How Web Hosting Can Unlock New Profits For Your Web Design Business

How Web Hosting Can Unlock New Profits For Your Web Design Business

Web. Hosting. Those two words can add up to more revenue for your freelance business or web design firm. The truth is in the numbers: every day tens of thousands of domains are registered. Websites are built every day, and more ideas are being conjured up as you’re reading this. What does this mean for you as a web designer? It means business.

If you have been making a living as a web designer, chances are you’ve been able to determine how long it typically takes you to complete a website. This is your sales cycle. If it takes you an average of 20 hours to complete a website for a client, a full work week means two websites completed each week, for a total of eight websites each month.

In essence, you are caught in between doing two things 1) the work, and 2) landing new clients. So, the only way to make more money is to sell more websites. You can also bill clients more on each project, but the fundamental issue still exists – you’re always having to sell, sell, sell!

And let’s not forget the work.

Turning web hosting into another revenue stream for your web design business

With the example we’ve outlined above, you would be designing eight websites each month. If we set the average cost of a website at $1000, you would be making $8,000 per month.

If you make $8,000 per month, you make $96,000 each year, and acquire nearly 100 new clients – 96 to be exact.

Here’s how making one small change in your web design business can make you a ton more money.

The answer: host your clients’ websites.

Again, following the example above, if you hosted your clients’ websites yourself and charged $15/mo. for web hosting services you would make an extra $17,280 per year! That’s almost $1500 each month, recurring income. Even if only half of your clients take you up on your web hosting offer, you still add an extra $720 to your business – and this is money you can count on rolling in each month.

There’s more to the story

Of course, it’s never really that easy. You may charge significantly less, or quite a bit more. The only effect this would have on your burgeoning web hosting business, would be the rate of customer acquisition. The more websites you are completing each month, the more hosting customers you gain.

There are other matters to consider though. If you decide to take on clients’ web hosting needs, you’ll need, at the very least, a basic understanding of server management. You should be more than comfortable with managing cPanel accounts, transferring sites, and handling backups.

Things happen

When problems arise, you’ll be the one being woke up at 1:34am on a Saturday morning. You’ll be the one they call when they have a WordPress error that causes their site to go down. You’ll be tasked with keeping server hardware updated and secure. In essence, this can become a job in itself.

The question you have to ask yourself is: can I manage this?

Profiling your customer based on needs, yourself on experience

The answer, in part, lies in the type of customer you service. Who is your typical client? If you work with corporate customers, large ecommerce sites, or forums, you’ll have to take extra care recommending the appropriate hosting solution. The last thing you want to do is launch a spectacular site, just to have it go offline over server or bandwidth issues.

Customers who require highly technical hosting needs will be more difficult to deal with if you are not well-versed in managing a server. This type of hosting will also certainly require more of a time commitment on your part. One potential pitfall is that if problems arise and are not handled quickly and effectively, the relationship you’ve built with your clients can be damaged. The key here is to know your strengths: don’t take on more than you can handle.

Small business owners can be great clients

For web designers who work with small business owners, offering web hosting as a value-added service is quite possibly one of the best decisions you can make.

A lot of small business owners usually do not understand what goes into maintaining a website. 

This is the very reason they are an ideal customer for a web designer adding web hosting to their repertoire. What makes them the perfect candidate is this:

  • Local business websites rarely exceed bandwidths or have heavy traffic.
  • Most small business websites take up very little disk space.

Understanding your options: what web hosting option should you choose?

The great thing about setting up your web design business to work like this is the fact that you don’t have to own your own server. All you need to do is team up with a reputable web hosting provider and pay the cost of your VPS or dedicated server each month. If you don’t want to deal with support issues yourself, you can easily outsource this to your host, or opt for a managed dedicated server.

There are essentially three options you have at your disposal. Each one makes you the liaison between your customers and your hosting provider. Take a look:

Reseller Hosting

Reseller hosting allows you to use your allotted disk space to create accounts for clients and host additional domains. You’ll typically have the ability to create cPanel accounts and create your own web hosting packages.

Drawbacks – Reseller accounts have more restrictions in terms of bandwidth and diskspace. You also have less control of the server.

Pro tip: Don’t forget to check out WebHostingHero.com’s Reseller tutorial as well.

VPS Hosting

VPS hosting is the middle ground between shared hosting and a dedicated server. A virtual private server is created when a server is partitioned into separate components, each acting as a unique “server”. You still share the same server resources with other accounts, but the benefit is more control, more power, and SSH access.

Drawbacks – The drawback here is that you may have to pay for client billing software, which usually comes included in most Reseller hosting packages..

Dedicated Hosting

If shared hosting is like living in an apartment, dedicated hosting is like owning your own land. You are the only one on the server. You won’t have to worry about another party draining server resources and affecting performance. While this is the pinnacle of power and performance in hosting, it also requires more knowledge on your part. You’ll need to bring your A-game. You’ll be responsible for maintaining server software and security, among other things. You can always go managed, but this increases your costs.

Drawbacks – Cost. Dedicated hosting is the most pricey option out of the bunch, requires more knowledge, and more responsibility on your part to maintain.

It should be noted that as you grow you’ll more than likely have to upgrade regardless. Where you start has a lot to do with how many clients you will be hosting, the type of clients, and your overall hosting requirements.

Even More Options

If setting up web hosting for your clients is something you do not want to deal with, you can always become a web hosting affiliate and get paid when you refer clients. In either case, the point to consider is this:

  • You can make more money either providing additional services to your clients, or by partnering with other companies that service the same clients, but do not directly compete with you.
  • Your clients depend on you more and you control the site after it is complete. This gives you the ability to potentially charge more for webmaster services and monthly updates.
  • You’re likely to get more word-of-mouth because of how closely you will be working with your clients after the project is complete.
  • It increases the chance they call you for future projects since you’re hosting their site, routinely deal with each other, and are a phone call away.

Much like bloggers network amongst each other to share and promote each others’ content, you too can apply this same principle to business and make more money –  with very little additional work (depending on the route you take).

How are you growing your web design company?

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