Starting a business

A

accord2nrz

New member
I apologize up front for those that see this as a newbie question. But I've been toiling over this for several days now and wanted to get some advice from those that have taken this road already. I plan to start a webhosting and gameserver hosting company but not sure if it's the right route for me. I've read alot of the posts here and seen alot of the people talking about moving to dedicated hosting and all that. Here is the thing that's pushing me into this route.

At my job I was actually given 5 Dell Poweredge 2950 servers (2U) loaded with 6 300G HD's each, 3 Cisco 3760 switches, a cisco network inspection tool, and several other goodies to include 500' of Cat 5e, 4 20" monitors, 6 rail assemblies, and 3 server racks.

So as you can see I think God has pretty much put it in my lap, i'm just trying to ensure I get all the necessary equipment to get started. I have a degree in a business and have been actively designing websites for nearly 20 years. In the eyes of some you more experienced folks would you take the plunge with a setup like this?
 
It depends, what financial backing you have.

I run a decent sized web host, utilizing around 17 servers, I also diversify in other things such as computer repairs and so on.

I really would ask yourself, are you a technical person? Who can manage and setup such hardware and the software part? Can you be around if it breaks, can you replace it and diagnose faults? Can you handle the stress!?

If not, I would go down the renting managed servers route first, or even start on a reseller.
Starting out in this industry is not easy, and takes a long time to get to grips with things, learning your Clients, doing the books everything.

A degree in Business is not much really, in my own view, experience is what counts the most.

It depends on many factors, and financial backing. And what your skills are and how long you can wait to earn a real profit.

I would not consider this industry likely, do really think it out.
 
accord2nrz said:
would you take the plunge with a setup like this?
Click to expand...

There's a *LOT* more to providing professional webhosting than just have a few 2nd-hand servers
* network
* support
* systems administration
* client acquisition / advertsing
* accounting / billing
etc

IME your starting point should be an extremely detailed business-plan, and enough funding to get through the first year with no income...
 
Thanks for the timely reply Paul I appreciate it, and I'll definitely be thinking about it before I jump into it.

and just to clarify on some possible misconceptions yes I'm tracking about the business plan, the servers aren't second hand. In fact all the equipment is brand new, and I have enough financial backing to go three years with no income.

I figured three would be a safe bet, but thanks for the advice. I don't think starting any type of major financial venture should be taken lightly. I suppose every industry has it's quirks :)
 
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It's good you have 3 years of operating capital because you will probably need it. It sounds like you probably need to do more research before you make a final decision. Good luck to you!
 
I found it best to start small and expand as needed. I was in a situation last year similar to yours...

I was provided rack space and bandwidth in a co-location for free as a quirk to a deal I was involved in ... I purchased some servers and started up a web/ hosting business. I jumped right into it, without a business plan, because this required only up front costs of my servers , and no monthly recurring charges to keep it running. I made my money back and a few dollars the first year. I have seen the amount of time and effort that is really involved.

The big factor here is identifying your clients. For me, I am stuck with the clients that want to see my face, want constant communication, but are willing to pay more for that. I would prefer the quantity over quality, but then you are talking about having a whole team to support the services.

There are hundreds of turn key solutions out there. My suggestion would be to start small with a hosted infrastructure ( rent/ lease a cpanel & whm solution ) for several months to get the hang of things and see if you can pull clients, then if that starts to work out, put the investment out and build out your infrastructure. Leasing a reseller account is ridiculously inexpensive, ~$30 a month to get you started. Managing your own infrastructure with those 5 servers will cost you a good $1000 monthly easy, for just a rack and bandwidth unless you have a good connection.

Hope that helps a little.
 
Well, you certainly have some nice hardware - the colo and bandwidth charges shouldn't be more than $500, but what's your target audience and your plan to ramp up sales?
 
You have a lot of financial backing to see whether your idea works or not. You should be able to tell within a year or so if your idea would work out. I would honestly say to go for it, as long as you know that you have the time to dedicate to your site.

Are you going to quit your dayjob to pursue this? How will you be able to work both jobs? It takes a lot of research first to know who your visitors will be, whether the idea will be popular, and how best to utilize marketing strategies for your benefit.

Make sure you have a plan for everything that could possibly happen with your website. You need to be prepared for the ups and downs.

I wish you luck though!
 
othellotech said:
There's a *LOT* more to providing professional webhosting than just have a few 2nd-hand servers
* network
* support
* systems administration
* client acquisition / advertsing
* accounting / billing
etc

IME your starting point should be an extremely detailed business-plan, and enough funding to get through the first year with no income...
Click to expand...

Those are good points.
Many people think that running a hosting biz is something easy because everything runs by itself....

But this is NOT true.
You will have to give alot of time for support, including 24/7 possible emails/calls
+
You will need to fix server issues because clients call fast when things are down

And finally, you need to invest a lot of time to find your clients because this is a rough market.
 
I started in this business back in '04 with just a reseller account. I then upgraded to a VPS and then Dedicated server.

I was one of those "fly-by-night hosts" (or so they thought) because I did it all WITHOUT a business plan. I also had 0 experience at that time.

Since you already have the hardware and it's clear you want to do it. If you didn't want to, you wouldn't have started this thread. I would put ONE of the servers to work. It won't cost much to col one server and with the size of it, you will make the money back easy.

With only one of the servers colo'd, you have back up parts/servers incase of hardware failure. Also, when it's time to expand, you have the other servers to hook up PLUS with the income from the first server, you shouldn't loose much on the second one.

Best of luck to you,
Jerry
 
You have the hardware and the financial means, so that is a good start. But most importantly, do you have the technical ability required to securely maintain the business? Or since you have the finances, will you be hiring a qualified admin?

From the sounds of it, you have no technical background other than designing websites (which honestly is nothing compared to administrating a network and servers), so if you opt to run the business yourself, you may find out the hard way it's not as easy as it sounds.
 
othellotech said:
There's a *LOT* more to providing professional webhosting than just have a few 2nd-hand servers
* network
* support
* systems administration
* client acquisition / advertsing
* accounting / billing
etc

IME your starting point should be an extremely detailed business-plan, and enough funding to get through the first year with no income...
Click to expand...

Very good comment here specially the funding with no income.

The first year seems to be the hardest, but gets better after that. But if you got the hardware free, you have server managment knowledge and an operating budget. You should really have a leg up at starting.

Look at you location where is the nearest datacenter, the quality of the datacenter, the price for colocation, Licensing needs and make sure you have got all your ducks in a row.

I tell you a detailed business plan would have served me well I have been going through it shooting from the hip.
 
I would recommend getting a server management company to help you out for the first few months till you feel comfortable with dealing with resolving your clients errors/changes. This will allow you to focus on sales, rather than having to worry about the technical side of things.
 
Ensure you have a solid business plan and cash flow in place and do plenty of research before placing you're equipment with someone.
 
Start by making up a solid business plan and more than one to cover all possible ideas and outcomes.

Include things like advertising budgets/locations, Service requirements, Budget plans. Sales and Support plans. There are many good sites that will tell you on how to do a good plan.
 
HogWildMark said:
Start by making up a solid business plan and more than one to cover all possible ideas and outcomes.

Include things like advertising budgets/locations, Service requirements, Budget plans. Sales and Support plans. There are many good sites that will tell you on how to do a good plan.
Click to expand...

And think about your company , do a research before you start it about this solid business plan that HogWildMark suggested you to have
 
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