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  Post #16 (permalink)   05-09-2009, 06:51 AM
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Do I know investors willing to lose money? Yes I do - that's how I got started years ago. Over the years they have lost 100's of thousands in businesses that have failed. Every investor knows it's a risk, and the risk/reward is what attracts them to the business.

Maybe the word "care" is what threw people off on this one. They do "CARE", but they know the risk, and are able to write it off as a bad investment.

I worked for a guy (many moons ago) who built a business with the sole purpose of losing money. He was using his other businesses to fund the project and incurred a loss every year for the purpose of tax writeoff. (actually 1 in 5 years must make a profit or break even according to california law if I remember right). There are a number of corporations that build such shelters to offset costs - it's not all that uncommon.
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  Post #17 (permalink)   05-09-2009, 09:10 AM
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Quote:
Originally Posted by handsonhosting View Post
If I was to start a new web hosting company, I would seek financing for between $20,000 and $50,000.
Conor:

I could not agree with you more. I'd even go as far as the $100k range. The markets are very competitive now because of those $25.00 low cost host. You need to get your name out there and with the cost of advertising on the true sites that are going to bring you business its going to cost.
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  Post #18 (permalink)   05-09-2009, 01:57 PM
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The problem I fear stems from the fact that people turn to hosting, or starting a business in general, when nothing else is available to them, and they're in some of the worst financial situations. No job, $1000 in their account, and ready to have a business. Essentially, they have no money and not enough time. They need to become seriously profitable within weeks.

Personally, I don't think one needs $20000 in cash to be a host, but one probably does need $20000 worth of time on his hands to make it work.

We do need a definition for "host". A reseller account, or one dedicated server, virtually not advertising budget, is what many hosts started out with, yet they have survived, and even made a name for themselves. The right person can still do it, or so I hope.

Last edited by ldcdc : 05-09-2009 at 01:59 PM.
 
 
 


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  Post #19 (permalink)   05-09-2009, 05:05 PM
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The problem I fear stems from the fact that people turn to hosting, or starting a business in general, when nothing else is available to them, and they're in some of the worst financial situations. No job, $1000 in their account, and ready to have a business. Essentially, they have no money and not enough time. They need to become seriously profitable within weeks.

Personally, I don't think one needs $20000 in cash to be a host, but one probably does need $20000 worth of time on his hands to make it work.

We do need a definition for "host". A reseller account, or one dedicated server, virtually not advertising budget, is what many hosts started out with, yet they have survived, and even made a name for themselves. The right person can still do it, or so I hope.
I think you make a good point; however, I do believe to do it properly you need cash. There is to many expenses and changes of failing if you do not have that financial backing.

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A reseller account, or one dedicated server, virtually not advertising budget, is what many hosts started out with, yet they have survived, and even made a name for themselves.
The IRS defines this as a hobby. A person can make a lot of difference; however, money pays the bills. If your serious about your business and your clients then it will be a full time job and you'll have the cash to make sure your not swallowed if clients don't pay their bills.
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  Post #20 (permalink)   05-09-2009, 05:14 PM
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I think you could survive on less of an investment than most brick and mortar businesses, but the devotion still needs to be there. The odds of surviving on a limited budget intensifies the need to be aggressive - if you hope to turn to a profit. Being a successful small business owner requires hard work, and a sense for making good business decisions.
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  Post #21 (permalink)   05-10-2009, 04:11 PM
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Google "Free eNom" account that has helped many of my resellers get started.
 
 
 


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  Post #22 (permalink)   05-11-2009, 01:59 PM
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Free eNom Domain reseller account?

You can find it almost everywhere. But you just get account for free, however you still need to load minimum $100 as Deposit.
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  Post #23 (permalink)   05-12-2009, 09:05 AM
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I know a number of entrepreneurs who used the equity in their homes to fund their new business. One in particular grew from a husband and wife venture to buying out a department of a huge firm - then onto building their own buliding. There certainly are risks, but you can be successful in this industry.
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  Post #24 (permalink)   06-10-2009, 02:27 AM
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Do not overlook the money to live on and the feed the family, if you have a family.
I would say project a budget to maintain the company for 1 year and add to that the amount you need to live at the standard that you are comfortable with.
Then finally add to this amount, focus and hard work.
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  Post #25 (permalink)   06-11-2009, 09:56 PM
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It all depends on how much cash you want to invest and how wisely you invest it, if you have $100 to start then you need to start as reseller hoping that you upgrade your business to a dedicated server later when you have enough customers. If your budget is $10000 then you can start more healthy right away with your own servers.
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  Post #26 (permalink)   06-12-2009, 12:55 AM
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Yep, the amount of money you invest will determine how well your busy will take off, and what you can afford in the begining.
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  Post #27 (permalink)   06-12-2009, 01:27 AM
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Yep, the amount of money you invest will determine how well your busy will take off, and what you can afford in the begining.
Agreed. IMO "how" you invest whatever amount you have is the most important. I've seen many hosts that start with < $500 do great and others with $20k+ burn it all away.. To some degree the less you have the more frugal you must be, but I suspect that things would got much better for those with a large budget if they acted as if they had very little..
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  Post #28 (permalink)   06-12-2009, 03:18 AM
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Agreed. IMO "how" you invest whatever amount you have is the most important. I've seen many hosts that start with < $500 do great and others with $20k+ burn it all away.. To some degree the less you have the more frugal you must be, but I suspect that things would got much better for those with a large budget if they acted as if they had very little..
Exactly...Always do research on anything you spend money on. Research advertising locations, servers, etc.
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  Post #29 (permalink)   09-02-2009, 08:13 PM
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Not to mention so many new hosts are started by 11 year olds lol That could be one reason why they fail.
This post cracked me up! lol! Eleven may be a little young, but I wouldn't be surprised if the majority were in their late teens to twenties.
 
 
 


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  Post #30 (permalink)   09-14-2009, 08:37 PM
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Getting into web hosting can be done on a shoestring budget or one that is much larger. But this business takes time to be successful in. The more you can put towards advertising the better you are going to be. Just remember the old phrase "It takes money to make money"

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