Originally Posted by ReadyMakers
The market is already flooded with BUDGET stuff to start with...
VPS selling is good if your budget doesn't let you take risk of dedicated reselling.
If you have enough budget, go for full-rack colo.
It's almost certainly true that running a full-rack of servers in colo will give the best profit margin, but I certainly wouldn't recommend that as a place to start !!
@OP, I would suggest to start small, build a business and then grow. You'll probably find it easier to resell VPSs at first as people ask fewer questions of a new business over a £10/month VPS than they do about a £200/month server, especially with a new business. As you develop the VPS business you will grow the right skills to move up and set up your own infrastructure, increasing your margins as you go.