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It seems that nowadays everybody and their grandma sells services. Don't get me wrong, I'm the first one to believe in good competition and I defend this principle firmly. Nevertheless, there are people who think that they can start a business without knowing the first thing about developing and maintaining a business.
Those who surprise me the most are the ones that offer hosting services at ridiculous prices. You can find people offering for $1 a year. Yes, you read right: one dollar for an entire year of service. If you consider that the prices of established providers go from $60 to $100 a year for a basic service, this will sound very attractive. But is it really?
Let's do some simple calculations. Lets say a provider gets 1,000 clients, a reasonable number for a small business. If this provider sells his services at $1 each, then he will have the fabulous amount of $1,000 in a year. Do you think that he will be able to offer quality services, support and upgrades at this amount? I am hard pressed to think he will have enough for food alone!
"It can still be a good business if you get enough clients," some will say. Ok, just because I'm in a good mood, let's continue with this example. Imagine this provider-for-a-dollar can get 10,000 customers (a very ambitious goal). Then it's $10,000 dollars of income. Sounds better, doesn't it? However, do you think a business can make it with this income for a year? Just imagine the cost associated with servicing 10,000 clients. Just the cost of rent, phone lines and power would be enough to deplete this small income.
As ever, the human mind is marvelous and searches for a solution. Clients that buy these services reason that if they get the deal for a year, it doesn't matter if the provider goes out of business next year (which is most likely). They already got the service almost for free. Again I ask, is this true?
If your provider suddenly goes out of business, you will no longer have access to your services, and you will lose your email addresses and your web site. Even if you have your domain registered with another provider, you will not be able to get a new service for at least a couple of days in the best case scenario. That's only if you didn't make the mistake of getting your domain name with the same provider. In that case, you may even lose your domain name and will have to get a new one. Imagine the time wasted just notifying all your clients about your new email address. What if you lost important emails and documents too? Do you think this is worth the risk?
When you buy your next service, consider the support services, the promptness in answering your emails and phone calls and the time the provider has been in the market. Yes, do check the price too, but if it sounds too good to be true, it may be a good idea to look somewhere else.
But if you insist on getting one of these services for a dollar, we will be happy to help you when your provider disappears. Let's hope the damage isn't too bad.
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