That’s why I’m changing my business model.
For a number of years I’ve run a hosting company. The products and services are exceptional, great value and I can take pride in what I’ve created.
However, hosting is not expensive (to the customer). The cheapest we sell is £36/yr. Yup, per YEAR. I’ve spent more than that on a single night out. If you want something a bit meatier, for your business maybe it’s £60/yr.
We charge in quarterly instalments and I’m sick of chasing payments of £9.
It gets even sillier when discounts become involved. The margins on a £3/mo package are so ridiculously slim that I simply can’t offer a financial discount without losing money. Why do I do this to myself?
Well. When I started, it made sense. The market was different back then and we had budget hosting cornered. Smaller payments meant smaller losses if a customer left and had more financial stability overall.
I can tell you though that this model simply doesn’t scale. Reseller hosting has always been my most profitable and most rewarding area. I can focus on providing stable, high availability, high quality services to other businesses to help us both grow.
Time to rethink.