Starting a Web Hosting Company - Obstacles

As with any company, you're going to run into obstacles. You will face new challenges almost every day, and how you deal with those challenges will determine if you come out stronger, or so damaged you end up closing up shop..

The key here is proper planning. From the very basics all the way to the most complex, you need to have a plan of action written down that you're going to follow. As you face each challenge, you would then be able to consult your strategy and deal with it logically.

For example, some challenges you will face:
- Drop in sales
- Increase in cancellations
- Shortage of funds
- Downtime
- Mistakes in service
- Angry customers
- Negative Reviews
- Downtime
- Increased Competition

Just to name a few. You can combat all of the above easily.. Let's take negative reviews for example. So long as you are providing a good service, are confident you have done everything in your power to ensure satisfaction, have been professional and offered resolutions to the customer, then you have nothing to worry about. In your plan of action, make sure you have a strategy for handling bad reviews, don't just go in all guns blazing.

A part of my process to maintain quality is making sure my attention is where it is needed most. I can't possibly monitor all tickets, and not all tickets require monitoring, however it is important you don't miss important tickets out.. A good filter I put in place, is monitoring tickets that have too many back & forth replies. If something isn't resolved within the first few replies, then typically, something is wrong. I will monitor those tickets and see why it is taking so long to resolve. I will go back and consult whoever worked on the ticket and ask why this is taking so long. I typically intervene at that point, implement a structured approach to resolution.

Let's take another example.. Increased competition. Competition is just a way of business. I know a few hosts, in particular one small mainly UK web host that seems obsessed with what we do. Going as far as copying our plan names word for word, our site structure, type of wording, services we offer and even under cutting the prices. Should we be worried? Nope, not at all. A company that copies is always one step behind. Always a minute too late in getting the sale. Lack innovation and shows their inability to come up with their own ideas. Only sees what's on the outside, but isn't aware of the internal processes which ensure we deliver what we promise. We need a little bit of a pinch to keep the heat on, increase our efforts and eliminate the competition. We have a plan of action which keeps such companies at bay. It is a good idea for you to have one too, as ultimately, you will one day face such a scenario too and it will be important for you to stay ahead of the game.. Web Hosting isn't an easy industry, it's not just about getting a reseller account and a website.. You need to make sure you can get the sale, you need to make sure you give your customers a better reason other than price to sign up with you.

Having a plan of action will ensure you are prepared and equipped to handle the many challenges you are going to face.

Starting a Web Hosting Company - The Planning Stages

So you've decided to start your own web hosting company. Either you're tired of the quality of some hosts and you want to be your own host, want to add extra income and a value added service to your existing business or you just want to start a company. Whatever the reason, you have decided you want a web hosting company.

Starting a web hosting company, just like any other business, is a long and difficult process.. Don't expect that by setting up shop things will just "work out". They won't - you need to make it work out. You need to put in many hours of your time have the self discipline to motivate yourself. It won't be easy - but it can be done.

Before embarking on your journey, it's good to plan things out and have a strategy in place. Don't jump in blindly.. Decide the following:
- Where you want to be
- How you are going to achieve it
- What obstacles will you run into

Now, be careful here.. Don't be vague.. I expect you to elaborate on the 3 points above so it is at least a page long..In this post, I want to go through your planning stages.. things to do before you start your web hosting company.

Where You Want To Be?
Here you need to be realistic, but ambitious too. You don't want anything too easy.. yet you don't want to plan for something which you are unlikely to achieve..

In this section you want to detail your end goal. The goal which when you achieve you can sit back and say "I did it".. How you are going to achieve your end goal should be broken down into small chunks.. These small chunks will be your objectives. Short/Medium term objectives that you must achieve as part of reaching your goal.

You can start off with a bullet point list. I find starting from a high abstract view and then elaborating the best way to get your ideas on paper and in an organised matter without missing out important information..

So let's consider this scenario - You want to be self employed and run a successful company. You decide web hosting is ideal since you have a personal interest and the low barriers of entry..Excellent.

Where do you want to be? The largest & most successful? Don't we all? That's an example of an unrealistic goal to put down.. This is not to say you won't be the largest & most successful.. But the goal is too vague.. We need to be more specific.. In this scenario, you want to be renowned as a newbie friendly web host. You want to attract customers that are new to web hosting. Those are the type of customers that want things to just work and don't care for the specifics. They don't care your server has 16 cores, they don't care you have redundant power supplies.. They just want their web site up and working.

So let's write that down.

Be Renowned as a newbie friendly web host

Don't bother with using professional names or long words in this strategy. It doesn't have to be formal or professional. It's for you. It needs to be clear and concise. It needs to be in a format you can understand and use.

Now, for the objectives..This is where we get a little more specific. How can we be renowned for being a newbie friendly web hosting company? Well, the first step would be to gain an understanding of what it takes to become a newbie friendly web hosting company. So gaining an understanding would be your first objective. Let's write it down..

Gain an understanding of what it takes

It may not be an ambitious objective, it's actually pretty straight forward.. And doesn't sound too exciting.. But it's necessary for two reasons:
1. It is vital to do the necessary research
2. It's an easy start. Once you achieve it, you can cross it off your list - Progress already!

Feel free to expand on the objectives too.. For example, I could expand on the above with a few aims in order to reach the objective.

Gain an understanding of what it takes
- What tools will you need?
--- Will need easy to use helpdesk system
----- System should have a built in knowledge base
--- Will need payment systems
----- Automatic credit card processing
----- PayPal payments
----- Billing System
- What software is best geared for them?
--- A sitebuilder software
----- Must have a web based WYSIWYG editor
----- Have variety of built in templates
--- A control panel system for the customer
----- Control panel will need to be suitably organised so it is easy to use.
----- Control panel must not be daunting to use
- What direct competitors will you have?
--- Host A is a direct competitor
----- Host A offers service X
----- Host A offers service Y
----- Host A has prices Z
--- Host B is a direct competitor
----- Host B has a custom control panel
----- Host B has bundled service xyz for free
----- Host B is at the abc data centre
- What is the potential for this niche?
--- Blogging has become more and more popular and continues to do so
--- Economic situation means more potential people at home.. many may want to look into setting up and online business and are new to the idea
--- Competitors are plenty, but areas for xyz and abc are fully covered by the competitors opening up a potential

Now the above is a very basic example.. Not properly thought out, but really it's to just give you an idea of how to get going..

You have 1 goal, a few objectives, and many aims.. I find the smaller the chunks, the easier they are to achieve and in turn the more progress you will see..

Keep it manageable and organised.. In a tone that is familiar with you.. You may go through a few draft copies before you eventually settle down on a list that you are comfortable.

It doesn't have to be in the format I've put above.. That is just what I am confortable with.. You can do it however you like.

On the next post we will look into the the 2nd objective "How you are going to achieve it?"