Hosting is a term used in the computer industry for a company that uses their servers and network connections to provide space for your website. In the old days, hosting was an expensive proposition because there wasn’t much competition and the alternative was to set up your own servers and high speed connection(s). Sometime in the 90s a whole bunch of people figured out that there were a few people making a ton on money running hosting companies. See the thing about hosting is that it’s almost all sunk cost. That is, once you set up the basic infrastructure it doesn’t matter whether you’re hosting 1 or 100 or 1,000 websites. So, once you’ve sold enough hosting accounts to cover your costs the rest is pure profit.

Once the price of hardware started to come down to the essentially free level (who’d have thought you could buy a brand new Dell for less than $500?), a lot of people jumped on the hosting bandwagon. Good news for you and me because that means prices come down. And come down they have. In the mid 90’s, I had a hosting account that provided 5Mb of space and 5 email addresses for 1 domain and was limited to some painfully small amount of bandwidth (traffic) after which I started paying by the megabyte. It cost $30 a month. Now there are a lot of companies that offer hosting for less than $10 a month that allow unlimited traffic, large amounts of disk space, and unlimited domains.

At any rate, with the prices being what they are, how can you afford not to have a website? For $120 a year you can add legitimacy to your micro, because on the Internet, with a well designed website, nobody can tell you’re operating out of your mom’s basement. Maybe the price isn’t the problem, maybe it’s that you feel like you aren’t technically capable. Most webhosting companies have addressed that with some sort of software that helps you build a website without ever mucking with any of the goring details. A lot of hosting companies use Site Studio ( demo here), a browser based website creation utility that lets you literally set up a website in a few minutes if you already know what you want to say.

OK, then, what if you’re the cheapest person on the planet and don’t want to pay somebody $10 a month to run your websites? Wouldn’t it be cheaper to get DSL or cable and set up my own server? Maybe even run my own hosting company? NO! Don’t Do It! I worked for a company in the 90s that thought it would be a good idea to jump on the hosting bandwagon. Then they could get other people to pay for their expensive T-1 connection. So they set up a totally inadequate former PC in a spare office and started selling web hosting to local businesses. What they didn’t realize was that running a hosting company is a lot of work. It has to be available 100% of the time. If a piece of hardware fails it has to be able to be switched out—-right now. The short form of the story is that it didn’t work out. If you’re working on internet based businesses, you should be able to expense your internet connection anyway. So cough up the extra dollars.

The importance of a business plan cannot be overemphasized in any business. They are just as important to a micro-business although they don’t need to be nearly as formal. If you are seeking venture capital or financing you’re likely to need a business plan of 50-100 pages. For a micro-business, you shouldn’t need more than 5.

A business plan precisely defines your business and identifies your goals. The basic components include a current and projected balance sheet, an income statement, and a cash flow analysis. It helps you allocate resources properly, handle unforeseen complications, and make good business decisions.

Many entrepreneurs drag their feet when it comes to preparing a written document. They argue that their marketplace changes too fast for a business plan to be useful or that they just don’t have enough time. But just as a builder won’t begin construction without a blueprint, eager business owners shouldn’t rush into new ventures without a business plan.

Before you begin writing your business plan, consider four core questions:

• What service or product does your business provide and what needs does it fill?

• Who are the potential customers for your product or service and why will they purchase it from you?

• How will you reach your potential customers?

• Where will you get the financial resources to start your business?

What goes in a business plan? The body can be divided into four distinct sections:

• Description of the business

• Marketing

• Finances

• Management

Addenda should include an executive summary, supporting documents, and financial projections.

A business plan is a tool with three basic purposes: communication, management, and planning. As a communication tool, it is used to attract investment capital, secure loans, convince workers to hire on, and assist in attracting strategic business partners which are typically not goals of micro-businesses.

As a management tool, the business plan helps you track, monitor and evaluate your progress. The business plan is a living document that you will modify as you gain knowledge and experience. By using your business plan to establish timelines and milestones, you can gauge your progress and compare your projections to actual accomplishments. It can also let you know when when it’s time to shut down a particular venture. Each of your micro-businesses should have a business plan. That way you can compare the time and money you’re putting into each so that when you begin to get squeezed on on or the other you can shut down the worst performer.

As a planning tool, the business plan guides you through the various phases of your business. A thoughtful plan will help identify roadblocks and obstacles so that you can avoid them and establish alternatives. This is particularly important for micro-businesses that are run by more than one person. Having clearly defined roles in critical in these situations.

The SBA has a pretty good section on its website that discusses business plans in greater detail. Just remember that their target audience is small businesses that are looking for financing. Micros just need a short outline to keep everything defined.

We’re going to get into this early because in most cases if you don’t have a website you don’t have a business. This isn’t always the case but you’re going to want to get one pretty quickly.

A domain is the thing you type into your browser window. For instance the domain name here is OrangeIsTheNewBlog.com. Others include  google.com, amazon.com and so on. The most common top level domains in the US are com, org, net and gov which used to stand for commercial, non-profit organizations, network infrastructure and government.  Without getting too specific your domain is your address on the Internet. A domain can affect people the same way a physical address affects how people feel about you and your business. For instance, it’s a well known fact that people are more likely to buy mail order from 123 Main St, Suite 27 than they are from PO Box 27. In the same way people are more likely to buy from a website with an address like www.amazon.com than they are something like www.obviously-a-webhost.com/stores/ mybusiness/ The first is easier to remember and more professional looking.

The great thing about the Internet is that addresses are all the same price… totally unlike 5th Avenue versus South Bronx. If you go to www.godaddy.com they’ll register any available dot com domain for about nine bucks a year. You can spend a lot more but you’ll get exactly the same thing regardless of the registrar (that’s the official title of companies engaged in registering domains) you go to. Godaddy offers other services like email and web hosting but I’ve never used any of those. I do use them exclusively for registrations though.

Regardless of who you use, it’s generally a pretty painless process. On most registrar’s home pages you’ll find a place right near the middle of the page for you to type in the domain name you want. It may take several tries to find one that’s available so it’s a good idea to have a selection of domain names already picked out.

Email has become a fact of life. Many people prefer it to the telephone. It allows you to maximize the use of your time and in today’s world that is a good thing. Personally, I think it’s over-rated for some kinds of conversations. Email is very good for conversations that are of the customer service type, ie. “Do you carry roses?” “Yes, we do.” Email would not be so good for conversations that require a lot of explanation such as the initial phase of a custom house design. After the plans had been more or less finalized email would again be a useful tool for communicating.

If you’re going to use email as a part of your business strategy – and you should – an AOL address is not going to provide the sort of professional appearance you want for your business. I recommend you register a domain and set up one or more email accounts using that. In the old days it was trickier to do something like that than it is now. Now it’s so easy there’s absolutely no reason for anybody not to have a personalized email address.

I’m not going to go into a bunch of detail about how email works. I’ll assume you already know that (if not there’s an excellent tutorial here.

I use GoDaddy because 1) they’re cheaper than just about anybody else and 2) I’ve never had a problem with them. Fortunately if you don’t want to set up a website at the very beginning (but I recommend you do as soon as possible) or yours is a micro-business that doesn’t require a website (I’m not sure what that might be) GoDaddy also has email hosting plans that are as little as $10 a year. So for about $20 a year you can trade in that AOL address in for an email address that’s every bit as professional sounding as ibm.com

I’ll have a post about email marketing in the coming weeks and I suggest you read that before you venture into that arena. Some people who are perfectly fine with pulling 20 pieces of junk mail out of their mailbox and tossing them in the trash become absolute crusaders when they get spam (an internet term for unsolicited commercial email). You can lose your email account, have your isp account cut off, and even in some instances go to jail for sending out spam. Know the territory.