To provide top-notch hosting service for 1000 customers, I calculated that 4 servers (with a capacity of 250 people per server), plus an extra one, along with 1 administrator, 4 support staff, and 1 accountant would be necessary. Additionally, office space and a communication channel must be rented.

It seems that organizing shared hosting can be rather unprofitable. I wonder how others are able to make a profit in this business. Perhaps cost-cutting measures can be implemented without sacrificing quality.

Having efficient support negates the need for a physical office. The support staff can work remotely from their homes. An office is only necessary if it is required for support, billing, or a space for the boss. Alternatively, it could be needed as a legal mailing address. You may not need four servers immediately either. However, you will require a considerable amount of money to start the business and make it profitable in approximately six to seven months.

 If you have an established business that generates income, you might be able to acquire millions of dollars in investments. Remember, no one will give loans without collateral. You mentioned investing in equipment, support, advertising, rent, electricity, etc., but it's crucial to wait until it becomes self-sustaining before profit is made. And without proper support, how can you expect to succeed?

One of the highlights when setting up your own hosting is developing a website for hosting. Of course, you can start by selling your services to friends, acquaintances, etc., but this source of customers is far from unlimited and you will soon have to face the need to find new customers. So, as we noted earlier, we are simulating a situation with a small budget, which will have to be distributed over a lot of things - in connection with this factor, the site should not be expensive. You can start by creating a site yourself with template CMS, which are now quite a lot, and at the moment, many reputable hosters use public free CMS, as well as paid ones. Therefore, you will definitely not be ashamed of it. Another thing is that the site should be informative, convenient and fast.

I figured to create a high-quality hosting, say, for 1000 clients, you need 4 servers (250 people per server) + 1 spare, 1 admin, 4 support, and 1 accountant, and also rent an office and a communication channel. In a word, it is not a profitable event.

You are very risky. I've been thinking about it, and I think that profit will start to appear only with more than 6000 customers. And it is not easy to develop to such a size. It is possible that somewhere a couple of years it is necessary. How do you plan to live the first years? Invest?

There are plenty of hosting providers available today that offer high-quality services at an affordable price. Before choosing a server, you should consider why people would choose your hosting service above others. What unique benefits can you offer? Or perhaps you plan to establish a personal connection with your clients? Acquiring and configuring a server is easy compared to how challenging it is to attract and retain customers. Without proper support for client sites, 98% of clients would not require web hosting.

If you lack experience, your reputation could suffer, and your competitors already have a simple business model. Consider working for a reputable hosting company first and gain valuable experience in support, reselling, customer acquisition, and business planning. Determine the costs involved and then open your own business. If you are not prepared to put in the effort, it might be best not to start at all. Keep in mind that no one will provide you with a manual on how to operate a successful business. Most of the information is readily available online, and with enough research and experience, you may find the answers you need.

There are several strategies that can be employed to ensure profitability while still maintaining high-quality service.
Firstly, in terms of server capacity, it's important to consider the utilization rate. While you've calculated that 4 servers (each with a capacity of 250 people) plus an extra one would be necessary, it's worth exploring whether the utilization of these servers can be optimized further. By efficiently managing server resources and implementing technologies such as virtualization, it's possible to increase the number of customers served per server without compromising performance.

Additionally, cost-cutting measures can be implemented in the areas of personnel and office space. For example, remote work arrangements can reduce the need for extensive office space, and outsourcing certain administrative and support functions can lower overhead costs. Automation of routine tasks can also reduce the need for a large support staff, while still ensuring timely and effective customer service.

Examining communication channel options can reveal opportunities for cost savings. Negotiating favorable rates with communication service providers, leveraging cloud-based communication tools, and optimizing network configurations can all contribute to reducing communication costs.
While organizing shared hosting can present financial challenges, there are methods available to make the business profitable without sacrificing quality. By optimizing server utilization, utilizing cost-effective personnel and office space arrangements, and being strategic about communication channels, it's possible to achieve profitability in the hosting business.

Quote from: sergiocharm on Aug 02, 2022, 04:54 AMTo provide top-notch hosting service for 1000 customers, I calculated that 4 servers (with a capacity of 250 people per server), plus an extra one, along with 1 administrator, 4 support staff, and 1 accountant would be necessary. Additionally, office space and a communication channel must be rented.

It seems that organizing shared hosting can be rather unprofitable. I wonder how others are able to make a profit in this business. Perhaps cost-cutting measures can be implemented without sacrificing quality.

Shop around for better deals on hosting providers or consider using virtual servers or cloud hosting for better resource utilization.