To begin with, my name is Gareth Hodson and as some of you may or may not know I have been running HostedFX since September 2005. In that time I have gained a lot of experience and believe I have some valuable tips to share with the community. So, without further adieu...
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To state the obvious the hosting business is a hard market to get into. There are bigger, established, more well known companies that make it hard for us small time players to make any impact at all. However, don't be put off...I'll try to share some tips that I hope you'll find helpful.
First of all, I can not stress the importance of planning and preparation before the launch of a web hosting company. It's unlike any other type of site - you have to remember that people will be relying on you for their online presence, and in some cases, businesses.
For the reason mentioned above, hardware is critical. I strongly suggest going for a dedicated right away if you are able to - moving all of your clients from a reseller to a dedicated server in the future is a hassle that you should avoid if possible. Furthermore, a hosting company running on a reseller doesn't look too well expecially when compared to the competition. I'd just like to recommend SurpassHosting who have been nothing less than superb for HostedFX. I have four servers there now, and all have superb uptime, not to mention - the support is phenominal.
Researching - look around, compare prices and features offered by others companies and try to at least match those, if not undercut the competitors a little. This will make marketing that little bit easier for you in the long run - remember people are on a budget and constantly looking for a 'sweeter deal'. Also, I would recommend offering as many plans as you can - I currently only offer 3 plans which I regret a little. I think the more plans you offer, the more likely you are to cater for everyone's needs.
Budgeting - I'll be honest and say that I didn't really budget that much when I started out. I basically raised money for the initial design and software such as the billing panel. Then it's just a matter of making sure you have enough for your monthly server costs.
The only thing I can say about cutting costs is always go for one-time payments as opposed to monthly payments. For example, let's take a look at ClientExec;
- Monthly License: $15.95/month
- Owned License: $125
After roughly 8 months you of monthly payments you will have paid for an owned license - but still be paying the monthly fee. Therefore if you plan to be in the business for a while always go for one time payments. The same goes for server upgrades and such; for example - rather than paying an extra $20/month for a RAM upgrade, pay a one-time fee of $150. It works out a lot better in the long run, and every little helps
Service - good service keeps and gains you customers. This is the secret to HostedFX, we don't offer major promotions; we just rely on solid, reliable, honest service and that's what keeps clients and attarcts more clients. Remember that if your customers are happy, they will happily refer other people to you, so you could say keeping current customers happy is one of the most powerful marketing tools available to you. Once you have a fair few clients, I'd recommend focusing on keeping your own clients as happy as possible and spend a little less time on advertising. Eventually, your company should start growing itself providing everyone is kept happy.
Promotion - to begin with, try forums. Post everywhere you can - get the word out. Eventually people will start talking about you in forums, hopefully for all the good reasons
As a small company, it's not a bad idea to try to offline marketing - this is very powerful for the likes of small local businesses and such. Another nice point is to possibly establish a partnership with a design firm - get them to refer their design clients to you for hosting, and vice versa.That's all I can think of right now, I have to go and get ready but if you'd like any further advice do not hesitate to contact me