Initial Setup to run a web hosting agency, setup web hosting business, work as reseller

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The aim of any web agency or hosting reseller is to develop their portfolio of client websites and applications. Planning for growth with a scalable hosting solution, and finding a long-term hosting partner, is what makes that development as economical and painless as possible. We know, because at Mandoline, we learned the hard way. Here are the challenges, setbacks and successes we encountered on our journey.

Step 1: Initial Setup

As a small startup looking to provide a wide variety of digital services ranging from website design and development to application development and web optimization, we initially just needed to find an easy and affordable hosting solution to get us started.

The challenge

If you are not really tech savvy, or if you don’t know a whole lot about servers and hosting, it can get scary to make a choice of server architecture. As small business owners it’s easy to be drawn to the more affordable “entry-level” solutions. Being on a tight budget doesn’t help to make a clear decision.

Hosting solution #1: 1x “unlimited” Shared Hosting plan
(available from hostgator, funio, 1&1, and many more).


  • Low initial cost
  • Easy setup and administration
  • No need to be IT savvy


  • Slow page load
  • Uneven performance
  • Risk of being shut down if there is a traffic peak (CPU % usage limit)
  • No control over the server

Step 2: Taking Control

No so long after we had started up, we received our first project requiring a small web application in addition to a website. We needed a specific framework to develop this web application, and that’s when we faced one of the major drawbacks of shared environments: the lack of control over the server. After such a short period, we were already in need of a new server.

The challenge

Rather than looking further ahead, we made the mistake of only looking for a quick solution to our current problem. What we should have done is take the time to analyze the needs that we might have in the future, and choose a solution adapted to our goals.

Hosting solution #2: Addition of a VPS server
(available from bluehost, godaddy and many more).


  • Easy Setup
  • Low initial cost for the entry level VPS
  • More control than on a typical shared server


  • You still share resources with neighbors
  • Uneven performance

Step 3: Growth

As time went by we needed more and more resources in order to host our growing roster of websites. But once again, instead of looking for a longer-term solution right away, we kept pursuing the same path towards inevitable limitations.

The challenge

Our challenge was to dissociate ourselves from a hosting solution that was clearly not suited for our needs, even though we had invested a lot in it. We did not meet this challenge! We continued to expand on shared hosting and VPS, finding out the hard way that the longer you wait to get a long-term solution in place, the more it will be painful to switch.

Hosting solution #2 (XL):
Addition of 2 more “unlimited” Shared Hosting plans
Addition of another VPS
Upgrade of the first VPS


  • Familiar with the server setups


  • Our setup was no longer ‘low cost’. Fees we more than 200$/month
  • Our websites’ performance was still very poor
  • We started to have a lot of servers and accounts to manage

Step 4: New beginning

Finally, it started to become very clear that we had made some bad hosting decisions and that we needed to make a step up in order to evolve and offer the right kind of service to our clients.

Most of our more bulky websites were very slow, and this was affecting the conversion rate and other performance metrics, as well as their SEO. We had similar problems regarding our applications, especially on mobile.

We needed better performance on all fronts, so we looked into possible alternatives: cloud servers and dedicated servers (or perhaps even both).

The challenge(s)

Switching from the user-friendly cPanel of a shared or vps server to a blank server can be frightening. To our surprise, we found out that cPanel is actually available on cloud and dedicated servers, which would have made these options a far more appealing choice if we had known. But it can still be a daunting prospect to find the right server when you don’t know much about hardware, which is why we opted for a scalable cloud server (available from iWeb and many more providers).

Hosting solution #3:
A complete shift of architecture in panic mode
1 shared grid system for our smaller websites
Cloud instances for the web applications and bigger websites


  • Scalable environment on the cloud
  • Improved our performances
  • Gave us complete control


  • Required some time to set up

The key to this solution is that we have private servers that we can scale up and out when we need to. Although we chose cloud hosting, the same applies to dedicated hosting (although the servers can only be scaled out in increments of full computers rather than scaled at the computing and storage level like cloud hosting).

The future

One other option that we are looking at for the future would be to transfer all of our websites to amore powerful, fixed-price dedicated server. Although a higher outlay than “entry-level” cloud, dedicated servers are also more powerful, and we could potentially host up to ten time more website on one server than in a cloud environment. At some point it will become more economical to host on a dedicated server than in the cloud, with a better performance to be expected.

Looking back

If we could go back we would probably thing twice before initially putting all of our eggs in the shared basket. Yes, it is less expensive and less complicated. But there is some significant drawbacks and is less suited for a serious entrepreneur and small businesses. Quite simply, it limits the services you can offer to clients, and no one likes to say no to customers.

At one point we were paying 250$/month for our shared and vps setup and the only result was some very poor performance. For half the price we could have chosen an entry level dedicated server as well as scalable cloud servers to suit all of our needs with a far better performance.