Offering a cool deal to save new customers money is good, but keep in mind on what you’re actually doing. It’s okay to make fifty dollars off your clients, it’s not the greatest to make a dime. Remember that it’s not all about the cost, but it’s the quality of your service that really matters. People don’t want to pay $1 a month for a host that goes down every single minute, they don’t want to pay you $20 a month for that kind of service either.
When starting out, you want to charge a minimum of $10 a month on a dedicated server. Stable ones don’t cost too much, but you want to make sure you’re making at least the amount you paid for it back. You need to keep at that price range for a year, seeing if it was really worth the investment. Don’t buy more space until you have maxed out with the amount of customers. People come and go because they find better deals, so even though you might have twenty customers for six months, that could very well be five by the end of the year.
The good thing about web hosting sites is that they’re easily sellable. Once you have at least a few people and find that you’re no longer wanting to go in that direction anymore, you can put it up for sale. People are either wanting to buy your full website, or they’ll want the customers to add to their base. You need to make sure you’re informing your clients about the change though, otherwise it’s bad for the next owner because they could leave after finding out. This could cause revenue cost to you because the buyer will want their money back.
So when offering your services, make sure that you’re providing a reasonable price and don’t worry about competition. Concentrate on what’s your actual limit and the profit you’re gaining from your price. A successful hosting company is one that 1) provides good customer service, 2) has good uptime, and 3) keeps up with the data coming in and out their servers. Keep that in mind!