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How I Have Made Money Online – Part 3 – Online Services and Web Hosting

In this the installment of my series on how I have made money online I take a look at running my most successful web business, BetterEdit.com, and one of the most popular online business, web site hosting. If you missed the other parts of this series you can read them by following these links:

A Services Web Based Business

That title sounds a bit vague but BetterEdit.com is an example of a services web based business. I’ve talked about BetterEdit.com a lot on this blog and through it and MTGParadise.com I’ve gained most of my Internet business skills.

BetterEdit provides editing and proofreading services to students and business, although presently we are moving towards focusing on only the student niche. BetterEdit is a perfect case study in creating and operating a profitable web based business. It’s too complex to discuss in detail in this article but no doubt if you subscribe to this blog and go through the archives you can get a good feel for how exactly I operate BetterEdit and have experimented with marketing to keep it growing.

A service based business often starts with the owner providing the service. I didn’t go this way although every now and then early on I was tempted since the margins are obviously a lot better when you complete the work yourself. Although I would have been doing my business a dis-service if I did do the editing since I’m not nearly good enough. I’m adequate, but compared to our current staff, not great. Consequently very shortly after starting the business I had a contract editor working for me. This format actually works great because the editor only needs to focus on what he or she does best, editing, and I can focus on client attraction and business management, certainly areas I prefer to work in.

The formula is really quite simple – find a need and satisfy it at a profit. Sure there are a lot of variables to control but when it comes down to it I found a need, hired the best people to satisfy that need and tested which marketing methods work best to find the target audience with that need. The rest is history, and ahh, the present too.

Earnings: I advertise that I make $2000 – $8000 per month from Internet business. It’s true. However note that is not gross profit, that is revenue. I have expenses and I choose to invest most of that money in growth so I don’t pocket the money myself at this stage. I can honestly say that I do generate at least $2000 in sales per month with the highest month so far peaking at just over $11000 (there is a Goods and Services Tax component, 10% to be exact). Things are growing and I’m starting to generate income from other sources, but that’s all the info you are going to get out of me for the moment.

Web Hosting

A quick (…or not so quick) note about web hosting. What an industry hosting is! Every kid is signing up to start a web hosting business, spending the $10 per month required for a reseller account and then promoting the crap out of their template designed hosting site. I was one of those kids not too many years ago.

Hosting is by far the most saturated industry online and yet I still wholeheartedly endorse anyone starting a web hosting business. Why you ask? Because you can niche your market locally and work your network contacts to get new clients. If you play your cards right and cull the not profitable pain-in-the-ass clients you have a nice income source. Most people build a website and let it sit there and for that you can collect a $50-$200 a year or more per client. Multiply that by 100 and you have a pretty good living. Plus you can market things like search engine optimisation, online marketing, domain names, PPC advertising (AdWords and Overture) and a whole host of additional services (pun not intended).

Remember too that despite the web hosting business being saturated the demand for websites is not going to stop. The Net is becoming one of the most important commerce and marketing tools around and more and more people are going to want to be a part of it. If you can service your 10 friends-of-friends word of mouth should keep you growing.

Ironically though I don’t think web hosting is a good business to market online unless you are the only player in your area. Yes nicheing your market can work, especially geographically or industry based (Brisbane’s best band hosting service for example if you are well entrenched in the music scene with contacts), but the thought of being another webhost in a sea of millions is not a prospect I liked and hence I stopped operating my business. I also hated that every client wanted a web site built for them too and that was certainly not a service I wanted to get into. However if you are a web designer then web hosting is definitely a service you should be offering for some nice recursive income.

To be successful at web hosting you must become that “reliable web hosting guy/girl” in your area that everyone refers to. Don’t expect to get random clients signing up online, that’s not an easy strategy to work since another million copycats are out there doing the same. I’m not saying it’s not possible, but you have your work cut out for you if online visitors can’t distinguish your hosting service from your competitors.

I still have a few clients from my web hosting days. Occasionally I send out an invoice and collect my cheque and every now and then I get a support email with a password request or similar. Web hosting is a great business if you love the web and love dealing with customers (which I think there are maybe like 5 people in the world that do). If you can handle the support and have the tech skills to keep things running then web hosting is a good first choice Internet business or part time occupation for some extra income. Heck I’m starting to convince myself now…

Earnings: Nowadays I bring in about $1000 per year from the handful of clients I still have but they are slowly leaving me. All of them came from friends or family referrals. A few years ago I had about 10 clients paying between $50-$250 per year and I was at one point planning on growing that to 50 clients as my main business. I stopped because I got sick of building websites and doing server migrations. If you have ever had to move 10 domains from one server to the a new one you know what a nightmare it is. I enjoyed other web projects more so I stopped proactively marketing myself as a web host and yet I still get one or two new $50/year clients coming in every now and then.


That concludes my roundup of how I have made money on the Internet. I’m still experimenting now with other methods and no doubt I will start another crazy business website that may or may not go anywhere (writing articles like this always gets the idea juices flowing). Note that in every method mentioned in this article series where I have made significant money it’s been because of a lot of persistent, consistent work and I’ve been lucky starting the right project at the right time. The trick is to keep trying ideas you believe in by taking action and building something.

You can read the other parts of this series here –

Web Entrepreneur

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