When you sign up for a web hosting account, you’ll be given a certain amount of disk space. This space holds all the files and data that make up your web site – HTML files, images, video, scripts, audio, etc. Generally, the higher the cost of the hosting plan, the more disk space you will be allotted.

A simple site with just a few basic pages of text doesn’t need much space – likely less than 1MB. As your content increases and you add things like downloads, images, and multimedia content, you’ll need more space.

Email messages also take up space. Incoming messages are stored on your server until you download them (and in some cases even after). If you get a large amount of spam, this can eat up a significant amount of your disk space. It’s a good idea to go through your email on a fairly regular basis and clear out anything you don’t need to keep.

What happens if you exceed your disk space? This depends on your web host’s particular policies but in most cases you are charged for the extra space. These charges can be excessive so you should always be aware of how much space you’re using. If you’re getting close to your limit, it will be cheaper to upgrade before you go over, rather than pay a penalty.

To find out how much space you’re using, you usually just need to log into your hosting control panel. These control panels let you perform all kinds of tasks on your web site and they usually have a section where you can see how much space you’re using and how much is still available.

If your web host doesn’t offer a control panel, you can get a pretty good idea how much space you’re using by downloading your entire site to your computer and checking how much space it uses there.

To give you a rough idea, the average web page with 3 small images and 2 screens worth of text takes about 20Kb. With these types of pages, a hosting plan that gives you 10MB can hold about 500 pages.

Most websites are less than 50 pages, so a 10MB hosting plan is plenty to get started.

If you’re adding multimedia content to your site, your needs will be quite a bit higher. For example, an average 3 minute MP3 file will use about 2.5 to 3MB.

A good rule of thumb if you’re hosting multimedia content is to determine the total size of all the files you will be uploading initially and double that amount. This will give you plenty of room for growth.

Creating a web site is no longer the domain of the uber-geek, hunched over their computer pounding away at the keyboard for hours on end.

Today, building a web site can be as easy as using a word processor but once you’ve created your site, you need to make it available for the world to see. This is where web hosting steps in.

A web host basically “rents” you storage space on their server, and all the necessary services for your site to be available to anyone connected to the net. Technical issues aside, web hosting runs 24×7 so your website is available to view at anytime, from anywhere in the world.

There are thousands of web hosts vying for your business, so choosing the right one can sometimes be confusing. They range in price from free to hundreds of dollars a month. There are many services and features, all of which can be intimidating if you’re not familiar with what it all means.

Why Pay For Hosting?

There are lots of free web hosts on the net, so one of the first questions many people ask is why would you pay for it? The old cliche “You get what you pay for” applies here – free web hosts have some serious limitations.

Most free web hosts add advertisements to your web site. They’re not charging you but they still need to make money. They do this by placing ads on every page on your web site. You have little or no control over what these ads say, and they will detract from your web site.

Free hosts also restrict the type of content you can put on your web site. They usually limit the amount of multimedia like music and video – if it’s allowed at all. You also might not be allowed to sell anything from your website.

Free hosts come and go, so your web site could disappear in the blink of an eye. If the free web host cancels the service or goes out of business, your web site goes with them.

If your website is at all serious, it’s worth paying for a reliable web host. You can find plans as low as $2 a month so they don’t have to be expensive. Be careful when making a choice however – the cost isn’t always the best indication of quality. High priced hosting plans may not always be the best.

In general, the more you pay the more features and services you’ll get. Higher priced plans generally include more disk space, higher bandwidth and other extras like databases, email accounts, autoresponders, and custom scripts.

Domain name registration requires more than just selecting a catchy name for your website. It also involves selecting an “extension” which is the suffix as the end of the domain name.

The most common of these is .com — in fact, it has become a recognized “word” in our everyday vocabulary as a way to express Internet activity – (”I am developing a dot com jewelry business”).

Dot Who?

Some of the other extensions include .biz (for commercial web sites), .org (for non-commercial organisations), .net (for organisations involved in Internet infrastructure) and .name (for personal names).

Dot What?

There are also extensions with more specialized uses such as .museum, .aero, and .coop and are used exclusively by members of certain organizations.

Dot Where?

Besides these common extensions, there are also country code extensions such as .us (United States) or .de (Germany). The rules for using country extensions vary, so you need to check with your domain name registrar to find out if you’ll be permitted to use them.

Only registrars that have been certified by ICANN (Internet Corporation for Assigned Names and Numbers) are authorized to perform domain registration. There are hundreds of certified registrars around the world and the prices they charge to register a domain vary widely.

Although domain registrars are carefully regulated, they are permitted to offer domain registration and webhosting services via third parties. This explains why most web hosting companies provide domain web hosting even if they are not a certified registrars.

Bundled Packages

The price will often be higher when registering a domain through a third party, but not always, as many web hosts offer domain web hosting as an enticement to signing up for one of their web hosting packages.

Use It or Lose It

The minimum period for which a domain name may be registered is one year, although you may register a name for up to 10 years. Longer registration periods usually are accompanied by slightly lower prices.

So if you intend to be on the web for a long time you can save some money, and avoid the need to reregister every year, by selecting a longer registration period.

Most domain registrars also offer a discount on bulk name purchases so, if you own multiple domains you may also reduce costs by transferring all to one registrar and save on the cost of domain name registration.

People start a Hosting business for various reasons. Some treat it as a second source of income. Some prefer it as a Run from home type of job. Some choose it for its reasonably low startup costs.

There are some reasons though, why you shouldn’t get into the Hosting business. Do not come into this business if you want a stress free life. Someone’s site going down is certainly not a piece of cake, especially when the customer is on the phone with you. This business is stressful, if you are a small business or if you have a million dollar hosting business. Web Hosts who have grown big are still stressed out, even if they have employees to take care of things.

Do not come into this business if you have strict time restrictions. This is a 24/7 business. Be prepared to sacrifice your social life if need be. Customers have problems at all times. Servers can go down anytime. Hackers are working on cracking your servers overtime. A Web Host doesn’t sleep easy.

Do not come into this business with visions of making big money in no time. A frighteningly large percentage of Web Hosts go bust or become dormant because they haven’t gotten their Return on Investment (ROI). Many are those who have underestimated the cost or overestimated the ROI. These Web Hosts quietly fold their businesses and suffer the losses. If money is your motivation, then prepare to be demotivated. Money doesn’t come easy in this business and requires a lot of work to get a decent amount.

What should you bring to the table

Ideally a new entrepreneur would bring in some Business experience to the table. If you have run some sort of Technical business such as computer sales, ISP, website design or E-business, it can give you a good start, because you would already know about how to run a Company in your area, accounts, taxes and legalities. If you have every owned a Website and have managed it, that would be pretty useful. If you have been working in a 9-5 job, you may want to brush up on Business basics, before you go further. This link can help you get started http://www.bankrate.com/

Technical knowledge would be a must. The hosting industry is filled with 14 year olds running their hosting companies quite successfully. What they have primarily is Technical knowledge. You should have preferably installed and studied about Linux and Windows. You should have some understanding of the various technical components of a Internet server and control panel software. If you have an idea of HTML and some scripting, it would be very useful.

It goes without saying that you should be a avid Internet surfer and be comfortable with running your business in front of your computer. A stable broadband connection is also needed for you to be online full time.

Choosing your Server

The real estate of the Web Hosting business lies in the servers you lease or own. Space on your server is what you sell. For example if your server has 50G of Disk space, discounting the Operating system and Control panel software, you can resell maybe 30G of it.

When you start your business, you need to get a Server so that you can host websites on it. Many newbies get confused here. Should they lease a server, should they go Colo, or should they start as a basic Reseller.

Your choices centre around Co location hosting (where you put your server in a data-center. The data-center provides bandwidth and physical space.), Dedicated server (lease a managed server from the Data-center) and Reseller hosting ( A reseller is a middle-man who sells web space on somebody else’s server. The most common form of reselling is something like this – Say the actual price of a hosting account is $10, the reseller gets it at $5, and can resell at whatever prices he wants. )

If you are starting on a budget, and have lesser than best Technical knowledge, you would be best taking on Reseller hosting. Its cheap, starting on an investment of under $100 for a reseller account. You would be managing the front end technical support of your clients, but will be spared the high end technical administration of your server. On the flip side though, you have no real control of your and your clients websites. Should the server go down, all you can do is tell your Web Host and patiently wait, all the while fielding calls from your clients.

Once you cross around 100 domains, you could graduate to Dedicated servers or Colo. In case you are getting into Web Hosting big time, it would be advisable to always buy a Web Hosting business. You get a ready clientele and can be spared initial hiccups. The going rate for a web hosting business is generally 1x to 2x times revenue. Make sure to check that the customers are happy, that they are all on monthly or quarterly plans, there is competent technical support in place and the servers are stable.

Remember your entire business plan is based on the Disk space and bandwidth that you are selling. No matter what server you are purchasing, remember a server can hold up to 300-500 accounts. This is the ideal figure. DO NOT base your business model on the premise that you can squeeze in 1000s of accounts into one server. Keep aside about 10% of your disk space and bandwidth for emergencies. The equation for disk space works like this

Saleable disk space = Total server space – 10% free space – Space for Operating system and software

Choosing Software

You need Control panel software, Billing software and Helpdesk software.

Control Panel software helps automate several Administration tasks. A large number of WebHosts use control panel software and customers expect to have a Client side control panel by default. Control panels available are Plesk, cPanel.net, Hsphere.com, Ensim.com and more. http://www.bobcares.com/ has a Cost and Features Comparison available to help you choose. Anyway, expect to spend $500-600 a year per server on your control panel. Of course, if you are a reseller, this cost is borne by your Hosting provider.

Some control panels, do not come with a good Billing software . If so you need to buy or lease Billing software. ModernBill and Ubersmith are some well known Billing softwares which can be integrated with popular control panels.

You may need Helpdesk software if your control panel doesn’t have them. Cerberus, Kayako, Ubersmith and Perldesk are some good Helpdesk software. Helpdesk software help you track and solve issues that your customers send.

Technical support and maintenance

Once you start your Web Hosting biz, you will get customers calling with complaints like “my email is not working”, “the website has gone down” or Requests for help like “How do I get my PHP script up and running”, “How do I use Frontpage and ftp to upload my website”. The kind of questions you can expect to get can range from the absurd to the most complex.

Make no mistake about this. If you don’t know Internet server troubleshooting and Linux/Windows in detail, DO NOT go about playing on the server. It can cause unacceptable Service downtime and worse.. Loss of Precious Customer data. Many Web host owners learn tech skills on their servers and customers(This is a scary thought). Such people actually play with the trust that their customers place on them.

If you are not a trained and Experienced Sysadmin, you can either hire local Sysadmins to help you, or you can outsource at a relatively cheaper cost to Outsourced Tech support companies like Bobcares.com. These companies have trained Engineers (Bachelors in Computer Science) who will take 10 mins to do something an untrained person may take over an hour.

24/7 Technical support with average response times of 1 hour or less is the expected Industry standard. In the dog eat dog world of Web Hosting, the only way you can differentiate yourself is through your customer support. If you choose to Outsource your support, take a good long look at the Testimonials and Plans of the provider. Cost shouldn’t be the only criteria when you choose to outsource. To save a few dollars, you may push your unsuspecting customers into Tech support nightmare. To check for Quality, look for company certifications like the ISO 9001:2000 standard which ensure that you get what you are told.

Credit card charges

If your clientele is global, expect to get paid via Credit cards online. Web Hosting providers generally use 3rdparty Payment Gateways like WorldPay.com, Authorize.net, Paypal.com and 2Checkout.com to accept credit cards. These Gateways provide an interface for your customers to securely enter the credit card information. In many cases, as a merchant, you won’t even see the credit card numbers, which makes it safer.

If you are a US business, your credit card fees should be around 2-3% of your transaction volumes plus a per sale value(like $0.50 cents a transaction). Some have monthly fees as well. International business will typically face a higher transaction value of around 5%-6%. However as your volumes go up, the rates come down.

Marketing your website

Once you put up your site, you need to effectively market it, if you need to be seen anywhere above the millions of hosts who are already out there.

Submit your site to dmoz.org, Yahoo and hundreds of Hosting directories like www.websitehostdirectory.com , hostreview.com, thewhir.com (there are many more).

If your site is the same every time google comes to your site, It’s going to crawl it a lot less frequently – because it realizes you don’t update it as often – and there is no need to come a lot. So Make sure your site has a lot of relevant information, a lot of links and information has to be added and changed at least once a week. Adding a news section shows that your site is regularly updated.

Another way to promote your website is to use Pay Per click programs like Google ad words and Overture. Hosting is an expensive keyword and expect to pay $2 or more per click.

One interesting method that Web Hosts can inexpensively use is giving away Free Web Hosting to Popular websites in return of them displaying your link on their main page. This is a great way to generate Back links from popular pages, and is an easy way to push you up the Google ranks. Popular websites rarely pay for their Hosting charges, because Web Hosts line up to sponsor hosting for them.

If your client base is local, you could give away free hosting to locally popular institutions like Churches or schools.