Forums: Discussions for entrepreneurs and small business.

In the past I`ve worked for several web hosting and design companies and am considering starting my own. My question is with companies like GoDaddy offering 3.95 hosting and domains at 6.95/y is there any real money left in the hosting/design. It seems like everyone knows someone who does web hosting or design. Clearly a niche would be helpful but I have yet to be creative enough to come up with one.

Netrix,
Yes, there is still money left in the hosting business. If you plan on opening your own design company, you may want to include hosting as part of the deal, meaning they have to host with you. Not only is it beneficial to you in the long run, but you don`t have to call some other company for technical support. Make sure you are knowledgeable enough to give technical advise or support.

One more thing Netrix, Just because godaddy offers 3.95 hosting, doesn`t mean that`s all you are going to pay, their plans start at 3.95 by the time you are done adding resources and gadgets to your hosting account you could end up paying close to 49.99.. so what happened to the 3.95? That`s their catch...
What I had to do to stay competitive is offer 3 simple packages..
Start up package, Small Business Package, and E-commerce package.
I tried to to stay competitive with all other`s at one time. But wasn`t making anything off of it. So I had to raise the price just a little to generate some money. I found out that the only way you can make money at 7.95, 8.95, and so forth... you would have to have at least 100 sign ups a day to be profitable.
So I might not be a cheap company to host with these days, but one thing I can assure you of is; I offer 24/7 technical support. and 99.9% up-time.


-------------------------

Edgar Monroy
Web Developer / Owner / Consultant
When starting your own business the need to "know-how" is greater than money!
http://www.nuevolution.net

There is a  web design and hosting company I found from surfing the web. Its called  Custom Pro Design. I think they are based in Seattle, not sure but they have offices all over besides. They will design a $1500 website for you but the catch is they want to host the site.  They say they do this only once a year it helps beginner designers build up a portfolio. So far they have called me 3 times about it, but I havent followed through since I never heard of this company. I heard all the horror stories about host providers plus I already paid in advance for 2 years at StartLogic.  Did anyone ever hear of this company before? If so good or  bad?
Thanks everyone


-------------------------

Jo
NJ

What company are you talking about? Starlogic? This is the first time I hear about it.
Watergal, thanks for bringing that up, yeah there are alot of companys that will design your web page, and host it for you.. The only thing about these companies is; let`s say you no longer want to do business with them. They will make your life impossible. They wont answer your calls, they wont address your support tickets, and leave you in the dust.. But they will charge your credit card once a month for web hosting and maintenace fees.

If you are going to be a designer, stick to desinging only. If you are getting into the hosting business. Make sure you have a way where your clients have total control of their web hosting account.
I started out by designing and hosting at the same time. I never held a clients web site at ransom. and I never had a customer drop my service... I just got wise about it and split the company into three... Domain Name Registration, Web Hosting, and Web Design.
Now I am able to keep track of Web Hosting Sign-ups, Domain Registration, and Web Design... Plus the customer`s feel more secure since they can log in and play around with their web hosting account.. I guess it gives them peace of mind knowing they can log in somewhere and see their resources..
Plesk 75 has a good Web Hosting Control panel..

-------------------------

Edgar Monroy
Web Developer / Owner / Consultant
When starting your own business the need to "know-how" is greater than money!
http://www.nuevolution.net

Mr. Monroy,

Part of me wants to believe all you need is a couple good sales people to really bring in the business but with awareness of these bargain basket hosts getting more prevelent I wonder if thats still true. True you can add services until even GoDaddys hosting is expensive but I a couple months back purchased there 3.95 account and was very happy with it. Granted I wouldn`t host anything even remotely mission critical or high volume but that doesn`t describe most of the customers that would probably bite on a no name hosting company. Can I get personal and ask if you sell many of your packages (as listed on your site)? Many of the hosting related websites seem a hodge podge of different services leading me to believe that they are making the majority of their money elsewhere. Again maybe its all in the marketing... a couple weeks back I stumbled accross an individual in NC whose 5 page STATIC websites cost $1500 (not including hosting or any other perks). If she can sell that either she`s good at sales or she isn`t making any money!

Rob

No that is not all you need to be a successful web hosting and web design company. You need quality customer service;
you need; web servers, domain registration tools, you need Security, most of all the know how on running a web hosting business.

As for the web design part of it, you need to be creative, must have the knowledge of the various aspects of web design.
Netrix, first of all no-one said your company is going to be know over night.. Especially in the web hosting business. You will have to do what many of us are doing.. Marketing and offering free web hosting accounts to get your name out there.  As far as the packages that I have listed on my web site,
I just sold a Reseller package to one of my web designer friends, I sold an E-commerce package yesturday and I sold two start up packages today.
"you said it my friend" it`s in the marketing. When I started my web hosting business I used to offer it for free as long as they stayed with me. But that Got old very fast.
Now, I can offer it as an attachment or as a secondary service to my cleints. But Web Design and development being my primary source of getting my bread and butter.
1500.00 for a static web site sounds about right. Depending on functionality. If its a web-brochure.. yeah. It`s feasible.
If it`s an application, then... I wouldn`t even touch it for that much.

-------------------------

Edgar Monroy
Web Developer / Owner / Consultant
When starting your own business the need to "know-how" is greater than money!
http://www.nuevolution.net

Edgar - I pretty certain one of the skill sets I don`t have is selling so maybe my best route would be to look into hiring some commission based sales reps. I`m glad things are going well its awesome to see people living their dream and making a go of it. Thanks for your comments.

Netrix,

You need to find a niche in the market as Godaddy did.  You don`t want to compete with them, you want to attack the situation from a different angle with less resistence and a larger profit margin.  Godaddy has not been profitable from the day it started.  It`s been close to a decade.  Do a google search and you`ll find their financial info.  They are going public and people are concerned about buying their stock because they have never turned a profit.

You need to first identify your demographic or niche and then develope your product to fit their specific needs and set the price to match.  People are willing to pay more if you offer them a product that they want and need, you are honest and earn their trust, and you provide good customer service.

I am personally willing to spend more money for products that matter to me if the product and service are better, or are a better fit for my needs.

Think outside the box of the cookie cutter model.

Good Luck

Another thing.  Start small, think local.  I don`t know how big the area is that you live in, but I`m sure that there are enough small businesses that need webdesign and hosting to get you started.  Once you get some experience, infastructure, and profit to reinvest start to chase after the larger market.

There are plenty of millionaires who never strayed far from their backyard.  They met the needs of the local market and built a loyal customer base.  Just like any Car dealership, furniture store, or grocer that`s been in the city for 50 yrs and everyone goes to them because they are local.  People like being able to meet you in person and know that if they need to talk to someone they could come to your office.  They probably won`t, but they like the idea.

letutor - Good info. I never thought to look up the financial records I just assumed with all that infrastructure that they are doing well. So much to learn so little time!