How to Start a Hosting Company

Web hosting enables individuals and businesses to upload their personal and commercial content to the Internet.
Web hosting enables individuals and businesses to upload their personal and commercial content to the Internet. (Image: Hemera Technologies/ Images)

Web hosting plays a central role in the multibillion dollar Internet industry. Each year millions of domains are registered with The Internet Corporation for Assigned Numbers and Names (ICANN), the nonprofit organization that oversees the domain name system. By starting a web hosting company, you can participate in the industry's growth by providing domain name owners with the bandwidth and hosting solutions they require to develop their online presence.

Things You'll Need

  • Capital
  • Office space
  • Servers
  • Bandwidth
  • Advertising

Raise the start-up capital. Starting a web hosting company requires a significant amount of capital. Estimate the financial cost of launching your web hosting company and evaluate the state of your personal finances. If you do not have access to savings, consider forming a partnership with other investors or taking out bank debt.

Lease office space. Locate a suitable space to house your servers and other equipment. Take into account the need for additional room for other in-house departments, such as customer service or advertising.

Lease or purchase servers. Determine whether to own or lease your servers. The options range from custom-built products by manufacturers such as Dell or Gateway to preconfigured servers. Leasing equipment under a monthly payment plan is an attractive option if you do not have adequate capital.

Select a bandwidth provider. If you purchase your own servers, you will need to locate a bandwidth provider that can run a line to your servers through a router. If you lease your servers, the company that leases the equipment will normally offer you a bandwidth package.

Advertise your hosting solution. In order to be successful, you will need to convince consumers to choose your hosting solution over those of other companies, many of which are more established. You will need to develop a website advertising your services and attract as many visitors as possible. Factors involved in receiving traffic include search engine optimization, online affiliate advertising, advertising in physical media, connecting with social media and listing your site in relevant online directories.

Tips & Warnings

  • Plan to build a robust in-house or outsourced back-office structure to handle billing and payment processing.

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