How to Start a Web Hosting Business in 2023
There are no “get rich quick” businesses. AI isn’t going to make you rich (on it’s own).
I get it, you want to make some extra money and you’ve heard that web hosting could be something that’s relatively low effort. I start off this way because if you think I’m about to lay out how to make millions, I’m not. At all. With that in mind, here’s how a reseller web hosting business can be started in 2023.
If you already know how to use a computer and the Internet, then a reseller hosting business may be the perfect thing for you to try.
If you’re successful or not will boil down to your ability to find customers. Plain and simple.
- Difficulty: 5/10
- Potential: 7/10
- Cost to Start: 2/10
- Time Required: 3/10
Why Start a Web Hosting Business?
If you’re into tech, the internet, servers, etc., this is the business for you to start. Web hosting is something anyone that wants a website needs. If you know people with a business or have entrepreneurial friends/family, you can start this business and begin selling them web hosting services.
Web hosting is not web design. You don’t have to design the websites in order to host them. Something to discuss in another article is how to market your web hosting business and partnering with a web design agency is one key method to growing this particular business.
Photo by Burst on Pexels.com
But I still haven’t answered the question: why should you start this business?
The answer is simple.
- You don’t need to be a tech “guru” to start this business. You need basic computer skills and the ability to learn a few things about how the internet works.
- The barrier to entry is extremely low in terms of both time and money needed.
- Once setup, you’ll earn recurring income each month. Customers will pay monthly or yearly renewals in order to keep their website hosting active.
- Once a customer is onboarded, you’ll typically not have to offer much support. This varies depending on who you target, but in my experience I spend less than 1 hour per month answering inquiries. You will need to spend several hours setting things up and marketing.
I Don’t Have Any Technical Skills…
You don’t need any technical skills to sell reseller hosting.
The key there is reseller. Of course, I’ll share with you some ways in which you can expand the business by offering more technical services, but to get started, you don’t need technical skills.
Nothing is more appealing than the idea of becoming your own boss, which is why so many new resellers decide to jump into the reseller web hosting business. That’s not to say it’s easy, or that you’ll make money right away. It takes plenty of time and patience, and you’ll need to be willing to learn as you go.
If you’re still interested, here is the guide to help you get started. A good place to start is to learn everything you can about the technical aspects of reseller hosting. Even if you only plan on marketing your hosting company’s services to your friends and family, you’ll need to learn all the ins and outs of the business to be able to answer questions and help you customers.
We’ll cover as much as we can in this mega guide. Combined with the others posts on our site, you’ll have enough info to start a reseller hosting business and start getting customers.
What is Reseller Web Hosting?
The basic idea of reseller web hosting is that you purchase server space from an already established web hosting company, and resell those services to your customers.
The benefit of reseller hosting is that you don’t need to focus on all the technical aspects of managing servers, dealing with server hardware, data centers, network issues, etc. You focus on selling web hosting while the business you’re buying from focuses on maintaining the infrastructure.
Before you continue: Understand that for many people, the end game of this business is to keep making money as a reseller. For others, they eventually move on from resellers and start purchasing their own servers, server admins, support team, etc.
Reseller hosting is an affordable way to get into the web hosting business without taking on much risk. You can find a quality reseller hosting plan for around $15/month paid monthly.
This means that if you realize the business won’t work out for you, or you find you’re not really interested in building this business, the most you’ll be out is ~$100 for a few months of hosting, a domain, and maybe some other requirements. That’s part of the reason this business model is very attractive.
5 Steps to Starting a Reseller Web Hosting Business
To keep things as simple as possible, I’m breaking this down into 5 simple steps. Some steps will be easier than others depending on your experience, but if you follow the steps, by the end you’ll have something setup and ready to sell.
Keep in mind, I’m guiding you through “starting” this business. After you get a few customers, find a target market to go after, etc. you’ll want to automate many tasks such as an automated ordering system. It’s my personal recommendation that you don’t focus on setting up automated systems until you have proven that you can build this into a profitible business.
Many established hosting providers will try to sell you a license to WHMCS, an automated billing platform for web hosting companies, at an additional cost. This would be a waste of money if you don’t already have paying customers or people regularly signing up for your services.
This leads us into the first and most important step…
Step 1 Form a Business Plan
The first thing you’ll want to do when considering any business is have a plan in place. This plan can change over time and as you better learn the market you’re dealing with. However, to go in without a plan or “wing it” is the same as taking your hard earned cash and throwing it in a river.
If you don’t have any plan whatsoever, your chances of succeeding drastically decrease.
You don’t need to come up with anything elaborate or fancy. Just answer the following questions as best you can. It is expected that you’ll change or refine these answers as your business grows and you better learn what potential buyers actually want.
- How much money can I commit to starting this business?
How much each month? $10, $50, $200? - How much time can I commit to each week to work on this business?
- How long will I try before moving on to other ventures if it doesn’t take off?
- Who will my target customer be?
- How will I reach my target customer? Ads, word of mouth, in-person, etc.
- How much money do I need each month to break even?
There may be more questions you want to have answered and written down, but this is the bare minimum – and probably enough for most people.
The highlighted questions are the most important. Spend the MOST time on those two questions. If you can’t answer those effectively and with a clear strategy, you’ll fail. This is with any business.
Who will my target customer be and how will I reach them?
This is not rocket science. Your target customer may simply be “local businesses” and that’s a great place to start. Probably the best if many local businesses don’t have websites or need an updated one.
Some other ways to find a target group of customers is to narrow down (niche down) and target very specific businesses or people:
Web Hosting for Accountants
Web Hosting for Hair Salons
Web Hosting for Churches
Web Hosting for Membership Site Owners
Web Hosting for College Students
If you can’t go the local route because you live in a very large area, your Unique Selling Proposition (USP) can be that you work with a specific set of businesses or people and you know how to cater to their particular needs the best.
Once you have the WHO narrowed down, you need to figure out your plan for actually getting your web hosting services in front of those people.
If you’re going to target Local Businesses the easiest way is to drive around (or use Google maps/street view), collect names of local businesses, and then search to see if they have a website. If they don’t, call the business or go in-person to the business and talk with the owner. If they already have a website, maybe it needs a refresh?
If you’re targeting a specific niche, such as accounting firms or hair salons, the same method works to start. Find those types of businesses in your local area and work from there.
As you grow, you’ll move into paid advertising and other online forms of lead generation. However, never underestimate the power local businesses and word of mouth brings.
Write all of your notes down, form a clear plan of action about who you’ll target and how, and you’ll be 20x ahead of most people who try to start this business.
Step 2 Get a Domain Name
The next step is to choose a name and domain name for the business. Nowadays, most things with “host” in the domain name are taken.
I would strongly suggest you stick with a .com domain. There are successful companies using other TLDs, but most people will recognize a .com where they may not fully understand something like yourbusiness.host
If you can’t come up with anything, use your real name. I won’t go into any legal aspects here, but most states in the United States don’t require you register a business license or DBA if you use your actual name. Example: First Last Hosting Services or John Doe Hosting
Unless you have a very common name, you’ll probably be able to get the .com for around $8/year. If your name is hard to pronounce or spell, I wouldn’t go this route though.
With a name in mind, register your domain name. If you have no idea how to do this, I recommend using Namecheap. They are affordable ($8.88/year for a .com) and typically no hassle.
Just type in the domain name you want. If it’s available, you’ll see the add to cart button. From there, you’ll go through the checkout process and you’ll be all set.
Although you may be able to purchase a domain when you purchase your reseller hosting package, I strongly advise you NOT to purchase your domain and hosting from the same company. Even if you’re not that technical of a person and it seems easier right now, in the longrun it’ll save you a lot of frustration if you just keep them separate.
In this guide, I’ll show you how to link the domain name to the newly purchased hosting package.
Step 3 Purchase a Reseller Hosting Package
I would always recommend starting on the lowest plan available. As you get more customers, scale your plan up. Paying for more resources than you’re using is just plain wasting money.
My top 3 reseller hosting recommendations:
- A2 Hosting – #1 Have personally used them for years. 24/7 chat support.
- Siteground – #2 Reputable but can be a little costlier.
A2 Hosting is also another reputable company. I’ve used them in the past and had only one minor problem. I won’t go into detail about that problem here, but they eventually fixed it.
Which Package Should I Choose?
For the purpose of giving a specific package recommendation, let’s look at A2 Hosting’s…
The two primary things that matter when you’re starting are disk space/storage and cPanel Accounts. Combined, these will limit how much you can actually resell. Do NOT fall for “Unlimited” or “Unmetered” reseller hosting. It is technically impossible and a huge business liability to offer anything unlimited.
In the plans above, if you’re just starting out and have zero customers, choose the first package “Turbo Kickstart”. You can easily upgrade your package anytime by reaching out to their support team. No downtime or anything. They flip a switch, charge you, and you’re upgraded.
This plan costs $22.99/month.
This will let you sell hosting to 10 people. You’ll have 20GB of disk space which is quite a bit for web hosting. It should be more than enough for 10 people.
IMPORTANT NOTE! The pricing they advertise on the main website is not what you’ll get if you pay monthly. The price they advertise is what you pay if you purchase 1 year’s worth of hosting at once.
As much as I disagree with this business practice that’s extremely common in the hosting industry, you can easily see what you’ll pay monthly or on renewal by going through the checkout process. Just make sure you know what you’re signing up for.
In the image below, you can see that if I switch it to pay month-to-month that the price goes up to $34.99 and that’s only for the first month. Next month it will renew at the regular price of $49.99.
If you have the money, buy 1 year for a significant discount. By the renewal point, your customers should be bringing in enough income to cover the cost. If they aren’t, you can cancel the renewal and chalk this up to a learning experience.
I would always recommend starting on the lowest plan available. As you get more customers, scale your plan up. Paying for more resources than you’re using is just plain wasting money.
Step 4 Build a Simple Website
This step is truly optional, but I always think it’s best to set up even a basic site that overviews you offer hosting services. If you’re going to start out selling to family and friends, you may not need this.
If you’re going to be selling to local businesses, you’ll probably want to create a simple website that has a few key details and pricing.
If you don’t know to build a website, I would recommend using a WordPress + Elementor Page Builder template such as this one.
The reason I recommend this is that editing the side will be done with a drag and drop page builder. This means if you can use a computer mouse, you’ll be able to edit the site. You don’t need to know anything about HTML/CSS or anything coding related.
Step 5 Making Your First Few Sales
This will be one of the longer steps because I want to explain as much as I can on how to actually make your first few sales.
Most of the planning for actually making your first sale should have been done in the first step. You should already know who you’re going to target, and how you’re going to reach them. With that information and planning already done it’s time to actually get to work.
Finding Your First Customers
As we mentioned in the first step, if you’re targeting local businesses, the best option is to reach out to them either in person or over the phone. I would not suggest emailing these businesses as they probably already get loads of spam emails and yours would simply be ignored.
To these local businesses, you are unique selling proposition is that you are local in the area. Many local businesses are keen to support other local business. That is the advantage that you have over the competition.
I would provide any calling scripts or anything like that. The reason why is for each of you, in each of your regions, cultures, etc. different things will work better. The main thing is this: look for way to actually help that business.
This will lead you to your first realization…
Customers Need Web Design + Web Hosting
Most customers you encounter won’t ONLY need web hosting. They will also need help building the website. If you can also build websites, you will be able to land more clients while making more money. You can charge to build the initial website, and then charge monthly to host it.
Of course, this will require a little more technical and design knowledge. You’ll need to actually be able to build websites.
If you’re unable to build websites, don’t have any interest at all, or don’t have the time, there is still another option.
Partner With a Web Design Agency
If you can’t build websites, partner with a business that does. Preferably a local one. Tell them you will bring them clients to design sites for and work out an agreement.
There are two ways I would structure the agreement:
- You would get ~10% commission for everyone you bring to them
- You wouldn’t take a commission, but they agree to host any new client’s sites with you
You may even be able to combine those two options for the ultimate option: You get a commission on clients you bring them AND they send you hosting clients.
Once you have an agreement in place with an agency, you simply do the same thing you always would. Find businesses who need websites, and then send them to the web design agency.
This model works best if you can get the design agency to use you as their web hosting provider. This way any new clients they get (or existing ones) will be on your platform. You might simply bill the design agency once per month for all their clients OR they might have their clients sign up through you for the hosting portion.
Either way, this is a great way to keep a constant flow of new customers coming in
I Got My First Customer! How Do I Bill Them?
Once you get your first customer, you’ll need to bill them and then actually get them web hosting.
If you’re in the US, I recommend using Wave Apps, Square, or PayPal. This is just for your first few customers. Once you grow, you’ll upgrade to an automated ordering system.
The 3 payment solutions I listed allow you to set up Recurring Invoices which is extremely important. You won’t want to invoice customers every month manually.
Wave and Square make it easy to collect a customers credit card details securely, and then automatically bill them each month and send the receipt without you having to do anything.
Wave Apps also includes some accounting features which may be useful as your business grows. For simple businesses, it is a good alternative to Quickbooks which can be costly.
Actually Setting Up a New Customer Hosting Account
For every new customer, you’ll have to setup the actual hosting account. The instructions will vary slightly depending on who you choose to use as the hosting provider.
For A2 Hosting and any other cPanel/WHM based hosting here are the steps.
In the welcome email you get after signing up for the reseller package, you should get a login (username and password) to WHM. You’ll click the link they provide, login, and you should see a screen like this:
On the next screen, you’ll simply fill out the required fields. Enter the domain name of the customer, a username will automatically be generated based on the domain. You’ll create a password (write this down and give it to your customer).
When you scroll down, you’ll want to make note of the Nameservers listed. These are how you connect your customers domain to your hosting.
I’ve blocked out these particular namesevers for security, but assume they said…
ns1.nameserver.com
ns2.nameserver.com
ns3.nameserver.com
ns4.nameserver.com
You would tell your customer to point their domain to your nameservers. This would automatically point their domain to the reseller hosting server.
Once you installed WordPress or website files on the server under their account, the domain would load that website as you’d expect.
Conclusion
This is just an intro to starting a web hosting business.
The truth is that when you’re starting out like this – bootstrapping it – you usually don’t have a lot of funds to build infrastructure. Additionally, most of your energy needs to be put into finding customers otherwise everything else is pointless.
But it’s my personal belief and recommendation that once you start getting customers, you actually hire the proper staff to maintain servers and deliver exceptional, above-normal support & service.
Reseller hosting is OK to start out with, but how can you add more value?
Can you offer WordPress-specific hosting (requires knowledge of WordPress and what it requires)?
Can you narrow it down further and say WordPress/eCommerce hosting?
It’s much more complex and DOES require technical knowledge but it sets you apart from everyone else.
As you’ve seen, anyone with a couple hours and a credit card can start a “hosting business”. The real riches come if you can tack on additional services or narrow down and specialize.
Good luck on your reseller hosting business in 2023!