Keys to Managing Your Reseller Business

While the business of being a reseller of Web hosting services might sound easy at first, its important to remember that it is still a business like any other. It therefore requires financial planning, a sound exit strategy, and an understanding of legal obligations, among other things. And while it can seem rather overwhelming at first, it is important to implement good business practices in order to ensure that your company is manageable.

Let Rackspace make the difference with reliable managed hosting solutions backed by Fanatical Support.™ 100% Network Uptime Money-Back Guar., 1-hour hardware replacement, 24/7 LIVE, MS and LNX certified technical support.

Perhaps the most important thing to have is a good exit strategy. Many people might think that this is just for insurance, in case the business doesn't succeed. On the contrary, it is much more, and something that should exist from day one. If you ever decide to seek venture capital, an exit strategy is indicates to investors that you are interested in ensuring they receive some return from their investment. An exit strategy not only provides for a worst-case scenario in which the company goes belly-up and all assets have to be liquidated, but also provides goals for the company.

An exit strategy will take into account the personal, business, and investor goals for the company. Exit strategies can include going public on the stock exchange, merging with another company, or a buyout.

Once you've established an exit strategy, you will need to find a Web host that is conducive to growth and success. Here, research is absolutely essential. The reseller needs to make a list of all of the services it will offer, and then go hunting for a host that fits the bill, both in services and price.

Partnerships are also essential to a well-managed business. A small reseller host that tries to offer absolutely everything in-house will ultimately become overwhelmed without proper management - therefore, it's important to decide on services that your business can and cannot handle. Ideally, you should choose one service to offer, and then specialize in that service; once the company is larger, it can offer more in-house. By partnering with other companies, the reseller can offer a wide range of services without straining its resources.

Also be sure to retain legal counsel when you first launch your business, as it might save you money should you eventually decide to execute your exit strategy. Not only will they help you establish good business practices, but will assist you in drafting a Service Level Agreement (SLA). Most Web hosts have an SLA, and many resellers are expected to offer them as well. An SLA is actually beneficial to both sides; it allows them to protect themselves from each other.

Keeping with legal issues, both hosts and resellers must be sure to keep a close eye on content and copyright infringement. Knowing what content to watch out for is a Godsend for smaller reseller hosts, who don't usually have the resources to survive the fallout of a major lawsuit.

A well-managed hosting operation will also provide top-of-the-line customer service. Good service is crucial in any line of business, and regardless of whether your hosting firm offers full technical support, you should be very careful to offer the best customer care possible. Good customer service will most likely be the single most powerful driving force that allows your reseller operation to grow.

Finally, a good business learns from history. If the dot-com fallout is any indication, the old economic model is still the one to follow. The best way to ensure continued growth is to be cautious when necessary, never overextend yourself, and understand what is happening around you.