How do I start a web hosting company?

by Ben Gabler on

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At least 50,000 other people have asked themselves that very same question. They’ve done what you’re about to do, so how hard can it be? I won’t bore you with generic answers; instead, here’s a practical recipe that will get you from dreaming of setting up a hosting company to launching and selling services.

It’s a simple recipe with four components.

You will need:

1 x cPanel & WHM VPS or Server ($250/month)
1 x WHMCS License ($20/month)
1 x Method of Payment
1 x Marketing Website with a domain name

Here’s how to put them together:

cPanel & WHM VPS or Server

You might have heard that it’s best to get a reseller account, but don’t forget that just with shared hosting, you’ll be fighting for resources. I’d suggest getting a cPanel & WHM VPS server, which allows you to automate server management. Some providers will even pre-install cPanel & WHM for you. If you’re not a Linux admin, find a provider who will help you in times of need and be your cPanel & WHM expertise. If you spend $500 per month, you should be able to get something like the following:

Bare metal Dedicated Server, 16-Cores, 32GB of RAM, 500GB SSD x 2, hosted in a great data center with plenty of bandwidth, IP addresses, and support. Shop around, though, and match your skill level with the service they provide. Unmanaged means you’re on your own. Be ready to manage every aspect yourself.

Once you have access to your cPanel & WHM, configure it with your private nameservers, add additional software (such as Softaclous), and define hosting packages (limit). Again, if you are not familiar with this, choosing the right provider is vital. A good managed provider will help you set things up, review your settings, and provide insight on security.

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WHMCS (Web Host Manager Complete Solution)

Don’t get WHMCS confused with cPanel & WHM. While they are similar, they are two completely different pieces of software. WHMCS provides an ordering, billing, and customer service solution that your clients will use to pay and interact with you.

A license will set you back about $20/month, but with it, you’ll be able to do the following:

A.) Have a hosting shopping cart with whois lookup
B.) Sell domains, SSL, and other services
C.) Handle recurring payments & invoices
D.) Automate new account setups, including domain registration
E.) Provide customers with a help desk to ask questions
F.) Integrate with 100s of other providers to offer additional services
G.) Provide a login area for clients to manage everything

WHMCS is a PHP app and a straightforward install; it will also integrate directly with your cPanel & WHM server, meaning that when a client purchases a service from you, it can be automatically provisioned on your cPanel & WHM server.

Method of Payment

If you want to make money, you need a way for clients to pay. There are 100s of merchants out there, but two of the most straightforward options are PayPal and Stripe. You can even handle mail-in payments – there are a bunch of 3rd-party possibilities available, so the sky’s the limit.

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Test, Test, Test

WHMCS and most payment gateways provide test mode functionality. It’s a great idea to enable it and walk through the ordering process multiple times to ensure everything fires off as expected. Imagine how sad it would be to launch, only to find out your customers can’t place an order!

Marketing Website

Before you launch, you need a marketing website to start promoting your new services. Luckily for you, you can find hundreds of templates and themes on sites such as Template Monster & Theme Forest, so you have a good starting base. 

Because you are competing with 50,000 hosting providers, you need to stand out, develop your value proposition, harness the power of packaging, put a unique twist on your service, and go to market. If you get stuck, is always a great place to hang out.

That should give you a base for starting your own web hosting company. Have you ever thought about doing it yourself? Perhaps you already have? Share your thoughts, tips, and challenges below.

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