Growing your web hosting business part 1

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Success in any expanding business is all about transition. Part of that transition is a function of each company’s particular business model; essentially, it’s a matter of how big one is willing to allow his or her “small business” to become. That’s a series of decisions up to the owner to either follow or revise as circumstances warrant, but other motivating factors tend to get in the way. In a service-based industry, there’s simply no way to remain fixed while the individuals and businesses requiring said services have dynamic needs.
For instance, suppose you are running a small hosting business that focuses on basic website hosting. Maybe you’ve got a couple dozen clients paying you monthly hosting fees and hourly rates for website development, adding new content and so forth. Everyone is happy and there’s no pressing need to expand. That is, until a couple clients decide they want to move their internal email server off-site; they see no need to pay two different hosting companies when they could have both company email and web services on the same server for less money. Then a few more clients expand and hire their own part-time webmasters and want dedicated servers but will no longer need you to administer their sites. It is in this fashion that a high-tech business can become obsolete in the span of six months for very low-tech reasons.
The fact is that no business can safely remain static in a dynamic, world-wide market. In the hosting industry, competitors spanning the globe are constantly finding ways to offer more than anyone else, for less than anyone else, faster than anyone else. Whether your business is looking to maintain current clients or attract new ones, there’s simply no way to remain viable without always being prepared to expand when the need arises by answering the question, “What’s the next step?”
Moving beyond the entry level

Hosting has quickly become an easy entry level business. Without terribly much business experience or technical skill, reseller programs have allowed many a small upstart to gain footing in the global marketplace. At this level, simply having a relationship with a few small companies interested in moving to the web can establish a good base of clients and begin building cash flow.
The problem here is two-fold. One, those clients are inevitably going to need services that aren’t possible from a reseller. And two, this isn’t the 90s; most business are already utilizing the web and don’t have the time to “grow up” with their host. Clients certainly can’t afford for their hosting provider to be a bottleneck in their business operations.
Progressing beyond mere reselling, most hosting businesses move to using dedicated servers. This is neither a final step nor an easy transition, but it does give the host some needed breathing room for a time. It is at this point that answering the “next step” question gets more complex.