with certain types of hosting, but not others. The ideal hosting provider, for Reseller Accounts, is one that gives you a good amount of cPanel licenses (to give on to customers), disk space, bandwidth and “overselling enabled”.
Overselling works like this. Let’s say you have 10 apples. Overselling allows you to say “I’ll let you eat 20 apples for $5”, even though you only have 10. You’re taking a personal bet that the buyer will not eat more than 10. Overselling, in hosting, allows you to sell more than you actually have.
So, if your Reseller Account is allocated 500GB of Disk Space (similar to how your computer has disk space), you could offer an account to a client that has 650GB of Disk Space. Without overselling enabled, getting clients can be tough. Many clients these days want “unlimited” bandwidth and disk space.
Another feature that is key to being a reseller is WHMCS (live demo). Now, it’s not the only option, but it makes managing clients very easy. You can add clients, delete them, edit their information, and manage hosting plans that you have available. You can also set it up to auto-accept & create hosting accounts when customers pay on your website.
There are other aspects you should look for. You’ll want to see if your hosting company (that provides the Reseller) offers support to your clients, or if you yourself need to provide that. You should also check to see what penalties there are if one of your clients breaks the rules, or overuses resources.
Using a VPS, as a Hosting Company
A VPS, or Virtual Private Server, is a part of a Dedicated Server. Basically, it gives you much more resources than a Reseller Account would give you. You’ll be able to allocate more resources to your clients, and your server can handle more processes (making things faster and more efficient).
One thing to note is that managing a VPS can become tricky if you’ve never done it. This is especially true if you are using a Linux VPS and have never used Linux in the past. Some hosting companies though offer support, Windows VPS, and control panels. If you’ve never had a VPS, I recommend checking out some demos or even a trial account before spending any money. At best, you’ll learn fast. On the other hand, you might discover that a VPS is NOT for you.
Before renting a VPS from a hosting company, check out the features list. Here are some aspects that will play a role in your service’s performance.
- RAM (the more the better, but you don’t need “too much”)
- CPU (make sure it’s more modern than old)
- Disk Space
- Bandwidth / port speed
- Number of Dedicated IP Addresses
- Where it’s located (around the world, or near you?)
- Managed vs Unmanaged options
Here’s a bunch of VPS options that you could rent for affordable prices.
Starting a Hosting Company, with a Dedicated Server
I will be completely honest. If you have not started your hosting company, and don’t expect to have dozens (or hundreds) of clients soon, you do not need a Dedicated Server.
Dedicated Servers can be even harder to manage than a VPS are significantly more expensive. Choosing a good Dedicated Server is complicated enough to justify having an entirely new article about it. For that reason, I don’t think it’s wise to include much information about them in this specific article.
That said, Dedicated Servers are great for hosting companies that have been around for a while and need the power for their clients. These can be costly, so don’t start off with one (unless you have money you’re willing to lose for a few months).
Disclosure: I work for Nuovawebs, a hosting company, which is linked twice in this article (VPS Options & Reseller Servers).