How to Start and Setup a Successful VPS Hosting Provider Business

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How to Become a Successful VPS Hosting Provider

A virtual private server is a virtual operating system within a parent server that uses virtualization technology to provide dedicated resources to other virtual servers. VPS are virtual machines that virtually mimic dedicated servers within a shared server.

VPS hosting has become a popular choice for companies that need a secure and affordable backup environment because it provides better security and performance than shared hosting and is generally lower in cost than dedicated hosting.

The advantages of virtual private servers make VPS hosting or reseller hosting a lucrative opportunity. If you are planning a VPS start-up, you are a few steps away from setting up a successful VPS Business.

Steps to Creating a VPS Business

There are six secrets to success for your VPS startup

1.  Do Basic Planning

Man writing on board

Building and hosting VPS services is time consuming and resource intensive. You need to work hard to build quality, profitable and sustainable hosting services. There is no guarantee that you will succeed as a hosting provider if you are not ready to roll your sleeves up and get to work. The primary responsibilities of running virtual machines involves supervising server resources and coordinating your hardware, location, network, and operating systems.

Your patience and commitment will be tested. Luckily there are some tried and tested web hosting processes and guidelines that you can follow. There are also special requirements that hosting companies need to meet. The first step of the planning process entails drafting a pathway with clarity.

A comprehensive small business plan should include your vision, values, mission, unique selling proposition, the product or services to be provided, including a VPS plan, your budget, market demographics, legal paperwork, and many more.

Funding is necessary to secure your business's basic assets and cater to expenses incurred, such as operational fees, site rentals, permits and licenses, marketing, and employee payroll. As a rule of thumb, you should have enough funds to cover expenses for the first six to twelve months of operation.

2.  Build a Solid Team

People with drinks at a table

Building a VPS company is not a solo journey. You need the collaborative effort of other people to survive. Any type of web hosting venture requires adequate manpower to handle various operations like troubleshooting for managed VPS hosting; else, a crash or failure is inevitable. One of the decisions you will need to make when building your managed VPS website is whether to outsource your workforce or hire full-time employees to work with you.

It is cheaper to hire full-time employees, but it is more productive to outsource to freelancers or experts. Nevertheless, it is advisable to operate with in-house employees to ensure full control, support, and guaranteed resources are available in the event of any unplanned web hosting issues, such as SSD storage (solid state drives) failure, cloud hosting misconfigurations, root access lockouts, or any other critical malfunction that may interrupt websites, online stores, or services that are hosted on your dedicated servers.

Building a team begins with your hiring process. If you don't make good hires, your hosting startup and the websites utilizing your services will suffer the consequences. Before recruitment, you have to know the specific positions that have to be filled and the job description for the position. Timing is very important also. If you do not know when to hire, you may make the wrong choice. You should never recruit just for the sake of getting a position filled.   

3.  Build the backend

Laptop with code written on the screen

Carefully considering things like network, hardware, location, and VPS hosting software is important. Making the right choices will yield better performance on your web servers and allow other users to easily scale resources up in the event that they see heavy traffic spikes to their websites. You may also want to locate your hosting servers in a higher tiered data center. You should link your VPS to a reliable power source and a strong, speedy network. You should also consider providing security and support for your services.

Dedicated server hardware the most costly part of setting up web hosting. This is because it is the foundation of the services you offer and it largely affects the quality of the services to be offered. Shared hosting plans will, at a minimum, include SSD storage, RAM and CPU power.

VPS hosting software, such as the control panel, is as important as the hardware because it contributes to the overall security of your services. Through the control panel, your software will manage automatic software updates, control full root access to servers and manage user access to email accounts and cloud VPS. Regardless of how powerful your hardware is, your services will be inaccessible to your clients if your network connection is poor. You should be prepared to provide unlimited bandwidth, to an unlimited number of users, with access to unlimited domains in order to cater to an array of clients.

4.  Prepare to go to market

Man adjusting his tie

While getting ready to take your company to market, you should also create an impressive portfolio for your potential clients. To do this, you need a well-detailed Terms of Service (ToS)/Service Level Agreement (SLA) as well as a good looking website. The contract you offer to your clients through these two documents is essential to the success and profitability of your company. This contract will demonstrate that your company is credible and legal in the face of the public. A sure way to make your web hosting less appealing to your potential clients is by drafting a contract that is not well-designed or poorly written.

In every VPS contract document, the ToS and the SLA are essential. The ToS provides the fundamental guidelines for interactions between your clients and your VPS company. The SLA is a document that indicates your intention to offer quality support for your products and to operate within a particular standard, as outlined in the document. It also reveals the penalty for a breach of contract or responsibilities.

A general contract document for VPS hosting and cloud VPS covers disputes, service charges, privacy date ownership, and payment structures. It should carefully detail how security challenges will be handled, how violations will be dealt with, and your clients' technical support contract restrictions. You should explicitly outline the services your company will be offering and possibly the nature of other websites and shared hosting clients on the same server. It should cover the response times, reliability, resolution periods and availability.

Your business's website is your business's public face. It is your brand identity. It is the medium through which your shared hosting company communicates or interacts with clients. Your website should create an excellent impression on your visitors. It should be appealing enough to command their attention and make them return. Your site should be visually appealing and have attention-grabbing content. Consider what other sites do in your space and adjust your website to improve on those designs and ideas.

Nevertheless, it should be simple and unique. It should have enough information to persuade your prospective customers to make a final purchase decision on one of your VPS hosting plans. It should be optimized for SEO and versatile for mobile use. Don't forget to ensure your site security is up to date by installing a free SSL certificate. Free SSL certificates are sometimes provided by domain hosts or can be acquired through websites like letsencrypt.org.

5.  Test your systems

Man writing in notebook

Before you finally launch your VPS Hosting Business, you should ensure that every hardware element and component is assessed and evaluated. This will help you know and resolve every potential challenge your clients encounter during usage. Most of these challenges are not peculiar to you. Failure to check and test your own operating system, server, and components will result in a bad user experience for your potential clients.

You have to make sure that the web portal, billing platform, security software, load balancing, management platform, network switches, and monitoring VPS hosting software are working perfectly for your server(s). It is better to test run all of these components before launch, otherwise you will have to deal with numerous support requests and complaints from your potential clients during usage.

 6. Launch

Spaceship launching

After putting everything in place, it is time to host your dedicated server(s) and launch your managed VPS hosting company. It is time to sell your dedicated server space! Launching your VPS hosting business involves planning a marketing strategy that will yield profitable results. It is important to understand that marketing is not free. You should have your marketing budget in place to pay for advertising. You should hire a professional marketing team to get the job done and make your launch massive. Publish valuable content on your blog or site so that visitors can read and be converted to clients. Write newsletters and sales copy frequently to persuade your potential clients. Press releases and social media are major channels to reach a wider audience of potential clients.

One of your marketing components should include social proof such as testimonials and reviews. This has shown to be very powerful.

Networking or partnering with other professionals in the industry is essential to growing your VPS hosting business. As much as possible, ensure that you do not stop exposing your business to potential customers.

In a bid to build a successful business, never forget the power of quality customer service. Happy and satisfied customers are the core of successful VPS host.

How to start your VPS hosting services as a reseller

One of the pros of beginning your VPS web hosting company as a reseller is that you can gain knowledge without incurring much financial risk. This is a good starting point before you consider expanding or scaling your business.

As an initial step for VPS hosts, this can help you evaluate your management acumen and develop a strong foundation for subsequent progress. Beyond purchasing VPS hosting software and a cloud or virtual server, you need to acquire hosting space and recruit employees. 

1.  Look for a dependable provider.

An optional plan is to get more reliable servers from an already established dedicated hosting provider at an affordable price and install a control panel where the VPS will be sold to potential customers. With this, you will be able to cut operational costs drastically and begin your shared web hosting service with decent capital.

2.  Look for a niche

The VPS industry is very broad, and the competition is fierce. You need to narrow down your service to a particular niche. You have to conduct market research to make this happen.

It is more difficult to manage a large number of VPS servers than to manage a few servers. Therefore, offering high quality technical support and speedy customer service to the selected few will help you stay profitable for a long time.

Also, you may decide to sell VPS servers to many potential customers in a particular community who always require VPS servers. There are data scientists, game developers, people in the web database world, and software developers who make use of VPS server management to operate their works. Interestingly, this category of VPS server users often share the same needs.

One of the reasons niche marketing is recommended is because there is limited opportunity to make profitable sales if you market too broadly and stretch yourself thin . In a niche, you understand your customer's specific needs and can speak the marketing language needed to attract a prospect and close a deal.

3.  Customize your VPS infrastructure

Having your VPS infrastructure on the ground is necessary. This involves making customized server packages for your target customers. These packages involve CPU cores and different RAM quantities as well as disk space.

Preferably, you can choose to purchase VPS servers cheaply from a provider without having to customize RAM or CPU for every VPS. Some niche markets require more memory and less CPU power. Create a shared hosting plan that matches your clients' needs.

4.  Automate Billing

New VPS hosts who do not have a large customer base can adopt a manual billing method using an open-source suite. Over time, you may have to adopt another effective means of billing, particularly customized for your niche.

5.  Supervise your VPS infrastructure

As a service provider, you should endeavor to take control of your VPS infrastructure. You should have a minimum of three fundamental systems on the ground. These include a system for backups, another for support ticketing, and one for active supervision or tracking of your server. There is software to accomplish these tasks and you have the option to use a paid service or the free alternative.

6.  Handle abuse and spam

Malicious activities such as abuses and spam on a client's site can negatively affect your reputation and credibility; hence, you should strive to disallow it by implementing preventive measures like a free SSL certificate.

There is hardware and software that can discover and reduce spam in your system. If you cannot afford to integrate these tools into your system, you should try to design your monitoring system to catch cases of abuse or spam.

Partner with ServerMania

ServerMania is not only a leader in custom dedicated servers and web hosting solutions; we are also experienced in the VPS hosting business. We are open to partnerships and patronage.

Are you interested in becoming a VPS host? Read our guide on how to get started and learn about best practices for setting up your company.

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