Gil, I am not running a web hosting company myself, but I had many opportunities to do so. These opportunities are the same stories as I heard it from a lot of other people. I happen to know quite a few small business owners in my area where I live and they know I am interested in this subject, so when they decide to take their business/presence online, they would always ask me for help/directions.
A good chunk of those people were ready to pay me to organize the process and pay me to host the sites (for them its just easier to do it), so if I were to operate a firm myself, I would get my first clients through direct interaction with friends and acquaintances.
I guess the best move for any web hosting reseller is to market locally. People would be more comfortable hosting with you because you are near them. A lot of times those who are not familiar with the industry choose to deal with someone from their town thinking they "host" your business here as well. Little do they know that often their websites are hosted on servers across the continent.