Why You Shouldn`t Become a Web Host - Where’s the Money?
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Any business is going to need some start-up capital. That comes out of your pocket and the pockets of those you can convince to invest. You need this before you open your doors (figuratively or literally) to your first customers. You might not need too much at first: a domain name, a website, the cost of a reseller package, and so forth. But costs will mount as you continue, especially as you make the effort to look polished and professional. You may well find that you have to go to a bank to secure a loan, possibly even take out a second mortgage on your house or run up painfully large credit card bills.
That’s just one part of the equation. How are you going to produce income for your business? Do you know how much you need to charge customers and what kind of web hosting packages you need to set up to turn a profit? If you’re offering free web hosting or low-cost web hosting in exchange for advertising, do you know how much money you need to make from advertisers? This is one part of the business you can’t afford to fill with pipe dreams. Do your research!
While we’re on the topic of money, are you certain that putting your money into your own business really is the best investment? In economic circles, this is referred to as “opportunity cost.” What didn’t you spend that money on so that you could spend it on starting a web hosting business? Would you get a better return by putting that money into a retirement account, with compounded interest? That’s just one possible alternative; think about the income you’d be giving up on the money you’re putting into this business.
And speaking of income, how long do you think you’ll be able to last without much of one? If you’ve spent most of your adult life getting a regular paycheck, starting your own business will be an eye-opening experience. You’re not getting that wonderful deposit every other week anymore, but your creditors will still want you to pay them just as regularly. If you can get your business started while you’re still employed, that will help, but the very nature of a web hosting business may cause it to intrude on the work time of your “day job.” It’s not a long term solution if you’re serious about making your business more than just a hobby. You may also find that you actually net less money as a business owner than you did as an employee.
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