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Claire Broadley
Claire is the founder and CEO of Red Robot Media, a UK-based content agency. Her areas of expertise include online privacy, the internet, and consumer technology.

Last Updated on March 20, 2019

If you’re looking for small business website hosting, you have plenty of options to choose from. Shared hosting is inexpensive, which is why it’s a good choice for small businesses and start-ups.

This guide covers everything you need to know about shared hosting and tells you the questions you need to ask when choosing a plan.

What is Shared Hosting?

Shared hosting is a type of web hosting where a single web server is shared between many hosting customers. Software on the server determines which website to load, based on the URL that the visitor requests.

This is a very efficient way of providing hosting, and it means hundreds of websites can co-exist comfortably on the same physical server.

If you’ve already researched shared hosting, you’ll know that competition is fierce, and many of the plans look the same at first glance. Don’t be fooled by jargon that’s aimed at getting you to buy an expensive plan. For many small businesses, a cheap hosting plan offers everything you need to get your first business website online.

Laptop computer and headphones

Hosts can offer shared hosting at a very low price, and it’s ideal for small businesses that don’t have a lot of cash to burn. You don’t even need to sign up to a contract with many hosts; you can simply pay month-by-month once you’ve signed up.

There are multiple ways to “share” a server in web hosting. For example, a VPS hosting package involves splitting a server into several virtual machines. But shared hosting is different. Customer accounts are securely separated from each other, but they all share the same operating system. This offers a number of benefits for both users and hosting companies — along with a few downsides, too.

How Shared Hosting Works For Users

Shared hosting is the cheapest and simplest type of web hosting on the market. The majority of small businesses start off with this type of hosting, since it offers flexibility with very low overheads.

Even though shared hosting is technically the least powerful type of hosting, it’s more than adequate to run a small business website in the beginning, unless you need to run a very resource-intensive website. If you just want to set up a WordPress blog, shared hosting will provide everything you need.

Woman using laptop

In terms of functionality, shared hosting gives you some of the features of a more expensive hosting package, like the ability to install a range of different scripts. You’ll almost certainly be able to create email addresses, databases, and use the analytics tools your host provides to see how your website is performing.

Limitations of Shared Hosting

That said, shared hosting does have restrictions:

  • Hosting companies will not allow installation of certain scripts because they take up too many resources; one resource hog could slow down the entire server, affecting all of the other customers’ sites.
  • Some scripts require root access to the server, and this is not offered on shared hosting; you’d need a minimum of a VPS to use that kind of script.

But don’t focus too much on the negative points. The benefits can outweigh them.

Benefits For Small Businesses

For users, shared hosting offers a number of advantages that make it ideal for startups and small businesses in their early days:

  • Low monthly cost. You can get your website online for a few dollars a month. Your hosting plan will be compatible with many free scripts, too, so there’s very little investment needed.
  • High capacity. While “unlimited” claims should be viewed with some skepticism, resource on most shared hosting plans is more than adequate for small business websites. (We’re going to look at “unlimited” shared hosting later in the article.)
  • Ease of use. Hosts design shared hosting to be accessible for users who have little technical experience. There’s a learning curve, sure, but hosts provide lots of help and support to get you started.
  • Technical support. Exact support arrangements vary from one host to another, but you will get some kind of support with shared hosting. If you dive right in and purchase a VPS or a dedicated server, there will be more technical barriers, and the host will expect you to be more self-reliant.
  • Flexibility. You can install a CMS like WordPress on your server, or you could use a site builder if your host provides one. Alongside it, you might want to install a forum like phpBB, a bug tracker like Mantis, or SugarCRM to manage your sales leads.

Shared hosting isn’t perfect for all small businesses. For example, a site with a huge community forum could cause performance problems for other customers so that might not be permitted.

But shared hosting is perfect for a small website that doesn’t receive huge amounts of traffic.

How Shared Hosting Benefits Hosting Companies

Shared hosting offers massive economy of scale for a web hosting provider. That’s because it’s a very efficient model; the host can place hundreds of customers on the same server with the same IP address, so they don’t need lots of servers to get those customers online.

Servers in a rack

Beyond the monthly cost of hosting, hosts make more money by up-selling extra services and nurturing long-term relationships with shared hosting customers.

For example, a growing website may begin to exceed the fair use clauses in the host’s terms. At that stage, the host will try to convert the customer onto a more expensive hosting package.

They may also sell them additional bolt-ons to enhance their hosting, such as security packages, SSL certificates, or web design services.

Shared Hosting: Everything You Need to Know

Now we understand how shared hosting works, and why it’s a good choice for small businesses, we can look in more depth at the technical side and the features that you should look out for.

Here’s a guide to some of the technical terms you’ll encounter as you shop around for a small business host.

Operating Systems

Most web hosts provide shared hosting on a Linux platform. Linux forms is the “L” in “LAMP stack,” which you’ll see in many hosts’ marketing literature. LAMP stands for “Linux, Apache, MySQL, and PHP.” Those four ingredients allow you to use the majority of popular scripts.

The exact Linux variant varies from host to host, but for most customers, the “flavor” won’t matter.

Linux is a great choice for a small business:

  • It’s generally very secure (providing it’s well-maintained)
  • Most of the scripts that small businesses find useful are designed to run on Linux, so you won’t run into any issues if you want to try them
  • The Linux variants that hosting companies use are free, which brings down the cost of the service.

Windows, FreeBSD, and Others

Windows shared hosting is less common than Linux shared hosting, but many hosts do sell it.

As you compare packages, you’ll notice that Windows shared hosting is more expensive than equivalent Linux plans. That’s because the operating system has to be licensed; it isn’t free like Linux. The same goes for some of the software it runs.

For some very specialized applications or languages, only Windows will do. But if you don’t have a particular reason to choose Windows shared hosting, we advise choosing Linux for greater flexibility and lower pricing.

There are a few other operating systems in the shared hosting market, including FreeBSD and Mac OS X. But remember: you don’t need to choose the same operating system you use on your computer. So if you have a Windows computer, you can use Linux shared hosting. Likewise, if you own a Mac, you can use Windows hosting.

Unless you’re planning on developing software to deploy on your hosting account,  stick to the cheapest and most flexible option.

Cost of Shared Hosting

Shared hosting is the least expensive type of hosting. Expect to pay a few dollars a month for a basic plan. If you locate a referral link or a coupon, you may be able to achieve further discounts on the advertised price.

$5 bill

Some specialized plans cost more. For example, you can purchase managed WordPress hosting, which is optimized shared hosting that’s designed for running WordPress and nothing else.

Again, if you don’t have a clear reason for spending more or going for a niche plan, stick with the cheapest general-purpose package at first.

As with any small business product, there are hidden costs with some hosting packages, which is why you need to look at hosting reviews before you buy. For example, some hosts only offer basic support for shared hosting customers and charge extra for a “premium” support package. Others might skimp on the money-back guarantee, or present you with a huge bill if you need to actually download your “free” site backups.

Final point: most hosts do not charge a set-up fee, but they may deduct certain costs if you leave.

Why the Customer Ratio Matters

The exact number of websites on a single server varies according to hardware specifications. But it’s common for one server to be split between many hundreds of customers.

There are obvious risks to this kind of hosting model. A few resource hogs could cause issues for the rest of the customers on a server, which is why so many hosts keep close tabs on customers’ resource usage:

  • If a host spots one account using more than its fair share of server power, the host should ask that customer to upgrade to a more expensive plan
  • All good hosts will have a track record of actively monitoring shared servers and taking action when other customers are impacted by poor performance.

However, there is a risk that your site will be slow if the customer ratio is excessive. And at peak times, the impact on the speed of your site could be very noticeable indeed.

This is why it’s important to look at hosting reviews. You can pick out hosts that show signs of packing too many sites onto each server, and disregard them before you research further.

What is Overselling?

Overselling is a standard practice in the shared hosting market. It describes the practice of allocating more resources to customers than a server can technically supply.

Hosts oversell because they know that shared hosting customers rarely use all of their available resources. Most will run a small website that doesn’t require much processing power or file storage. So the host can essentially allocate more space than it has.

Overselling keeps prices low, and it ensures that the host doesn’t waste resource by having servers sitting idle. But an oversold server can be a risk to your business:

  • If one server contains multiple accounts that approach their resource limits, others will start to feel the squeeze
  • A crowded server can begin to struggle to serve requests. This manifests itself as slow speed or even site downtime
  • If you suspect that your server has been oversold and you’re experiencing ongoing issues, your host may move you to another shared server if you ask. If they won’t move you – and they aren’t obliged to – there isn’t much you can do except move or upgrade to a VPS.

Why Server Location Matters

Some shared hosting providers offer a choice of server location. This choice might be available at the point of purchase, but you may have to pay to choose a location other than the default.

But paying a little more for a server location close to your customers could be a smart move.

When you’re running a small business website, speed matters. If your server is located on the west coast of the United States, and your customers are in London, the pages will load more slowly than they would if the server was in Europe.

Pins on a map

It’s a simple case of the data having to travel further. Those milliseconds add up fast.

Speed is a factor in conversions, user experience, and search engine rankings. Even a half-second can have an impact. So if you have the option of choosing a nearby server location, it’s a smart idea to take up that offer.

Not all hosts give you the choice of server location. Some don’t tell you where their data center is at all. That’s a good reason to shop around, particularly if your customers are located outside the United States.

Unlimited and Unmetered Resources

Many hosts don’t place a cap on the bandwidth or disk space that you’re allocated. Instead, they’ll promise “unlimited” or “unmetered” usage.

Clearly, no host can offer everyone infinite resources. What does this really mean?

Hosts offer unlimited and unmetered resources because they know that most customers use very little disk space and bandwidth. A typical small business website doesn’t really need much power.

So the promise of unlimited resources is based on the assumption that you’re a typical customer that won’t use many resources anyway. It’s essentially a way of making plans look good on paper.

Almost every host that offers unlimited hosting will have a clause in their Terms of Service about acceptable usage. If the host considers your resource usage to be extreme, they will terminate your service, take your site offline temporarily, or (most likely) ask you to upgrade to a more expensive plan.

Choosing a Control Panel

When you buy shared hosting, you will receive a login to your account and billing area. You may also receive a separate control panel login, but some hosts combine both into one account management panel.

Knobs and dials

On shared hosting, you don’t have to pay extra for your control panel software, but you won’t be able to choose which one you get. That’s why checking reviews is crucial when comparing hosts against each other.

Why the Control Panle Matters

Control panels vary considerably in their features, complexity, and functionality. And the control panel that your host provides could be either a benefit or a massive limitation.

Some hosts offer third-party control panel software. So if you move from one host to another, the functionality will be broadly the same. There are a number of potential benefits to this, including:

  • Familiarity with the features in the control panel
  • Easy export and import of data from one host to the other
  • Retention of the same features across more than one host
  • Free migration from your old host to your new one.

When the host offers a rare or proprietary control panel, it becomes more difficult to migrate hosting settings, mailboxes, and databases. In fact, you may find that it’s impossible. But some hosts argue that custom control panels let them optimize their service much more aggressively.

On Linux servers, cPanel is arguably the most prevalent control panel, with Plesk coming in as a close second. If your host has its own proprietary panel, there’s nothing wrong with that, but it may make a future move to another host difficult.

Free Domains – Is There a Catch?

When you sign up to a new hosting plan, your host may bundle in a free domain name. Before you sign up, check the terms carefully.

Your free domain will be registered along with your hosting. Some hosts will continue to renew annually if you stay with them, but others will expect you to pay after the first year.

Their renewal pricing may be considerably more expensive than competing registrars.

So before you take up a free domain offer, check whether you can move it to another registrar before it’s time to renew.

Additionally, check what happens to the domain if you cancel your hosting. The host will almost certainly deduct the cost of the domain from any hosting refund that you get, but it’s also critical that they will allow you to take the domain with you. Some will charge you a hefty fee, while others may keep it and let it expire.

One-Click Installers

Shared hosting customers can install any script that’s permitted by their hosting company and compatible with their server hardware. But this involves complicated installation procedures.

One-click installers offer a useful shortcut, so you can get an application up and running quickly without having to learn to install things manually.

Code

Whether you install a script manually, or you use a one-click installer, the end result is the same. There may be some minor technical differences in the way the application is set up, but you won’t notice these in normal use.

So if a one-click installer is provided, it’s generally good news.

Shared Hosting vs. Other Types of Hosting

Shared hosting is not the only type of web hosting available, and if you have begun to look into different web hosts, you will have seen many options available. In this section, we will briefly cover how these options are similar to and different from shared hosting.

Virtual Private Server (VPS) Hosting

Virtual private server (VPS) hosting is similar to shared hosting in that multiple websites are placed onto a single, physical server. However, what justifies the pricing premium commanded by VPS plans are the following:

  • There are fewer sites on the server
  • The resource allocations are strictly enforced

In a shared hosting plan, you can think of the server’s resources as a communal pool from which any website on that server can draw. If your site sees a traffic spike, it can monopolize a larger shared of resources. However, this leads to there being fewer resources for other websites.

Defined Resources

With a VPS plan, you will know (up front) how much of the server’s resources are allocated to your site alone. The web host then enforces this strictly. While this means that your neighbors cannot utilize your resources, this also means that your site cannot draw from others’ resources if there’s a surge in traffic.

Greater Level of Control

Finally, VPS plans tend to get you greater control over your server. With shared hosting options, you might be limited in how much you can change on your server — for example, if you find that your website needs support for a specific language, yet your web host doesn’t have that language installed, you may be out of luck.

Dedicated Servers

Dedicated servers are those where the entirety of the server is devoted to hosting your website. Everything is used to serve your website, and you have full control over the software installed.

Dedicated servers are the complete opposite of shared hosting, both in terms of resource allocation, control over the server itself, and price (dedicated servers are the most expensive type of hosting around).

WordPress Hosting

Sometimes you will see web hosts offering WordPress-specific packages.

Technically speaking, WordPress hosting can be of any type (e.g., shared, VPS), but they are most likely shared options with a few changes designed to make the management of a WordPress-based website or blog easier.

By opting for such a plan, you will get hosting guaranteed to support WordPress, as well as extras like one-click WordPress installation (in some cases, WordPress might come pre-installed), themes, and plugins.

Managed WordPress Hosting

Finally, some hosts offer what is called managed WordPress hosting. The details on what such options include vary from host to host, but generally, these packages come with things like automatic WordPress updates, dedicated support, and so on. The goal of these plans is to minimize the amount of work you have to do to manage your website.

Cloud Hosting

Cloud hosting can be of any type: shared, VPS, or dedicated. The only difference, however, is that your website relies on a network of servers, rather than a single physical server.

While cloud hosting tends to be more expensive than traditional hosting, you get added benefits like failover protection. This tends to make cloud hosting more reliable.

How to Compare Shared Hosting

The shared hosting market is incredibly competitive, which is great news for small business customers. So how do you choose between two plans that look almost identical?

How Will You Create Your Website?

This is the most crucial question. There are many ways to create a small business website:

  • Do you plan to use WordPress? If so, you can choose practically any Linux hosting plan. But you might want to consider managed WordPress, which is the “luxury” option.
  • Are you willing to experiment and learn? Site builders are the best solution for non-technical people that don’t want to deal with anything under the hood. While most hosts now offer a free site builder with their shared hosting plan, the limitations of free site builders vary considerably. Growing a site on a site builder plan gets expensive fast.
  • Do you have a website developer? Ask them how they’ve developed your site, and if they need any special features to make it work.
  • Do you need to integrate with Windows? If so, you definitely need to start with a Windows shared hosting plan.

Will Shared Hosting Be Fast Enough?

Site speed is critical when you’re setting up a business, and you want your customers to enjoy browsing your site. It’s particularly important for e-commerce websites where customers will be hopping quickly between pages:

  • Where are most of your customers located? Look for a datacenter closest to their location
  • Does the host offer SSD storage? This can provide a marginal speed benefit for busy sites
  • Does the host offer a free CDN? A CDN can speed up loading times considerably, and having it built-in to the hosting plan makes life easier.

How Will You Get Support?

Small business websites need to be online all the time. Even a small outage can cause a loss of earnings:

  • What’s the uptime guarantee? Most hosts advertise 99.9% but examine the compensation terms carefully. Some hosts offer no guarantee at all or a woolly guarantee that offers no compensation for downtime.
  • What support does your host offer? Not all of them are open 24/7. If they’re in a different time zone, they may not be open during office hours in your time zone, when you need help the most.

Can You Easily Move Your Data?

You might want the freedom to try different hosts, or move your data to a new provider if your first choice doesn’t work out. Check the host’s features carefully:

  • Which control panel is offered? It’s challenging to move data seamlessly from mismatched control panels. If in doubt, cPanel is the safest choice.
  • Can you export data from your site builder? The vast majority don’t allow this; proceed with caution.
  • Does the host offer a money-back guarantee? Some hosts will give you your money back at any time during your contract if you cancel. Others have no guarantee period whatsoever.

Shared Hosting Providers

If you are not sure where to start when it comes to shared hosting, take a look at any of the following providers. All are major companies that have served a large number of customers, and even if you decide that none of these companies are right for you, you will be able to get an idea of what is available and what options you can choose from when you are finally ready to purchase.

Bluehost

Bluehost is a well-known provider, especially among those who use WordPress. The company offers a wide array of web hosting options, with three different shared plans from which you can choose.

GoDaddy

GoDaddy offers everything you could possibly need for a website, including web hosting, domain name registration, productivity tools, security suites, and so on. The company offers reasonably priced web hosting options, and if you want a one-stop shop for all things related to your site, you cannot go wrong with GoDaddy.

HostGator

HostGator aims to provide easy and affordable web hosting. While the company offers a full range of web hosting products, its shared plans are excellent for its ease of use. Furthermore, the company boasts top-notch customer service, so if you ever have any issues, you won’t have problems getting help.

InMotion

InMotion is very similar to the other companies listed in this section in that it offers a full range of web hosting options. However, what makes the company stand out are its Managed Hosting and Premium Support add-ons. These professional services can be useful, especially if you are looking to outsource the maintenance and management involved.

SiteGround

SiteGround offers top-notch plans that would work well for pretty much any type of user, but it is important to note that all plans come with managed WordPress services by default. Furthermore, all plans come with premium offerings (such as enhanced performance due to up-to-date servers and SSD drives).

The company takes security seriously, is GDPR compliant, and offers great support to all its customers.

Summary

For small businesses, shared hosting offers the perfect balance of features, low pricing, and flexibility. Almost every hosting provider has put together multiple packages suitable for WordPress websites, or small e-commerce stores.

If you know how you want to build your website, it’s much easier to narrow down hosts you’re interested in. You can then compare features and fine print between your shortlisted hosts to find the perfect plan for your small business website.