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A Saample Data Center Business Plan Template
Are you about starting a data center? If YES, here is a complete sample data center business plan template & feasibility report you can use for FREE . Okay, so we have considered all the requirements for starting a data center business.
We also took it further by analyzing and drafting a sample data center marketing plan template backed up by actionable guerrilla marketing ideas for data centers. So let’s proceed to the business planning section.
Why Start a Data Center?
Even though data centers are mostly run by government agencies or large companies, several medium and small scale companies are also going into the business so as to provide a cloud solution service that can be used for private and business applications.
This business is however one that is capital intensive as any entrepreneur going into this would need to procure enough computers and also ensure that where the computers are housed has steady electricity, ventilation and is secure from theft, accidental and intentional manipulation. Also, asides from these factors, there must also always be periodic back-ups in order to ensure that the business remains operable.
To start this business, it is necessary to approach a reputable business consultant who not only understands the industry but also the business very well in order to determine if it would be worthwhile going into the business. The business consultant also points out the obstacles and challenges the business is likely to face and how best to overcome them when it crops up.
Another thing that is important to have before starting any business is a business plan. Writing a business plan might not be so easy, however it is for this reason that a sample business plan has been prepared below – a sample data center business plan;
A Sample Data Center Business Plan Template
1. industry overview.
The data center industry is one is one that has seen several changes come upon it, as businesses operating in this industry have moved from cloud adoption to data sovereignty, which is due to the fact that client companies are getting business smart about their data as well as computer strategies. This has led to operators in the united states of America and even globally to experience growth in revenue as well as round the whole industry.
The state that has the strongest presence in the data center industry is North Virginia, which is due to the fact that they have a low-post power as well as renewable hydropower. Around the globe, operators are eyeing government policies that might require that data centers be housed in the same country from which the data is accessed from which would lead to locations playing a huge influence on the data center industry.
The data center industry has made a huge impact on the power sector in the United States of America as electricity savings have been improved in between the last seven years. This is contrary to the expectations that energy use would increase as more people demand for real-time data which has not been so has energy has remained stable since 2010. Also, according to projections, energy use will reduce as the industry grows which would come from improved cooling and powering strategies and data center micro grids.
Most operators in the data center industry have started pushing for flexibility in their leasing agreements by looking to cut down the standard lease agreements from 10 years to between 5 – 7 years, this is so as to right-size and server reliance.
Data centers usually consume energy that is required that can be used to run a small town. Google Inc for instance had 13 data centers in 2013 round the world which used close to 260 million watts of power which amounts for 0.01% global energy. According to statistics, that amount of power can be used to supply electricity that will power 200,000 homes.
The lifespan of data centers is usually around 8 – 10 years on the average as technologies have been used to determine its lifespan. It should also be noted that cloud computing has also started gaining popularity among service providers; this is because more companies are switching from enterprise data systems to cloud services.
The data center industry has also seen some operators start to use automated network management systems. This automated network management operate physical network configuration, plugs and unplugs physical ports on command prompt from software and also allows physical data center network connections to be managed more quickly and remotely.
According to a recent study by International data Corporation (IDC), it has been projected that North America will provide the highest share of IT spending globally between the period of 2015 to 2019 which has been projected to pass the $1 trillion mark by 2017. In 2015, the data center industry grew to 6.1% with operators in the United States earning $115.6 billion in revenue.
2. Executive Summary
Utech datacenters is a leading and standard data center that will be located in Houston – Texas in order to serve all our domestic and corporate clients here in the United States of America and international clients as well. We are in the data center business to provide hosting services such as shared, VPS, dedicated, co-locative and cloud services. We also in addition to our core services offer consultancy services in line with training services so as to boost our bottom line.
We are in business not only to make profit but to also favorably compete with our competitors here in the United States of America as well as globally. Our vision is to offer our clients a reliable, secure and fast data center regardless of whatever applications they choose to run on our data center. We also aim to be amongst the top five preferred data center here in Houston – Texas by the year 2025.
Our location in Houston – Texas is very strategic as we are not only very easy for clients to get to but we will also have low overheads in running the data center via factors such as power costs, lease costs, sales taxes, property taxes as well as the potential incentives.
We intend to procure the best equipment in order to be able to provide the best services for our clients and run a standard data center here in Houston – Texas. Our goal is also to ensure that we build a business structure that will aid us in achieving our corporate goals and objectives.
Our intention in running a smooth business with as less hitches as possible is to ensure that we hire the right number of employees who not only have an understanding of the industry and are professionals but also are attuned to our corporate goals and vision and are committed to ensuring that these goals and visions are achieved.
We intend to provide a conducive and friendly environment for our employees as well as ensure that they get the required training that is continuous in nature so as not only to enhance their skills and increase productivity for the organization but to also ensure that the skills gotten are the best across similar start-up such as ours in the industry.
We also intend to make sure that our employees are one of the best paid and that they also have one of the best welfare packages in the industry. We intend to carry out continuous appraisals on our employees to ensure that those who are hard-working are promoted in order to motivate them into being more productive.
Finally our owners, Blake Chylds and Rob Branson have not only been in the data center business for years but have also served in the management capacity where they have had to make strategic decisions on behalf of the company. Both men have several IT certifications and are alumni of Harvard University and MIT Engineering School.
Both men also have several stakes in the IT industry and are going into the data center business due to the demand from their various clients. They will bring their over 30 years experience to bear in this business and ensure that the goals and objectives of the business are achieved.
3. Our Products and Services
Utech datacenters will offer traditional data services to its customers that are of the highest standard possible from our permanent and strategic location based here in Houston – Texas. However as part of our efforts to boost our bottom line, we intend to ensure that we create multiple sources of income to our core service by providing consultancy services as well as trainings to our clients.
Our intention is to ensure that we make profits as is legally permissible by the laws of the state where we are operating as well as all over the United States of America. Therefore, some of the products and services we intend to offer at Utech datacenters include;
- Providing hosting services such as shared, VPS, dedicated, co-locative as well as cloud
- Consultancy services
4. Our Mission and Vision Statement
- Our vision is to offer our clients a reliable, secure and fast data center regardless of whatever applications they choose to run on our data center. We also aim to be amongst the top five preferred data center here in Houston – Texas by the year 2025.
- In order to achieve our vision, we intend to ensure that we get the right equipment, choose the right location that is not only strategic but secure and also hire the right employees that understand our vision to help us run the business.
Our Business Structure
Having the right business structure is very essential to the growth of our business and we are therefore not taking this aspect trivially. We intend to ensure that our corporate foundation is perfect and as such we would go the extra mile in sourcing for and hiring competent and hardworking employees to handle the various roles and responsibilities in the organization.
We are ready to do whatever it takes to achieve this as we are a standard company with a standing in the industry that will lure the right employees to come and work for us at Utech data center here in Houston – Texas. The employees we intend to choose to work with us are those that understand the objectives of the business and are willing to work in ensuring that we achieve our intended goals and objectives.
Due to the fact that we intend to offer a wide range of services and offer trainings as well as consultancy services at our data center business, we intend to hire different employees that will be able to handle the different responsibilities from the assigned tasks that would be available at Utech datacenter here in Houston – Texas.
Therefore, the business structure that we intend to build at Utech datacenter is;
Chief Executive Officer
Infrastructure Manager
IT and Database Admin
Network and Systems Admin
Customer Service Executives
Marketing and Sales Executives
Security Specialist
Server and Storage Admin
Electrical and Mechanical System Engineer
Security Personnel
Human Resources and Admin Manager
5. Job Roles and Responsibilities
- Formulates the policies that are used in planning for the strategic direction of the organization
- Manages financial resources by recommending yearly budget and ensuring that the organizations resources within the budget guidelines are in line with organizational laws and policies
- Reviews policies and processes and removes or modifies those that are found to be inefficient
- Responsible for all the IT systems which includes the hardware, software as well as security systems in the organization
- Responsible for ensuring that data is secure the company data-wise and also ensure that the business runs smoothly and efficiently
- In charge of implementing up-to-date solutions across the infrastructure
- Works closely with the systems administrator to ensure that all the database needs are being met
- Carries out an upgrade to the database whenever needed
- Ensure that the security of the database is implemented in order to safeguard the data
- Ensures that the network is designed in such a way as to suit the needs of the organization
- Ensures that the network administration is set up and configured
- Adds new host machines, administers network security and also trouble shoot network problems
- Are up-to-date about relevant trends in the industry as well as organizations policies so as to give clients informed information
- Keeps an accurate database of clients and updates when necessary on behalf of the organization
- Carries out any other duties as directed by the human resource manager
- Carries out communication with target market and also ensure that client relationships are well managed
- Conducts more research on the target market in order to determine new markets for the organization
- Advertises the organization on different platforms so as to create awareness for the organization
- In charge of protecting information from unauthorized violations and access
- Conducts continual tests on systems so as to expose vulnerabilities in security
- Prepares technical reports
- In charge of maintaining and managing the company’s storage-based systems
- Assists in product engineering as it relates to the organizations technologies
- Deploys storage technologies on behalf of the organization
- Investigates and designs renovations for available mechanical systems
- Provides technical support to the department related to mechanical and electrical systems in the organization
- Carries out or supervises construction or repair of electrical and mechanical systems
- Patrols organizations property to ensure that the premises and personnel are secure
- In charge of monitoring surveillance equipment and reports irregularities
- Restrains trespassers and inform violators of policies and procedures of the organization
- Defines job positions for recruitment, carries out recruitment exercise and induction for new staff members
- Ensures that recruitment, welfare benefits as well as contract termination are in compliance with legal, contractual and statutory procedures
- Handles general office management issues
- Recommends financial actions on behalf of the organization by analyzing accounting options
- Prepares financial statements and income by compiling and analyzing account information on behalf of the company
- Analyze budgets as well as other financial information and help implement strategies that would save cost
- Ensure that the premises is kept clean at all times
- Follow procedures in using chemical cleaners especially where the systems are located
- Carries out any other duties as directed by the human resources manager
6. SWOT Analysis
Due to the fact that we intend to run a business that is up to standard, we have hired the services of a reputable business consultant here in Houston – Texas who has the necessary experience and also knows the business and industry thoroughly to help us look through our business concept and determine if it was worthwhile going into the kind of business that we were going into.
The business consultant was also to help us determine if we were well suited to run a data center business profitably and also compete favorably with the competitors who were running a similar business to ours here in the data center industry.
In view of that, an analysis was run in order to be able to take stock of what strengths, weakness, opportunities and threats were available to us in the industry we intended going into here in the United States of America. Below is the SWOT analysis that was conducted on behalf of Utech Datacenter;
There are several strengths available to us during the course of running the business and they include the fact that there are already existing distribution and sales networks available which makes it easier for us to penetrate the target market and get a share.
Also, the industry has been projected to grow and has a high growth rate which means that we are poised to earn lucratively from this business. Another strength lies in the fact that we have reduced labor costs as some of the tasks are being automated.
Finally, our employees are not only competent but very experienced and professional and are well equipped in ensuring that we achieve our intended goals and objectives.
The weakness we have in this business is due to the fact that we are running a small business unit that might affect our standing in the industry. We however intend to combat this by taking our sustainability and expansion measures seriously.
- Opportunities
There are several opportunities that are available to us in the course of running this business and they include; the growing demand from the target market as more and more people are shifting towards cloud based services and other hosting services. This would lead to another opportunity for income, as income for workers and operators in this field will be on a constant increase.
Every business no matter how lucrative faces threats every now either during start-up or whilst running the business and the data center business is no different. As a serious business we however have already laid down strategies that would combat any threat that we might face during the course of running the business.
Some threats that we are likely to face when starting this business include; technological problems that might arise from the equipment. Price changes in procuring most of the equipment or in running the data center that might likely affect our pricing rate for our clients. The arrival of a competitor in the same location might cause our profitability to drop.
7. MARKET ANALYSIS
- Market Trends
According to a JLL report, Northern Virginia as at 2015 had a year-to-date absorption of 63 MW with Dallas, Seattle and Portland following closely behind. It has also been found that states such as Atlanta, Colorado Springs, Northern Virginia, Portland and Seattle were more attractive for providers in the data center industry based on factors such as power costs, lease costs, sales taxes, property taxes as well as the potential incentives to be gotten.
Data center providers in the United States of America have between the years 2009 and 2015 had a total of 1,267 projects both new and existing; most of these projects had Texas topping the list of states with a total of 147 projects.
This is because Facebook has a 750,000 square foot facility in Fort Worth, Texas which is worth nearly $1 billion, another of such large corporation with several data centers in Texas in HP. Houston in Texas is the hub of for data centers as the demand for these centers is mostly driven by oil and gas companies, energy companies as well as healthcare organizations.
Another state that has a large hub for data centers is Virginia and it has been projected to overtake New York metro. This is because Northern Virginia has abundant fiber, cheap and reliable power as well as attractive tax incentive programs for data center providers. Data centers bring large investments to the community as they also attract service providers.
Although the network management for data centers have been automated for a long while back, they were not fully automated as they ran on servers and routers, physical switches, and were lined by physical network cables. Also, the plugging and unplugging of network cables had been physically limiting for the automatic network configuration.
However, with innovations all the aforementioned difficulties have been resolved especially the plugging and unplugging of physical ports which can be done as a command from software.
8. Our Target Market
The data center industry has a wide range of customers demanding for its services. However, in order for us to truly know who our target market is here in the United States of America, we have conducted a market research to help us truly determine what we are likely to face in getting our own share of the target market. This will also help us map out the needed strategies that would help our business reach its intended goals.
The market research we have conducted is also to help us know what exactly to look out for in our target market and what they will also be expecting from us. In view of this, we have determined that we are in business to cater to the following group of existing and potential clients;
- Data center service vendors
- Market operators
- Consultancy firms
- System integrators
- Training and education service providers
- Telecom and IT companies
- Cloud providers
- National regulatory authorities
- Government and public sector
- Financial institutions
- Oil and gas industry
- Small and medium enterprises
- Energy industry
- Healthcare industry
Our competitive advantage
We have established our business not only to make profit and be amongst the industry leaders but also to ensure that we have all the necessary factors that will allow us not only compete favorably with others but give us an edge as well.
We are located in a strategic location here in Houston – Texas that not only offer our employees easy access but also ensure that our overheads are low thereby affecting the overall pricing rates for our end-user clients, giving us an edge over others.
Even though data centers run a basic service of providing hosting services to clients, we intend to stand apart from our competitors by ensuring that we offer the best customer care service to our clients. All the inquiries of our clients, follow-ups and complaints will be professionally handled by our very qualified customer service executives.
Secondly, we intend to source for and hire the best employees to handle all the necessary responsibilities in the organization. Our employees will not only be very competent, qualified and professional, they will also understand not only the industry but also our corporate core values and be committed to ensuring that we attain all our intended goals and objectives.
Also, we will ensure that our employees are well paid and have the best welfare package across the industry whilst working in an environment that is conducive and safe. Also, our employees will always undergo regular training that will further enhance their skills while making them more productive for the company.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Utech datacenters Houston – Texas just like any other private business has been established with the intention of making money in the data centers market cum the Information technology industry here in the United States of America through our provision of data services for our numerous clients.
At Utech datacenters, we intend to generate income through the provision of these services;
10. Sales Forecast
The data center business industry is one that is still growing and this is because the demands for services of this nature are growing.
Our strategic location in Houston – Texas has made it very possible for us to be optimistic about generating the required income that would allow us not only make enough profits that will allow us sustain and grow our business within six months of operations.
However, in order to ensure that we come up with a sales projections that is not only accurate but that we can rely on, we conducted a critical analysis of the data center industry cum IT industry in order to analyze what chances we had.
The sales projections were done based on information gathered on similar start-ups such as ours here in Houston – Texas as well as all around the United States of America. Below is the sales projection for Utech datacenters based on several factors;
- First Fiscal Year-: $50,000,000
- Second Fiscal Year-: $100,000,000
- Third Fiscal Year-: $200,000,000
N.B : The above sales projections were done based on several assumptions that there won’t be an arrival of any major competitor and that growth in the industry would be stable. It should be noted that should there be a change in the assumptions, the projected sales figures would likely increase or decrease but not remain the same.
- Marketing Strategy and Sales Strategy
Marketing and sales is very important for the growth of a business and so at Utech we take this aspect of our business very seriously as we are also aware that marketing also increases the awareness for a business, asides from allowing a business penetrate the target market and gain a fair share of the market.
We have hired the services of a reputable marketing consultancy firm here in Houston – Texas who have the expertise in this industry and now the terrain here very well to help us draft strategies that would benefit our business and generate the revenue that we have projected for the organization.
We want to build a marketing structure that will allow us also compete favorably with other leading datacenters here in the United States of America whilst also ensuring that we attract potential customers to our business. Our marketing and sales executives have also been empowered to work together with the marketing consultancy firm so that the strategies drafted are in line with our corporate policies and goals.
Below are the marketing strategies that we intend to adopt in generating revenue for Utech datacenters;
- Ensure that our data center business is introduced to organizations and agencies as well as other stakeholders in the United States of America
- Place adverts in local and national newspapers and magazines as well as on radio and television stations
- Engage in direct marketing and sales
- Throw a huge IT themed party in order to capture the interest of stakeholders, potential clients and the general community
- Use our website and other social media platforms such as Facebook, LinkedIn, Google plus and Twitter in order to actively promote our data center business
- Ensure that our business is listed in online directories
11. Publicity and Advertising Strategy
Every business that intends to make profit knows the importance of ensuring that the business receives enough publicity. Publicity for a business not only increases awareness for the business but also ensures that more revenue is generated through the publicity the business gets.
Also in addition to creating awareness for our business, we intend to ensure that our publicity strategies will make us compete favorably with the other leading data centers in the United States of America.
In publicizing and advertising our business, we intend to ensure that we deploy all available strategies. We first intend to hire a reputable brand consulting firm to help us draft suitable publicity and advertising strategies that will ensure that our brand is positively communicated to all our clients – existing or potential.
Therefore some of the publicity and advertising strategies we intend to adopt for Utech datacenters include;
- Be active in the local community where we are located by sponsoring relevant programmes
- Creating contests physically and online for college and university students
- Ensure that we install our billboards in strategic locations all around Houston – Texas as well as round the United States of America in order to create awareness about our organization
- Place adverts in local and national newspapers, business and other relevant magazines as well as on radio and television stations
- Use social media platforms like LinkedIn, Facebook, Google plus, Twitter and other related platforms to create awareness about our business
- Distribute our handbills and post fliers in strategic locations all around Texas
12. Our Pricing Strategy
In deciding what prices we would set for our data center services we would need to carry out a pricing strategy in order to correctly determine what to charge our end-user clients. Factors such as power costs, lease costs, sales taxes, property taxes, what our competitors are offering as well as what potential incentives are to be gotten from our location would go a long way in determining what we would charge our clients.
In view of the fact that we are relatively new in the industry, we intend to lower our prices a bit from what our competitors are offering and so we would ensure that we give our clients a discounted rate for the first six months of business in order to ensure that more customers are aware of the business and that we attract a huge share of the target market. We assure our stakeholders that the lowering of our rates will not in any way allow us to run at a loss.
- Payment Options
Utech is aware of the fact that our different clients have diverse business preferences and lifestyles and so will require different payment options that will suit them. Therefore, the different payment options that will be made available to all our clients include;
- Payment via check
- Payment via credit card
- Payment via online payment portal
- Payment by bank transfer
We have carefully chosen the above payment options because we know that they would work without any form of hitches for our various clients.
13. Startup Expenditure (Budget)
The data center business is a capital intensive one especially as the bulk of the capital is used to lease a suitable facility, get sufficient power, get the necessary equipment to be used and also pay employees and utility bills. Therefore, the key areas where we intend to spend our start-up capital are;
- Fees for business registration and incorporation – $750
- Insurance coverage (General liability, property and equipment insurance, and Workers Compensation) – $100,000
- Obtaining of licenses and permits, as well as accounting software – $100,000
- Leasing of office facility for a period of 10 years including renovations – $7,000,000
- Cost of ensuring generating power as well as back-ups – $3,000,000
- Marketing expenses for a period of one year as well as marketing expenses for the grand opening of Utech datacenters – $450,000
- Cost of hiring reputable business consultants – $350,000
- Operational costs for the first 1 year (employee salaries, utility bills) – $2,000,000
- Cost of purchasing equipment for use (KVM console servers, SSD SAN storage, digital data shredder, Ethernet switches, retina scanner, UPS, blade server etc) – $10,000,000
- Cost of purchasing computers, printers, fax machines, phones – $10,000,000
- Cost of launching a website – $200,000
- Cost of throwing an opening party – $50,000
- Miscellaneous – $1,749,250
From the above requirements, we would need the sum of $35,000,000 to be able to start and successfully run our data center business here in Houston – Texas. The above amount covers the salaries of our employees and payment of utilities for at least 1 year of operations. It also covers the leasing of an office facility for a period of 10 years, and also procuring of equipment needed to run the data center business.
Generating Funding / Startup Capital for Utech Data Center Business
Utech datacenters is a business owned and run by two entrepreneurs and businessmen, Blake Chylds and Rob Branson. They intend to seek for various sources in ensuring that they source for the capital required for this business.
Therefore the areas where they intend to generate start-up capital from are;
- Generate part of the start-up capital from sale of property and personal stock
- Approach private investors for a loan in exchange for equity
- Apply for a loan from the bank
N.B: We have been able to generate the sum of $5,000,000 from the sale of our properties and personal stock. We approached a group of private investors who have agreed to lend us the sum of $10,000,000 in exchange for 3% equity in our business.
Our agreements are however based on certain conditions. We approached the ban for the sum of $20,000,000 to be repayable at the rate of 7% in 10 years. All the documents approving the loan have been signed and the money would soon be credited into our account within the week.
14. Sustainability and Expansion Strategy
The future of our business lies in how well we are able to sustain and later expand the business. In order to achieve our goals and grow as an organization, we intend to focus on the following factors such as investment strategy, our business structure as well as customer loyalty.
No business can survive without having a stable bottom line and so due to this; we intend to ensure that we re-invest 30% of our profit back into the company so that the business would be able to sustain itself without having to seek for external sources all the time.
We know how important it is for us to build a business structure and as such we are taking this aspect very seriously by recruiting employees who are not only competent and professionals but also those who thoroughly understand and identify with our corporate goals and objectives. We also intend to ensure that we have a great welfare package for our employees so as to boost their productivity efficiency for the organization.
Without customers, businesses would cease to exist as customers make sure that a business can generate revenue and make profit. We intend to offer excellent customer care to our clients and make sure that all issues and complaints are promptly resolved.
Check List / Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting feasibility studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party / launching party planning: In Progress
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
- Purchase of trucks: Completed
More on Technology
How to Start a Data Center Business
By: Author Tony Martins Ajaero
Home » Business ideas » Technology Industry » Data Center
Do you want to start a data center company? If YES, here is a complete guide to starting a data center business with NO money and no experience plus a sample data center business plan template.
A data center is a facility with a group of networked computer servers that organizations of all sizes use to remotely store, process or distribute information.
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Its set up is highly unique and delicate, requiring the services of professionals. The reliability of a data center cannot be overemphasized; a basic data center will have switches, routers, storage systems, servers, multiple cables and so on, to ensure the efficiency of such a set up.
The location where the data center would be set up also matters as one would need to look for a place without the possibility of flood. There are two options to choose from when considering a location for a fully functional data center. The first option is building from scratch; while this option is seen as the best way to go, it is also the most financially intensive.
The set-up of an industrialized data center requires it’s housing to have strong structures that can carry the weight of the super computers and also have proper ventilation to regulate the temperatures of the servers. When building the structure, one has to factor in these parameters.
Leasing or buying a building is cheaper, however the architectural design of the building itself may not be conducive for massive machines, heat and so forth. There are standards stipulated by the Telecommunications Industry Associations (TIA), which must be met before a data center is approved.
- Tier I basic standard has to have Uninterruptible Power Supplies (UPS) and Generators, and no redundant backups. Due to maintenance work, this type of set up is subject to being offline for at least 28hrs in a year.
- Tier II is the next standard with redundant components, uninterrupted power supplies, routers, air conditioning, only processing one channel of distribution, meaning that when technicians are in operation from time to time, this server can have about 22hrs of being offline in a year.
- Tier III is concurrently maintained, this means that technicians can go to work in maintaining this center without any power outage. This data center has enough back up lines capacity through different routes estimating outage to 95 minutes each year.
- Tier IV is the most current standard; this set up can actually withstand at least one aspect of its components failing, guaranteeing less than 25 minutes of outage per year.
With the sensitive nature of the data center, one may wonder why the servers would be out at any point in time, meaning that once servers are out, proper work cannot be done by some organizations.
This is the reason why certain organizations like the Banking and Financial Sector or Telecommunications companies would prefer to have at least two data centers at different locations, where one serves as the backup in case the other goes offline for maintenance or any other reason.
Of course there are organizations that may not need this real-time access to data all the time, as such an organization can still operate even when the servers are down, to later update its files when the servers come back up.
Companies can either choose to build their data centers at a particular office within their building, or at another location. This means that the level of physical security needed to keep the place guarded from external threats has to be high.
Some of the threats of setting up a data center are the need to secure both the software used and the physical facility. This security is against terrorists, hackers and the likes. The information within the walls of a data center cannot be left unguarded as lots of people, institutions, organizations and even governments can feel the negative effect of a security breach.
So when thinking of setting up a data center, one must decide whether the purpose is simply for an Internet Data Center or a Cloud Data Center, in whichever case the question will be how large does the business what to go.
What type of accounts does it want to handle, today the simple set up of a data center is to create hosting and storage for websites, but the scope of what could be achieved by a data center is well beyond that.
Steps to Starting a Data Center Business
1. understand the industry.
With the continuous advancement in technology and the need to digitize our world, the industry of Data Center services will always be on the rise. The global market for this type of business was estimated to have gone beyond $5Billion US Dollars, with the united states of America as one of the top users of Data Centers, they account for above 25% of the global market.
The Financial and Banking Institutions account for most of the demand for this kind of solutions because of the sensitive nature of their business. Today money can be transferred, invested and moved without the instrument of cash.
With the use of credit cards, debit cards, pins and other forms of digital financial services, it is no wonder this segment would require this service. Other Financial Services like Foreign Exchange, Stocks, Bonds, Trusts and various other financial instruments have to be up and running twenty four hours of the day. This can only be made possible by properly established data centers.
Another segment currently seen as the fastest growing in this industry is the Telecommunications Industry. Our mobile devices are now our world placed on the palm of our hands. There has to be a data center that takes care of distributing and supplying the much needed data to enable user experience on these devices.
It has now gone beyond the simple work of making and receiving calls, now we can stream movies online, send and receive emails, send messages through multiple mobile and web applications, and so forth. This has become the world we live in, so the demand for more efficient ways to manage data continues to increase.
When it comes to the data center business itself, power stands to be one of the major areas where finances will be directed to in order to make such a service effective.
The need for constant power supply cannot be over emphasized when it comes to setting up a data center facility. Power Distribution Units (PDU) would have to be carefully considered when looking to set up a business like this.
There must be multiple channels of power supply for the equipment; it is advisable to have a transformer, stand by generators and Uninterrupted Power Supply (UPS) system available.
Let me explain to you how important this is. Imagine for a moment that a particular data center currently holding data for a major bank in the country goes offline because of power failure. It means that no transaction will take place as long as the power is out at the data center.
Now remember that money is always moving 24 hours of the day, and someone is likely transferring money with that bank, purchases are being made either by credit cards, debit cards or other electronic means, currency exchange is going on, and trades are being made.
Think of the major calamity that would take place if that mega computer goes off for one minute. Thousands, if not millions of transactions would be interrupted, changing the proper outcome of such activities. So if one is going to set up a Data Center, there must be access to constant power supply.
The need for data centers is growing every day, but the work needed to establish a proper data center for high profile clients is much. It is a financially intensive business to set up and run effectively, though the industry is booming.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
Every company that handles large amounts of information would need a place to store, process and distribute their data. A simple computer hard drive, with no matter how many gigabytes will never be enough to take all the information that is being created by these enterprises, hence the need for a data center.
Whether the company chooses to set up its own data center or outsource it, the reality remains that there is much safety in developing a facility for keeping data.
So when it comes to organizations that need the services of a data center, we first of all call on the Banks and other Financial Service Organizations.
Like we said earlier, money is always moving, the amount of information being communicated every day in the financial world cannot be reduced to simple storage devices. It will take a much more sophisticated apparatus to deal with the real-time demands of the financial world.
Another organization in crucial need of this service is telecommunications companies. Data is transferred and processed every day, and all that information must be stored and processed in a facility dedicated to such an activity. Having this kind of facility ensures that the company can focus on all the other services it provides the public.
Governmental Agencies, Healthcare Agencies, Educational institutions even law firms are just a few other organizations that will require the use of a data center.
3. Decide What Niche to Concentrate On
You can choose the exact aspect of the data center business you want to specialize in and stick to it or you can do much more than just one thing. There is the internet based data center that offers their servers to companies who want to be online.
Basically when you visit a website, that website is brought to you by another computer called the server, it is almost as though you are accessing another person’s computer that remained open for you, as long as you want to be in it.
That is kind of how the “Server-Side” is when it comes to webhosting. The company’s web page is hosted on this server; the server of course is the property of your service provider which is the data center. So you could choose to be a simple web hosting data center where multiple companies and individuals can host their websites on your server.
Another niche you can create for yourself is to provide both the internet based data center and cloud based data center for a singular company. Depending on how big the company is, you alone can build the facility that would house the servers of that company.
The building itself may be yours, but the servers belong to the company, you could hire the services of Information Technology experts to constantly update and maintain the servers as well as provide proper security for the facility. In return, the company pays for the services you render.
Another niche you can focus on is to build a data center that provides its services to multiple businesses. Your facility would provide Housing, Rackhousing, Dedicated Servers, Managed Servers, Cloud hosting, private cloud, live servers and so on for these companies.
Another niche you could create for yourself is helping companies build their own private data centers within their building or at another location different from their offices.
Some companies would not want to leave such delicate information in the hands of an external person for fear of theft. They may want to build one for themselves and your company can help them do that and train their staff to be able to maintain it.
The Level of Competition in the Industry
The level of competition in this industry is high as more and more companies are looking for reliable data centers to help with the ever increasing technological evolution.
The challenging thing about competing in this business is the issue of trust and capability. The technology required for this type of business is always evolving, meaning that companies would want a data center that has room for further upgrades when new technology is introduced into the industry.
Companies that can brag about the use of current technological upgrades that have overshadowed the previous standard would have a chance at winning clients.
In a world where new technologies are always being produced, it will be well to remain up to date on the latest technology, with the aim of incorporating such into your data center. Although this would be very expensive, but it will give your clients the peace of mind to run their business.
4. Know the Major Competitors in the Industry
Well-known brands in industries like these offer a type of model to pay attention to, whether with the intention of emulating or with the intention of doing the direct opposite of what they are doing so as to create your own niche. Truth is that these organizations have worked so hard to be known as industry standards in this business. Their stories will definitely serve as a catalyst for your own drive and success.
Some of these brands are;
- NSA – America
- IO New Jersey
- Terremark Worldwide
Economic Analysis
Setting up a data center business for a large or medium sized organization is very financially intensive. Of course if all you want to do is web hosting for clients, that is a different scenario, all you need is constant power supply, a computer that stays on all the time, with the necessary software and technological knowhow to keep it running.
Of course you would have to be an IT Professional or you will need to get an IT Professional to work with you in setting this up. This type of data center may not be so financially demanding.
But if you are talking about doing more than just web hosting, then there’s a lot of work to do and a lot of things to consider. First of all, the location of the building will be the major concern. The area would have to be a secure place where the threat of flood or harsh weather conditions will not be present.
Erecting your building from scratch or utilizing one that’s already there would also prove to have its own ups and downs. After you finish with the building, you would have to deal with getting the equipment for your data center.
You would have to think of cooling system for your server and a way to tackle fire if it ever happens as heat is one of the major things to look out for in a data center. The next thing you have to think about after the equipment and cooling system is security.
All these things will pull a lot of money from you, supposing you want to go large scale. But should you prove to be a reliable service provider; your clients will definitely pay handsomely for your excellent service delivery.
5. Decide Whether to Buy a Franchise or Start from Scratch
Unfortunately there aren’t too many data centers that are into franchising. This is because of the security risks that go with the business.
The truth of the matter is that if a Data Center is looking to sell, it would definitely not be looking for an upstart in the industry, because it would have already been keeping the information of its clients over the years, so handing all that information to a company that is just starting up in the business can be a great risk.
They would have no way of knowing for sure whether the new company will be up to the task of securing the sensitive information on the servers.
So going to purchase a data center that is already up and running, as an upstart, is not very wise. Your company may not have the necessary experience in hosting such class of information.
Even if you hire professionals that have been in the business before; they still do not know how to work as a unit within your own organization. So there would be issues when every individual tries to find their synergy within this new eco system.
In this regard, starting from scratch seems to be the sure way to go in this type of business, choosing rather to start small and grow big, building experience along the way. As you build credibility and trust through the years, so will you build your client base. This will give you the much needed value to even begin to acquire other failing data center businesses.
6. Know the Possible Threats and Challenges You Will Face
The major threat to this kind of business is security, whether physical or cyber. The information within these servers can bring down organizations and so should be kept with the most up-to-date cyber and physical security measures. One who desires to set up such a business should not compromise on security.
The world is so “digital” these days that it is possible to steal a person’s identity, use their vital information to buy, sell and do all other kinds of damages.
Or when it comes to organizations, should an external hacker gain access to the company’s vital information, they can move funds, or alter various digital instruments that makes the company operate efficiently. This is one of the highest levels of sabotage a large enterprise can experience. The need for security cannot be over emphasized when thinking of going into a business like this.
Another major threat to this kind of business is negligence. If the onsite staff are not diligent in maintaining and keeping the equipment up and running at optimum levels, various things can begin to go wrong without the knowledge of the onsite staff.
For example one may not detect smoke coming from fire that may be generated from the heat and sparks of certain wires or cables.
Should the place burn down, that would mean the loss of all that information. Fires of course have been sited to be one of the major threats to this kind of business. Onsite staff must be vigilant in all their duties to ensure that fire outbreaks or other glitches like server failures and the likes will not occur.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
sole proprietorship or partnership is the best type of business registration one can get for this type of business, if you are looking at a small scale venture. However if you are looking to go into the big leagues, you have to register your company as a Limited Liability Company.
Get a board of directors, lawyers and the likes, because handing such sensitive information and services for large enterprises comes with its challenges. You would need all the help you can get should things not go as smoothly you expect.
8. Choose a Catchy Business Name from the ideas Below
- Global Cloud
9. Discuss With an Agent to Know the Best Insurance Policies for You
Only an inexperienced person would get into a business like this without knowing the proper insurance policies to acquire. When one is dealing with such delicate information, one needs to have protection in case the unexpected happens.
Every business is prone to the unexpected whether by human or non-human errors. Below are a few insurance policies you can apply for in this type of business;
- Data Center Insurance
- Business Insurance
- Cybersecurity Insurance
- Workers Compensation Insurance
- General Insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
There may be no strong need for you to have Intellectual Property Protection except with that of your logo or brand in this type of business. You are not going into the business of developing new technology that you may need to patent as yours. You are simply using the inventions created by others to render a service.
11. Get the Necessary Professional Certification
You are not required to have any type of professional certification before you can put together a functioning data center. But if you do not have the technical know how to do the day to day running of the business, you will definitely need to hire people who have been trained for this kind of thing.
Do not hire those who simply claim to know, go for the ones who have actually gone for training as they would be dealing with very sensitive things. But if you want to be the one dishing out these services yourself, you would need proper training at various institutes.
In this type of business, it’s not so much about the certificate; it’s about the real world knowledge of how data centers work and how to properly maintain them. So get certified if you want to be the one running the data center yourself or hire certified professionals.
12. Get the Necessary Legal Documents You Need to Operate
There would always be a set of documents required to run this business. These documents keep you on the right side of the law, so you can be free to run your business without the interruption of the law or government. Please do not assume that these are all the documents you need as you would need to do your own research.
Some of the legal documents you would need to run a business like this are as follows.;
- Certificate of Incorporation
- Employer Identification Number
- Trademark Registrations
- Business Plan
- Business Personal Property tax (If Necessary)
- Insurance Policy
- Operating Agreement for LLCs
- Online Terms of Use
- Online Privacy Policy Documents
- Company Bylaws
- Business License
13. Raise the Needed Startup Capital
Even when setting up a data center for something as simple as web hosting, there are a set of pricey equipment you will need to purchase. I would not suggest you get fairly used equipment because the quality of equipment you use will affect the efficiency of your data center.
The equipment and facility are usually the things that take the highest financial responsibility, not just for putting together but also for maintaining it.
However, setting up a data center to take care of global enterprises would be even more costly, so it will be very advantageous to know how to generate funds for such a venture. These are a few ideas on how to raise money for your Data Center Business;
- If you have saved up enough money, you could use that.
- You can sell property to start the data center business.
- Sell shares of your company.
- Get loans from family and friends.
- Get a loan from banks.
- Receive investment from partners, investors or business angels.
14. Choose a Suitable Location for your Business
You need a well secured area where there is no chance of flood. Clients would not have to visit your data center so there would be no need to locate your data center at a commercial district.
In fact, it should be some distance away from busy city life, but not too far away from civilization that security would now become an issue. It should be at a place that has access to constant power supply, as it has been said that huge data centers consume electricity fit for a small town.
15. Hire Employees for your Technical and Manpower Needs
With the list of heavy equipment needed to run this type of business, not to mention the wires, cables, routers, cooling and security systems. It would take something like a small community to keep a large scale data center running smoothly.
Below is a list of professionals needed to keep such a business running;
- IT Professionals
- Security Guards
- Administrators
- Sales and Marketing Official
- Chief Executive Officer
- Accountants
The Service Delivery Process of the Business
The Data Center business revolves around businesses wanting to keep their vital information within a remote server for use from time to time or just for storage purposes. Usually, the company contacts the data center representatives. After all agreements are made, the necessary network connections are made between the company and the servers in the Data Center.
Whenever the company needs this information they access the server remotely and take whatever they need, the same applies to when they want to store away information. As long as the Data Center is the Service provider of the company, they continue to pay for the service.
16. Write a Marketing Plan Packed With ideas & Strategies
- Attend expo’s and seminars or workshops with the aim of networking
- Employ the services of Marketers
- Use the internet and Social Media Platforms
- Do Promos and discounts.
17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Below are a few ideas to help boost awareness about your Data Center Business;
- Content Marketing.
- Billboards.
- Branded Cars.
- It’s mostly a digital business, so advertise on your own website
- Encourage the word of mouth approach.
Data Center Business Plan Template & Guidebook
Creating and executing your business plan is a vital step in successfully launching a new data center. This guide will walk you through everything you need to know about writing a solid business plan, including tips and best practices.
Get worry-free services and support to launch your business starting at $0 plus state fees.
- How to Start a Profitable Data Center Business [11 Steps]
- 25 Catchy Data Center Business Names:
- List of the Best Marketing Ideas For Your Data Center Business:
How to Write a Data Center Business Plan in 7 Steps:
1. describe the purpose of your data center business..
The first step to writing your business plan is to describe the purpose of your data center business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.
It also helps to include a vision statement so that readers can understand what type of company you want to build.
Here is an example of a purpose mission statement for a data center business:
Our purpose at Data Center Inc. is to provide our clients with a wide range of professional, reliable, and secure data center services that help them manage, protect, and grow their businesses. Our mission is to become the leading provider of data center services in the region, offering a wide range of options and packages to suit every need and budget. We are committed to using only the finest products and latest technology, and to providing exceptional customer service, with knowledgeable and friendly staff who can help clients understand their options and make the best choices for their needs. We aim to provide a safe, efficient, and enjoyable working environment for our team, and to deliver exceptional results that exceed our clients' expectations. We believe that everyone deserves to have access to professional, reliable, and secure data center services, and we strive to provide our clients with the best products and services available.
2. Products & Services Offered by Your Data Center Business.
The next step is to outline your products and services for your data center business.
When you think about the products and services that you offer, it's helpful to ask yourself the following questions:
- What is my business?
- What are the products and/or services that I offer?
- Why am I offering these particular products and/or services?
- How do I differentiate myself from competitors with similar offerings?
- How will I market my products and services?
You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.
3. Build a Creative Marketing Stratgey.
If you don't have a marketing plan for your data center business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals.
A good marketing plan for your data center business includes the following elements:
Target market
- Who is your target market?
- What do these customers have in common?
- How many of them are there?
- How can you best reach them with your message or product?
Customer base
- Who are your current customers?
- Where did they come from (i.e., referrals)?
- How can their experience with your data center business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?
Product or service description
- How does it work, what features does it have, and what are its benefits?
- Can anyone use this product or service regardless of age or gender?
- Can anyone visually see themselves using this product or service?
- How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?
Competitive analysis
- Which companies are competing with yours today (and why)?
- Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
- What specific advantages does each competitor offer over yours currently?
Marketing channels
- Which marketing channel do you intend to leverage to attract new customers?
- What is your estimated marketing budget needed?
- What is the projected cost to acquire a new customer?
- How many of your customers do you instead will return?
Form an LLC in your state!
4. Write Your Operational Plan.
Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations.
In it, you should list:
- The equipment and facilities needed
- Who will be involved in the business (employees, contractors)
- Financial requirements for each step
- Milestones & KPIs
- Location of your business
- Zoning & permits required for the business
What equipment, supplies, or permits are needed to run a data center business?
To run a data center business, you will need a few key pieces of equipment, supplies, and permits. These include:
- Data center infrastructure and equipment
- Network and security systems
- A permit to operate your business (depending on location)
- Business licenses and permits for business activities (if applicable)
You may also need to hire and train staff to manage the data center operations and provide customer service.
5. Management & Organization of Your Data Center Business.
The second part of your data center business plan is to develop a management and organization section.
This section will cover all of the following:
- How many employees you need in order to run your data center business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
- The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
- How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!
6. Data Center Business Startup Expenses & Captial Needed.
This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.
Typically, expenses for your business can be broken into a few basic categories:
Startup Costs
Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a data center business varies based on many different variables, but below are a few different types of startup costs for a data center business.
Running & Operating Costs
Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.
Marketing & Sales Expenses
You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your data center business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.
7. Financial Plan & Projections
A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your data center business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses.
Here are some steps you can follow to devise a financial plan for your data center business plan:
- Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
- Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
- Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
- Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
- Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
- Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.
Frequently Asked Questions About Data Center Business Plans:
Why do you need a business plan for a data center business.
A business plan is a document that outlines the goals and objectives of a business, as well as the strategies and tactics that will be used to achieve those goals. It is important to have a business plan for your data center business because it helps to focus the efforts of the company, communicate the business's goals and objectives to potential investors, and provide a roadmap for the business to follow. Additionally, a business plan can be used to help secure funding from investors or lenders, who will want to see that the business has a solid plan in place before they provide funding.
How to write a business plan for your data center business?)
To build a business plan for your data center business, start by researching your industry, competitors, and target market. Use this information to define your business's goals and objectives, as well as the strategies and tactics that you will use to achieve those goals. Next, create a financial plan that outlines your projected income, expenses, and profit. This should include a projected income statement, cash flow statement, and balance sheet. Once you have all of this information, you can use it to create a comprehensive business plan that outlines the goals and objectives of your business, as well as the strategies and tactics that you will use to achieve those goals. A well-written data center business plan contains the following sections: Purpose, Products & Services, Marketing Plan (including Marketing Strategy), Operations/Management Plan (including Operations/Management Strategy), Financial Plan (including Financial Forecasts), and Appendixes.
Can you write a data center business plan yourself?
Yes, you can write a data center business plan yourself. Writing a business plan is a valuable exercise that can help you clarify your business idea, identify potential challenges and opportunities, and develop a roadmap for success. While there are many resources and templates available to help you write a business plan, the process of creating one is ultimately up to you.
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How to Start a Data Center Business
Main Sections In This Post Steps To Starting A Data Center Business Points to Consider Resources Knowledge Is Power Featured Video
This article provides insights into running a data center business with a comprehensive, step-by-step guide.
It also offers valuable resources for both the startup phase and operational stage of your data center. Save this page for future reference and share it if you find it helpful!
Let’s get started with the steps.
Steps to Starting a Data Center Business
Below are the steps to starting a data center business.
Each step is linked to a specific section, allowing you to jump to your desired section or scroll to follow the steps in order.
- An Overview of What You’re Getting Into
- Data Center Business Overview
- Researching Your Data Center Business
- Looking at Financials
- Choosing A Business Location
- Creating Your Mission Statement
- Creating A Unique Selling Proposition (USP)
- Choose a Data Center Business Name
- Register Your Company
- Create Your Corporate Identity
- Writing a Business Plan
- Banking Considerations
- Getting the Funds for Your Operation
- Software Setup
- Business Insurance Considerations
- Supplier Considerations
- Physical Setup
- Creating a Website
- Create an External Support Team
- Hiring Employees
1. An Overview of What You’re Getting Into
Is Starting a Data Center Business the Right Step for You?
Passion: The Key to Success
There is a key factor to succeeding in the data center business, and that factor is you!
Understanding Your Passion
Understanding how you feel about owning and running a data center business is important.
Passion Drives Success
Passion is a crucial element for success in your own data center business.
The Driving Force
Passion is the driving force you need.
Passion vs. Challenges
When you’re passionate about your data center business, you seek solutions when problems arise. Without it, you’ll look for a way out.
Measure Your Passion
How passionate are you about owning your own data center business?
An Interesting Perspective
Imagine you were granted 5 wishes for anything you want. No restrictions!
The Revealing Question
Would you start a data center business with one of your wishes in this situation?
Passion Indicates the Right Direction
If your answer is yes, it shows that you are passionate about owning and operating a data center business and are heading in the right direction.
Discovering Alternatives
However, if your answer is no, it prompts another question:
Consider Your Preferences
What would you prefer to do instead? Perhaps, you should pursue that path instead.
Passion is Paramount
In summary, you need to be passionate about the data center business you are starting to increase your chances of success. Without passion, you may be fighting an uphill battle.
For More, See How Passion Affects Your Business . Also, see, Considerations Before You Start Your Business to identify key points for a new business owner.
2. Gaining an Overview of Owning a Data Center Business
Next, let’s spend some time on key issues to give you an overview of what to expect from owning and running your business.
a.) A Quick Overview of Owning a Data Center Business
A data center business focuses on providing a secure and reliable environment for companies to store their critical IT infrastructure.
This includes servers, storage devices, networking equipment, and other vital hardware.
The main purpose is to ensure digital resources are accessible around the clock and safeguarded from potential threats like power outages, cyberattacks, or natural disasters.
Data centers have various security measures, from physical barriers like gates and guards to advanced cooling systems ensuring the equipment doesn’t overheat.
They play a crucial role in today’s digital era, allowing businesses to operate seamlessly on the internet, host websites, run applications, and store vast amounts of data.
Day-to-Day Tasks in Running a Data Center
Maintenance and Monitoring: One of the most essential activities is ensuring that all equipment runs optimally. This involves monitoring server health, checking hardware issues, and replacing faulty components.
Security Measures: Keeping the data safe is a top priority. Daily tasks include reviewing security logs, updating firewalls, and checking for any signs of breaches or vulnerabilities.
Backup and Recovery: Regularly backing up data ensures that the information can be quickly restored in case of a system failure or other disruption.
Cooling System Checks: Maintaining an optimal temperature is essential to prevent equipment from overheating. Routine checks on the cooling system and making necessary adjustments are crucial.
Network Management: Ensuring the network is efficient and stable involves monitoring traffic, managing bandwidth, and resolving connectivity issues.
Customer Support: Data center operators often provide technical support to their clients. Addressing client concerns, troubleshooting issues, and ensuring they have the necessary resources are part of the daily routine.
Software Updates: Keeping the software up-to-date helps in protecting against potential threats and ensuring the smooth running of operations.
Energy Management: Monitoring and managing power usage is essential to maintain efficiency and reduce operational costs.
In essence, running a data center requires a mix of technical expertise, vigilant security measures, and proactive maintenance to ensure uninterrupted service for its clients.
b.) A Key Points To Succeeding in a Data Center Business
Points To Succeed in Operating a Data Center Business
Building a Solid Customer Base:
In the initial stages of your business, attracting customers can be challenging.
It’s essential to position your data center to meet a specific need or gap in the market, making it appealing to potential clients.
Cultivating Strong Relationships:
Your interactions with customers, suppliers, and employees lay the foundation for long-term success.
Building trust and maintaining open lines of communication can lead to fruitful partnerships and a loyal customer base.
Offering Desired Products and Services:
Understand the specific needs of your target market and tailor your offerings to match their demands.
Valuing Customer Feedback:
Always be open to input from your clients. Take action when they point out areas of concern that align with your operations.
This improves your services and shows customers that you value their opinions.
Prioritizing Customer Service:
Remember, your customers are the backbone of your business. A high level of service will differentiate you from competitors and foster customer loyalty.
Delivering Consistent Value:
Always focus on providing exceptional value.
Whether in terms of service quality, pricing, or additional benefits, ensure your customers see and experience this value.
Hiring Wisely:
The success of your business is also determined by the team you have.
Ensure that each employee, from technicians to customer service representatives, is the best fit for their role.
Staff Management and Team Environment:
Treat every employee respectfully and promote a team-oriented atmosphere. This boosts morale, increases productivity, and helps retain top talent.
Cash Flow Management:
Regularly review and manage your finances. Ensure that your income exceeds your expenses, and always have a contingency plan for unforeseen costs.
Cost Efficiency:
While it’s essential to minimize costs, and never compromise on the quality of service or customer experience, finding the balance is crucial.
Adapting to Change:
The tech industry, especially data centers, is ever-evolving.
Stay updated with the latest trends, adapt to new business processes, and embrace technological advancements.
Managing Revenue Fluctuations:
There might be peak and low revenue times. Having a strategy to navigate these fluctuations will ensure business continuity.
Competitive Strategy:
New competitors will emerge, and existing ones might up their game. Always have a strategy to differentiate yourself and offer something unique.
Marketing and Advertising:
Elevate your business’s visibility through effective marketing strategies.
Whether you’re doing it in-house or hiring experts, ensure that your marketing efforts resonate with your target audience and convey your brand’s message effectively.
Following these points and continuously evolving set your data center business up for lasting success.
c.) Making Your Costume Rental Business stand out
Unique Selling Proposition (USP):
Every business needs a USP. What makes your data center different? Whether it’s state-of-the-art cooling systems, unbeatable uptime guarantees, or exceptional security measures, pinpoint and promote it.
Green Initiatives:
As sustainability becomes more important to consumers and businesses, data centers that prioritize green energy and eco-friendly practices can attract a broader clientele.
Education and Workshops:
Offer workshops, seminars, and training sessions related to data management, cybersecurity, or the latest trends in the tech industry. This positions your business as a thought leader in the sector.
Transparency:
Regularly share detailed reports on uptime, security breaches (if any), and maintenance activities. Customers value transparency and trust businesses that offer it.
Customer-Centric Approach:
Tailor your offerings based on customer needs. Whether it’s flexible pricing, customizable storage solutions, or specialized support, making your clients feel valued will make you stand out.
Community Engagement:
Engage with the local community through CSR activities, sponsorships, or hosting tech-related events. A business actively involved in the community resonates well with customers and partners.
d.) Add on Ideas for a costume rental Business
Managed Services:
Beyond just providing space and hardware, offering managed IT services where your team takes care of the client’s infrastructure, software updates, and other technical needs.
Disaster Recovery Solutions:
Offer specialized packages that provide swift data recovery solutions for major disruptions or catastrophes.
Cloud Integration:
Help clients seamlessly integrate their on-premises infrastructure with cloud solutions, allowing them to scale and adapt to changing needs.
Security Consultations:
Given the increasing importance of cybersecurity, offer consultations to help clients bolster their defenses and understand potential vulnerabilities.
Dedicated Customer Portals:
Develop a portal where customers can easily monitor resource usage, manage accounts, and access support.
Hybrid Solutions:
Combine the best of traditional data center offerings with newer technologies to offer hybrid solutions tailored to specific industry needs.
Customizable Storage Solutions:
Instead of one-size-fits-all packages, allow clients to customize their storage, bandwidth, and other services based on their unique requirements.
Incorporating these add-ons and making your data center stand out requires a proactive approach, enhancing your market position and customer relationships.
e.) Data Center Business Models
Types of Data Center Business Setups and Their Business Models
Traditional Data Center:
This is the conventional type of data center where companies rent out space to host their servers and IT infrastructure.
Business Model: Leasing out physical space, usually measured in racks or units, and charging based on the size and duration of the lease.
Cloud Data Center:
These data centers offer cloud services, allowing businesses to scale their resources up or down based on demand.
Business Model: Subscription-based, where clients pay for the resources they use, such as storage space, processing power, and bandwidth.
Colocation Data Center:
Here, businesses rent space in a data center to place their equipment but manage their own hardware and software.
Business Model: Renting out rack space, with pricing often depending on power usage and additional services like security and cooling.
Edge Data Center:
These are decentralized data centers designed to process data closer to the source or edge of the network, reducing latency.
Business Model: Leasing space to businesses that require low-latency processing, often in combination with other data center services.
Managed Services Data Center:
These centers provide space and offer a range of services, from hardware maintenance to software updates.
Business Model: Comprehensive service packages that combine infrastructure leasing with IT management services, billed monthly or annually.
Green or Sustainable Data Center:
These data centers emphasize energy efficiency and eco-friendly operations, attracting sustainability-conscious businesses.
Business Model: Premium pricing for eco-friendly services, often combined with showcasing savings in energy costs to potential clients.
Hybrid Data Center:
A mix of traditional, cloud, and other types of data centers, offering flexibility to businesses.
Business Model: Tailored packages that allow businesses to combine the features of different types of data centers, usually on a subscription or contract basis.
Choosing the right business model from the beginning is crucial, as switching your model later is more challenging.
Identifying a profitable and high-demand niche for your data center business is essential.
f.) Questions You Need to Consider for Your Data Center Business
Questions to Consider Before Starting Your Data Center Business
Data Center Business Model:
What type of data center business model are you considering?
Handling Operations:
Will you personally handle all the work, or will you hire employees to share the responsibilities?
Management Decisions:
Do you intend to manage your data center hands-on, or are you considering hiring a dedicated manager?
Partnerships and Investments:
Are you interested in seeking partners or investors to bolster your capital or expertise?
Business Location:
Do you plan to start a home-based data center (which may be more suited for smaller, cloud-based models), or are you aiming to operate from a more expansive, commercial location?
Business Format:
If applicable, are you leaning towards a physical brick-and-mortar setup, or do you plan to operate primarily online?
Vision for Growth:
Have you considered how you’d like to grow in the future? What are your long-term goals for the business?
Security Protocols:
How do you plan to ensure the data security you’ll be housing? Have you considered both digital and physical security measures?
Sustainability Focus:
Will your data center prioritize green or sustainable practices? If so, how will you implement these practices?
Customer Service Approach:
How will you handle customer inquiries and concerns? Are you planning to set up a dedicated support team?
Financing and Budgeting:
Have you mapped out your initial costs and ongoing expenses? How do you plan to finance these costs, especially in the early stages of your business?
Regulations and Compliance:
Are you aware of the local and federal regulations surrounding data centers? How do you plan to ensure that your business stays compliant?
Considering the answers to these questions will better prepare you to tackle challenges and position your data center business for success from the outset.
g.) Pros and Cons of Owning a Data Center Business
Pros of Running a Data Center Business
Becoming the Boss: Owning a data center business means you are in charge. No more reporting to superiors; you’re the decision-maker.
Running the Show: You can call the shots and run the business according to your vision and values.
Unleashing Creativity: You can innovate and implement new strategies or technologies that benefit the business.
Potential for High Revenue: Given the increasing demand for data storage and processing, a successful data center business can generate significant revenue.
Flexibility in Working Hours: Once the business is thriving and you have a reliable team, you can choose your working hours, offering a better work-life balance.
Control Over Working Environment: You can decide the company culture, facility layout, and the technology and tools used in your data center.
Stable Demand: In today’s digital age, the need for data centers is growing consistently, ensuring a stable customer base.
Diverse Client Base: Data centers cater to various industries, from tech startups to established enterprises, providing diverse clients.
Cons of Running a Data Center Business
All Problems Fall on You: As the owner, you’ll need to tackle every challenge head-on, whether it’s technical glitches, employee disputes, or financial hiccups.
Irregular Income: Especially in the beginning, you may face months with little to no income as the business establishes itself.
Challenging Start-Up Phase: Setting up a data center involves numerous challenges, from choosing the right location to sourcing the right equipment.
Customer Acquisition and Retention: Attracting and retaining clients in a competitive market can be demanding and requires constant effort.
Long Working Hours: Expect to put in extra hours in the initial stages, often beyond the usual nine-to-five.
Success Pressure: The pressure to succeed can be immense, with significant investments and reputation at stake.
Initial Capital Requirement: Data centers need state-of-the-art equipment, security systems, and backup solutions, all of which require substantial investment.
Constant Evolution: The tech industry evolves rapidly. Keeping up with the latest technologies and updates is both essential and challenging.
Business Risks: Running a data center comes with its share of inherent risks, from cybersecurity threats to equipment malfunctions.
High Overhead Costs: The costs of maintaining servers, cooling systems, security protocols, and electricity bills can add up, impacting profit margins.
Expertise is Essential: Making informed decisions can be tricky without a deep understanding of the technology and industry trends.
Understanding the advantages and challenges of running a data center business will help potential owners make informed decisions and prepare for the journey ahead.
For more, see Pros and Cons of Starting a Small Business.
3. Research
Data center business research.
Research: The Foundation of Success
You must conduct thorough research for the data center business you intend to open before taking any other action.
With quality information, you will know what you’re getting into. Otherwise, you might find yourself in a situation you don’t expect.
Seek Wisdom from the Experienced
One way to get the best information is from people experienced in running a data center business.
Reliable Guidance
They are qualified to give you information you can depend on.
Priceless Knowledge Sharing
The time you spend with them can be priceless and an opportunity to gain insights from their knowledge and years of experience.
Unlocking Insights
I have written an article with ideas to help find the right people to contact and approach them in an acceptable and non-threatening way.
The steps go beyond this post, but I strongly suggest you read the article from the link below to understand what you’re getting into.
See An Inside Look Into the Business You Want To Start for all the details.
Target Audience
Overview: The Importance of Understanding Your Target Audience
Understanding your target audience is vital for a data center business.
When you know your target market, you can tailor your offers to appeal to customers effectively and provide products and services that genuinely interest them.
This strategic approach enhances customer satisfaction and boosts business growth.
Target Market Ideas:
- Information Technology (IT) Companies
- E-commerce Businesses
- Financial Institutions
- Government Agencies
- Healthcare Providers
- Research and Development Organizations
- Media and Entertainment Companies
- Education Institutions
- Startups and Small Businesses
- Cloud Service Providers
For more, see How To Understand Your Target Market.
4. Looking at Financials:
Data Center Business Overview: Startup Costs, Revenues, and Profits
Startup Costs:
Accurately estimating startup costs is crucial to ensure a successful launch of your data center business. It will smooth the process from planning to opening.
Underestimating costs could lead to financial constraints, delaying your business opening.
Overestimating may make your venture seem risky to potential investors.
Costs depend on operation size, location, employee hiring, equipment (new or used), and rental or leasing options.
Create a comprehensive list of needs and gather prices during research to refine your estimate.
For more detailed information, refer to my article on Estimating Startup Costs.
Sales and Profit:
Your data center’s sales depend on:
- The popularity of your products and services.
- The demand for data center solutions.
- Effective marketing to reach the right audience.
Profitability:
Profitability encompasses more than earnings per sale. It involves careful consideration of expenses like rent, payroll, and overhead costs.
Your sales must cover monthly expenses and provide a sustainable salary to succeed.
For More, See Estimating Profitability and Revenue
Sample Financial Lists As a Starting Point
Below are three overly simplified sample financial lists to give you a broad overview of the areas to focus on.
SAMPLE Estimated Costs to Start a New Data Center Business in the USA:
- Land/Lease Costs : $200,000 – $1,000,000
- Construction/Infrastructure : $500,000 – $5,000,000
- Server Equipment : $250,000 – $2,000,000
- Cooling Systems : $100,000 – $800,000
- Security Systems (Physical & Cyber) : $50,000 – $300,000
- Backup Power Supplies (Generators, UPS) : $50,000 – $400,000
- Licensing and Permits : $5,000 – $50,000
- Marketing and Initial Promotion : $20,000 – $150,000
- Insurance (Initial Payment) : $10,000 – $50,000
TOTAL : $1,185,000 – $9,750,000
SAMPLE Estimated Monthly Expenses for a Data Center Business in the USA:
- Loan Payments : $5,000 – $50,000
- Employee Salaries : $30,000 – $150,000
- Utility Bills (Electricity, Water) : $10,000 – $100,000
- Maintenance and Repairs : $5,000 – $20,000
- Security Monitoring and Upgrades : $1,000 – $10,000
- Software Licenses and Updates : $2,000 – $15,000
- Insurance : $1,000 – $5,000
- Marketing and Promotion : $3,000 – $20,000
TOTAL : $57,000 – $370,000
SAMPLE Sales and Profit Outline:
Revenue Calculation:
- Server Rack Rental (50 racks at $1,000 each) : $50,000
- Cloud Services (100 clients at $500 each) : $50,000
- Managed Services (20 clients at $2,000 each) : $40,000
- Total Revenue : $140,000
Expenses (from the above sample) : $57,000 (lowest estimate) – $370,000 (highest estimate)
Profit : $140,000 – $57,000 = $83,000 (best case) Profit : $140,000 – $370,000 = -$230,000 (worst case)
In Conclusion:
These are fictitious examples. So you can understand the issues to consider when planning to start your data center business.
Adjusting costs makes a significant difference in whether the business will be successful.
A slight shift in profit per sale on high-volume sales will make a difference in your overall profits.
Also, note many new businesses take time to become profitable because it takes building a customer base, building a reputation, and fine-tuning operations.
Your figures will be different. Every situation is different, and many factors come into play.
Research and consider getting professional advice when calculating your business’s startup costs, expenses, and potential revenues and profits.
5. Choosing The Right Business Location
Choosing the Right Location for Your Data Center Business
Location Impact on Success:
It can make the difference in whether or not your data center business succeeds or fails according to your choice of location.
Avoiding Unsuccessful Locations:
Operating in a location with no demand for data center services will lead to failure even before you launch your business.
Striking the Right Balance:
If you open your data center in an area with too much competition, you will struggle to get a share of the market.
Seeking Demand and Feasibility:
Ultimately, you want a location with demand and an acceptable level of competition.
Affordability Consideration:
Another important point is that you need a location that suits your budget.
The Balance of Exposure and Profitability:
Operating in a highly populated area offers more exposure, but you must ensure your data center business will be profitable with the extra expense.
Weighing Sales Potential:
Similarly, if you opt for an inexpensive area, it should still generate enough sales to sustain your data center business.
Home-Based Operations:
For some data center business models, operating from home is a viable option, especially for online or less customer-interaction-intensive ventures. It can be a starting point, with the possibility of moving to a commercial location as the business expands.
Research is Key:
Choosing a location is an important factor in the success of your data center business. Make sure to research it carefully!
For more about business locations, see Choosing The Best Location for Your Business.
6. Create Your Mission Statement
Overview: The Importance of a Mission Statement
A mission statement helps identify the core purpose of your data center business.
It keeps you focused and reminds you of the primary benefit you aim to provide customers and the community.
Examples of Mission Statements for a Data Center Business:
- “Empowering businesses with cutting-edge data solutions to thrive in the digital age.”
- “Enabling seamless connectivity and secure data management for enterprises worldwide.”
- “Our mission is to be the leading data center provider, offering exceptional reliability and efficiency to fuel our clients’ success.”
For more, see, How To Create a Mission Statement .
7. Creating A Unique Selling Proposition (USP)
Overview: The Significance of Unique Selling Proposition (USP)
A Unique Selling Proposition (USP) aids in identifying and creating distinctive features that set your data center business apart from others, making it special and appealing to customers.
Examples of USPs for a Data Center Business:
- “Guaranteed 99.999% uptime for uninterrupted data access and reliability.”
- “Tailored data security solutions designed to meet specific industry compliance standards.”
- “24/7 expert support and personalized data management services to cater to unique business needs.”
8. Choose a Business Name
Selecting a Data Center Business Name: Catchy and Memorable
When choosing your data center business name, aim for something catchy and appropriate. Opt for a name that is easy to pronounce and remember.
Remember, business names are usually long-lasting, so make a thoughtful choice.
Ensure the availability of a matching domain name for your online presence and avoid conflicting with existing registered names.
30 Data Center Business Name Ideas:
- DataTech Hub
- SecureConnect Solutions
- InfoNexus Services
- PowerGrid Data Centers
- TechVault Solutions
- DataMaster Pro
- Cyberspace Hub
- CloudSource Data
- NetworkNest Center
- DataSphere Solutions
- InfoGuardian Hub
- DataLink Depot
- TechTower Centers
- InfoVortex Solutions
- NetSafe Data Centers
- DataPulse Hub
- ConnectX Services
- CyberGate Data
- CloudBridge Solutions
- InfoFortress Centers
- DataHive Hub
- TechMatrix Solutions
- NetworkPrime Data
- InfoBolt Center
- DataScope Solutions
- CyberShield Hub
- CloudCore Data Centers
- InfoPeak Solutions
- NetEdge Services
- DataZenith Hub
Let these ideas spark your creativity to come up with an original and fitting name for your data center business.
For more, see the following articles:
- How To Register a Business Name
- Registering a Domain Name For Your Business
9. Register Your Company
Ensuring Your Data Center Business is Legal and Compliant
Running a data center business requires careful attention to legal considerations to ensure smooth operations and compliance with regulations.
Seeking professional advice is essential for setting up the business correctly to benefit from tax advantages and minimize liability risks.
Consulting with Professionals:
Considering the complexity of legal requirements, consulting with professionals, such as lawyers and accountants, is prudent to ensure your data center business is legally sound and well-structured.
Common Types of Registrations for a Data Center Business:
- Business Entity Registration: Choose the appropriate legal structure, such as LLC, corporation, or sole proprietorship, and register your data center accordingly with the state.
- Tax Identification Number (TIN): Obtain a TIN from the IRS for tax purposes and identification.
- Business Licenses: Acquire local, state, and federal licenses to legally operate a data center business.
Permits and Licenses for a Data Center Business:
- Zoning Permits: Ensure compliance with local zoning regulations for operating a data center in a specific area.
- Building Permits: Obtain permits for any construction or renovations needed for your data center facility.
- Environmental Permits: Obtain relevant environmental permits if your data center involves cooling systems or other equipment that may impact the environment.
- Fire Safety Permits: Comply with fire safety regulations and obtain the necessary permits to ensure a safe data center environment.
- Health and Safety Certifications: If your data center handles sensitive information or critical infrastructure, meet health and safety standards.
- Occupancy Permits: Ensure that your data center facility meets occupancy and operational use requirements.
Taking the time to address legal matters and securing the appropriate registrations, permits, and licenses will enable your data center business to operate legally and confidently.
It also ensures you comply with the relevant industry laws and regulations.
Registration:
- How to Register Your Business
- How To Register a DBA
- How to Register a Trademark
- How to Get a Business License
Business Structures:
- How to Choose a Business Structure
- Pros & Cons of a Sole Proprietorship
- How To Form an LLC
- How To Register a Business Partnership
- How To Form a Corporation
- How To Choose a Business Registration Service
10. Create Your Corporate Identity
Developing a Corporate Identity for Your Data Center Business
What is a Corporate Identity (Corporate ID)?
A Corporate Identity is a visual representation of your data center business.
Key Components of a Corporate Identity:
A Corporate ID consists of various components such as your:
- Business cards
- Business sign
- Promotional items
The Importance of Consistency:
Naturally, you want a constant professional design to impress new and existing customers.
Credibility and Brand Recognition:
Maintaining a consistent and professional design across these elements is crucial to leaving a lasting impression on both new and existing customers.
A cohesive Corporate ID enhances your data center’s credibility and helps build brand recognition in the competitive market.
Reflect Your Values and Message:
Ensure your logo and other visual elements align with your data center’s core values and overall brand message.
A well-crafted Corporate ID communicates professionalism and reliability, boosting trust among potential clients and partners.
Building Brand Loyalty:
Additionally, a strong Corporate Identity fosters a sense of brand loyalty among customers, making them more likely to return for your data center services and recommend your business to others.
An Essential Tool for Growth:
As your data center business grows, your Corporate ID becomes essential for building a strong and recognizable brand presence in the industry.
You can see our page for an overview of your logo , business cards , website , and business sign , or see A Complete Introduction to Corporate Identity Packages.
11. Writing a Business Plan
Crafting a Business Plan for Your Data Center Business
The Significance of a Business Plan
A business plan is a critical document for your data center business. It serves multiple purposes, including acquiring funding and attracting investors.
Additionally, it acts as a guide to steer you through the startup phase and when your data center is fully operational.
Vision and Effort
Writing a data center business plan demands time and effort as you create a vision of what your business will be like once it’s operational.
Careful planning and attention to detail are necessary for its successful expression.
A Clear Roadmap
The effort invested in the business plan will be worthwhile, as it provides a clear vision of what you need to start and how to effectively operate your data center.
Exploring Different Options
When creating your business plan, consider the various options available to you. You can start from scratch, hire a professional, use a template, or utilize business plan software.
Active Participation is Key
Regardless of your chosen approach, active participation in the process is crucial.
Even if you hire a professional, your involvement ensures a distinctive plan effectively communicating your data center’s nature and management strategies.
A Living Document
Your data center’s business plan may evolve with experience. Regularly reviewing and optimizing the document is advisable as your business grows.
This allows you to make necessary changes and adjustments to align your operations with your long-term goals.
A Fictitious Business Plan Example for a Data Center
Executive Summary
ABC Data Solutions is a new, forward-thinking data center startup based in Silicon Valley.
We intend to provide secure, reliable, and efficient data management services to small and medium enterprises (SMEs) in the tech sector.
Our goal is to minimize our client’s downtime and maximize their data efficiency, offering them a competitive edge in their respective markets.
Company Description
Founded by experienced tech entrepreneurs, ABC Data Solutions will leverage state-of-the-art technology and a customer-centric approach to provide tailor-made data storage and management solutions.
Our services will encompass server rack rental, cloud services, and managed services designed to cater to our clients’ unique needs.
Market Analysis
Market Need:
With the tech sector’s rapid growth, the demand for secure and efficient data centers has never been higher. Especially among SMEs, the need for reliable yet affordable data center solutions is a pressing concern.
Target Market:
We plan to target SMEs in the tech sector. These businesses need robust data services but often lack the resources to establish and maintain their data centers.
Server Rack Rental:
We will provide space for businesses to house their servers in our secure and climate-controlled environment.
Cloud Services:
Our cloud services will offer flexible and scalable storage solutions focusing on security and accessibility.
For businesses looking for comprehensive solutions, our managed services will offer a suite of features, including monitoring, maintenance, and technical support.
Sales and Marketing Strategy
Our sales and marketing strategy will focus on building relationships with our potential clients.
We will employ a multi-channel approach, utilizing targeted online advertising, networking events, and partnerships with local businesses.
Operational Plan
We will begin by leasing a commercial space suitable for a data center.
Our team will be composed of qualified technicians and customer service representatives to ensure smooth operations and excellent customer service.
We will continually invest in the latest technology to maintain our competitive edge.
Financial Projections
ABC Data Solutions will be profitable within two years of operation.
Our initial financial needs are estimated at $5 million, which will be financed through a combination of owner’s equity and bank loans.
Exit Strategy
Our long-term goal is to build a profitable, sustainable business.
However, in the event of potential acquisition interest from larger players in the industry, we are open to discussions.
This fictitious business plan is intended to serve as a guide. Each data center business will have unique needs and circumstances to consider when developing a comprehensive business plan.
Remember, this process is crucial for understanding your business goals, measuring your progress, and achieving success.
For information on creating your business plan, see, How to Write a Business Plan.
12. Banking Considerations
Financial Considerations for Your Data Center Business
Choosing a Business-Friendly Bank
Consider choosing a nearby bank that caters to business owners for your data center business.
The Importance of a Separate Business Account
Opening a separate business account is essential to separate your data center’s expenses from personal spending.
This separation makes it easier to track expenses, manage bookkeeping, and provides proof in case of a tax audit.
Building a Professional Relationship with Your Banker
Developing a professional relationship with your banker is a good idea.
They can provide valuable advice and financial services, streamlining application processes for your data center business.
Facilitating Payment Processing
To enhance customer convenience, consider applying for a merchant account or a similar setup to accept credit and debit card payments at your data center.
This will improve transaction efficiency and cater to modern payment preferences.
For more, see, How to Open a Business Bank Account. You may also want to look at, What Is a Merchant Account and How to Get One.
13. Getting the Funds for Your Operation
Overview: Funding Your Data Center Business
If you need a loan to start your data center business, this section offers valuable tips to guide you through the funding process.
Securing funds to establish and operate your data center is essential for a successful launch and sustained growth.
Exploring Funding Options
Several funding options are available to support your data center business, including:
- Traditional lenders
- Private loans
- Selling assets
- Using collateral
Meeting with a Loan Officer: Considerations
When meeting with a loan officer, keep these considerations in mind:
- Be prepared to discuss your data center business plan and financial projections.
- Highlight your industry experience and expertise in data center operations.
- Demonstrate how the loan will be utilized to grow your business.
Documents Needed to Apply for a Business Loan for a NEW Data Center Business:
To apply for a business loan for your new data center business, you’ll likely need to provide the following documents:
- Business plan outlining your data center’s goals and strategies.
- Financial projections and cash flow forecasts.
- Personal and business credit history.
- Bank statements and financial statements (if applicable).
- Proof of collateral or assets (if using them for securing the loan).
- Legal documents, such as business licenses and registrations.
By understanding your funding options, preparing thoroughly for loan meetings, and compiling the necessary documents, you can increase your chances of securing the financial support needed to establish and grow your data center business.
See, Getting a Small Business Loan for more.
14. Software Setup
Software Considerations for Your Data Center Business
Choosing the right software is crucial for efficient operations and data management when setting up your data center business. Here are some essential considerations:
Implementing Software from Scratch:
Research the software options carefully, as it’s easier to implement a program from scratch than to switch to a new system after your data is already in another program.
Choose a software solution that aligns with your data center’s needs and growth plans.
Exploring Demos and Reviews:
Look for software providers that offer demos, allowing you to test the functionality and user-friendliness of the system.
Additionally, read reviews and participate in forums to gather insights from other data center professionals using the software.
3. Financial and Tax Preparation Software:
Consider reliable accounting software for tracking expenses and preparing financial documents for tax filing.
Consulting with your bookkeeper or accountant can help you select the best-suited accounting software for your data center business.
Software Options to Consider for Your Data Center Business:
- Data Center Management Software
- Data Security and Encryption Software
- Cloud Management and Backup Software
- Remote Monitoring and Control Software
- Networking and Connectivity Management Software
- Customer Relationship Management (CRM) Software
- Accounting and Financial Software
- Project Management and Collaboration Software
- Inventory and Asset Management Software
- Environmental Monitoring and Cooling Management Software
Evaluate each software’s features, scalability, compatibility, and customer support to make informed decisions that will optimize your data center operations.
Software Considerations for a Data Center Business.
Check out Google’s latest search results for software packages for a data center business.
15. Get The Right Business Insurance
Insurance Considerations for Your Data Center Business
Comprehensive Coverage:
Ensure your insurance policy provides comprehensive coverage, protecting your data center, customers, employees, and anyone on the premises.
Professional Liability Insurance:
Consider professional liability insurance to protect your data center against potential lawsuits related to professional services.
Home-Based Business Insurance:
If you operate or manage your data center business from your home, inform your home insurance agent. Failure to do so could nullify your existing home insurance policy.
Property Insurance:
Obtain property insurance to protect your data center’s physical assets, including servers, networking equipment, and other valuable items.
Cyber Liability Insurance:
Given the nature of your business, consider cyber liability insurance to protect against data breaches, cyberattacks, and potential data loss.
Business Interruption Insurance:
Consider business interruption insurance, which can cover lost income and ongoing expenses if your data center experiences a significant disruption.
Workers’ Compensation Insurance:
If you have employees, ensure you have workers’ compensation insurance to cover medical expenses and lost wages in the event of work-related injuries or illnesses.
General Liability Insurance:
General liability insurance is essential to protect your data center from third-party claims, such as bodily injury or property damage on your premises.
Professional Advice:
Consult a competent insurance broker who specializes in data center businesses. They can guide you through the process and ensure sufficient coverage tailored to your needs.
Prioritize insurance to mitigate potential risks and protect the long-term success of your data center business.
For more, see What to Know About Business Insurance . You can also browse the latest Google search results for data center business insurance .
16. Suppliers & Inventory
Selecting Suppliers for Your Data Center Business
Items and Services Purchased from Suppliers
A data center business may purchase the following items and services from suppliers:
- Servers and networking equipment
- Cooling and HVAC systems
- Power distribution units
- Data storage solutions
- Networking cables and accessories
- Security and surveillance equipment
- Software licenses and subscriptions
- Maintenance and support services
The Importance of Strong Supplier Relationships
Establishing a strong relationship with your suppliers is crucial for the success of your data center business.
Competitive Prices and Profit Margin
A reliable supplier can offer competitive prices, enabling you to pass on savings to your customers and increase your profit margin.
Ensuring Smooth Operations
Additionally, a trustworthy supplier ensures you always have the necessary stock to run your data center business smoothly, minimizing downtime and customer dissatisfaction.
Mutually Beneficial Partnerships
Treating your suppliers respectfully and ensuring they benefit financially from the partnership is important. This approach improves your working relationship with them and fosters long-term cooperation, contributing to the success of your data center business.
For More See, How To Choose a Supplier.
17. Physical Setup
Layout: Physical Setup of a Data Center Business
A data center business’s physical setup/layout is crucial for efficient operations.
It includes arranging servers, networking equipment, cooling systems, and power distribution units. A well-organized layout ensures smooth data flow, effective management of resources, and easy maintenance.
Security measures like access control systems and surveillance cameras are also integrated into the layout to safeguard critical data and infrastructure.
Signage: Directing People and Demonstrating Professionalism
Setting up signage is essential for a data center business. In addition to the main business sign, display signs strategically at relevant locations, such as parking lots, exits, and special areas.
Well-designed signs direct people effectively and enhance the professionalism of your operation.
Clear signage guides visitors and instills confidence in your data center’s reliability and attention to detail.
Office Setup: Boosting Productivity and Efficiency
An organized office setup is vital for managing your data center business efficiently.
As your operations center, the office should be fully equipped with everything needed for effective management.
Furnish the office with essential tools, computers, communication devices, and stationery.
Maintaining a clutter-free workspace enhances productivity and streamlines workflow, ensuring you can focus on the core aspects of running a successful data center business.
See, Here are Considerations for The Setup of Your Office, for tips and ideas to make your office work for you. Also, have a look at our article About Company Signs.
18. Creating a Website
Overview: The Benefits of Having a Website for a Data Center Business
Having a website is highly advantageous for your data center business. It is a digital storefront, providing customers with essential information about your services and offerings.
A website enhances your business’s visibility and accessibility, making it easier for potential clients to find and connect with you.
A Marketing Tool
Your website can also function as a powerful marketing tool.
You establish yourself as an expert by creating informative and engaging blog posts about the data center industry and offering valuable tips and insights tailored to your customers.
This builds trust with your audience, potentially leading to increased sales and long-term customer loyalty.
24/7 Availability and Reach
With a website, your data center business is accessible 24/7, allowing customers to learn about your services and contact you at their convenience.
It extends your reach beyond local boundaries, attracting clients from different geographic locations and contributing to business growth and expansion.
Showcasing Services and Expertise
You can showcase your data center’s services, technology, and expertise through your website.
Highlighting successful projects and client testimonials further reinforces your credibility, helping potential customers make informed decisions about partnering with your business.
Improved Customer Support
A well-designed website can offer a seamless customer support experience.
Provide an FAQ section and contact forms for inquiries, ensuring customers can easily get the assistance they need, thus enhancing customer satisfaction and loyalty.
Competing in the Digital Landscape
A website is essential for data center businesses to remain competitive in the modern business landscape.
It allows you to keep up with industry trends, engage with your target audience, and adapt your services to meet evolving customer needs.
For more, see How to Build a Website for Your Business .
19. Create an External Support Team
Data Center Business: The Importance of an External Support Team
An external support team of professionals is a group of people you can depend on for advice and services. It’s also important to note these people are not on your payroll.
Benefits of Engaging an External Support Team
Ideally, you use their services peruse, contract, or hourly. Even though you probably already work with some individuals, focusing on them as your team helps you better understand their significance as well as adding more members.
Gradual Building of Your External Support Team
You don’t need to have all these people in place before you start because it takes time to build professional relationships and people you can count on, but it is something you will want to continue to work on.
Enhancing Your Data Center’s Capabilities
When you have a strong team, they can help when you need them. Your group may include; an accountant, a lawyer, a financial advisor, a marketing specialist, technical advisors, consultants, etc.
Having a reliable and diverse external support network enhances the efficiency and effectiveness of your data center operations, ensuring smooth functioning and growth in the competitive market.
For more, see, Building a Team of Professional Advisors for Your Business.
20. Hiring Employees
Adapting Original Content for Data Center Business:
In the early stages of operating a data center business, you might consider handling everything yourself to avoid the immediate cost of hiring employees.
This approach can be viable as payroll expenses can be significant, particularly during the initial phase.
However, as your data center business grows, you may find it challenging to single-handedly manage and operate all aspects effectively.
At this point, hiring employees becomes essential, as having the right people onboard can significantly enhance productivity and overall operations.
List of Jobs Needed to Run a Data Center Business:
The following are job positions or outsourced services you may want to consider as your data center business grows and becomes successful:
- Data Center Technicians: Responsible for the day-to-day operations and maintenance of the data center equipment, ensuring smooth functioning and timely troubleshooting.
- Network Engineers: Manage the data center’s network infrastructure, ensuring high-speed connectivity and secure data transmission.
- Systems Administrators: Oversee server configurations, software installations, and system updates to maintain optimal performance and security.
- Security Specialists: Implement and monitor data center security measures to safeguard against cyber threats and unauthorized access.
- HVAC Technicians: Ensure proper climate control and cooling systems to prevent equipment overheating and ensure energy efficiency.
- Facility Managers: Oversee the overall physical infrastructure of the data center, including space utilization and equipment placement.
- Customer Support Representatives: Provide responsive and efficient customer support to clients with inquiries or technical issues.
- Sales and Marketing Professionals: Promote the data center’s services, attract new clients, and maintain positive customer relationships.
- Finance and Accounting Personnel: Handle financial matters, including budgeting, billing, and expense management.
- Compliance and Legal Advisors: Ensure the data center adheres to industry regulations and legal requirements.
As your data center business expands, considering these positions and outsourced services will play a vital role in sustaining success and meeting the growing demands of your clients.
For more, see, How and When to Hire a New Employee.
Points To Consider
Hours of operation:.
Hours of Operation for a 24/7 Data Center Business:
Operating a data center business requires round-the-clock support and availability to ensure seamless service delivery. Here are the hours of operation to consider:
- 24/7 Facility Access: The physical data center facility should be accessible 24 hours a day, 7 days a week, to accommodate clients and technical staff for equipment maintenance and emergencies.
- Technical Support: Provide 24/7 technical support to address any client inquiries, server issues, or network problems promptly and efficiently.
- Monitoring and Surveillance: Continuous monitoring and surveillance of the data center’s infrastructure and security systems are necessary 24/7 to detect and respond to potential threats or anomalies.
- Customer Service: Offer 24/7 customer service availability to assist clients with account management, billing inquiries, and general information.
- Remote Hands Support: Provide 24/7 remote hands support for clients who may need assistance with hardware installations, troubleshooting, or server reboots.
- Network Operations Center (NOC): The NOC should be operational 24/7, responsible for monitoring network performance, handling incidents, and implementing necessary adjustments.
- Security Operations Center (SOC): Maintain a 24/7 SOC to oversee data center security, conduct threat analysis, and respond to security incidents.
- Escalation Procedures: Establish clear escalation procedures to ensure critical issues are addressed promptly, even during non-standard hours.
- Data Center Engineers and Technicians: Have teams of engineers and technicians available on-site or on-call 24/7 to handle maintenance, repairs, and emergencies.
- Power and Cooling Management: Ensure 24/7 monitoring and management of power and cooling systems to prevent outages and maintain optimal equipment conditions.
By operating 24/7, your data center business can provide reliable services to clients, minimize downtime, and swiftly respond to any issues that may arise, thereby establishing a reputation for excellence in the industry.
A List of Equipment and Supplies to Consider for a Data Center Business:
Infrastructure & Facilities
- Server Racks & Cabinets: Structures to house servers, networking equipment, and related components.
- Raised Flooring: Allows efficient cable management and airflow.
- Fire Suppression Systems: Specialized systems designed for electronics and data center environments.
- Air Conditioners & Cooling Units: Precision cooling systems designed for data centers.
- Hot & Cold Aisle Containment: Efficient airflow management solutions.
Power Management
- Uninterruptible Power Supplies (UPS): Provides backup power during outages.
- Power Distribution Units (PDU): Distributes electrical power to servers and network equipment.
- Generators: Backup power source for prolonged outages.
- Transfer Switches: Switch between primary and backup power sources.
- Batteries: Store power for UPS systems.
Connectivity & Networking
- Routers: Directs data traffic between networks.
- Switches: Connects devices within a network.
- Firewalls: Provides security by filtering incoming and outgoing traffic.
- Load Balancers: Distributes network traffic across servers.
- Optical Network Terminals: Converts optical signals to electronic signals.
- Patch Panels: Provides an interconnection environment for network cabling.
- Cabling: Fiber optic cables, Ethernet cables, etc.
Server Hardware
- Servers: Multiple types depending on need (file servers, application servers, database servers, etc.)
- Storage Devices: SAN (Storage Area Network) and NAS (Network Attached Storage) systems.
- Backup Drives & Tape Libraries: Backup and archival solutions.
Security & Monitoring
- CCTV Cameras: Surveillance of the facility.
- Access Control Systems: Biometric scanners, keycard systems, etc.
- Environmental Monitors: Monitor temperature, humidity, and more.
- Security Gateways: Hardware appliances that provide an array of security functions.
- Intrusion Detection Systems: Monitors network traffic for suspicious activity.
Management & Maintenance
- KVM (Keyboard, Video, Mouse) Switches: Allows control of multiple servers from a single device.
- Server Lifts: Aids in the installation and removal of server equipment.
- Cable Management Tools: Organizers, ties, labels, etc.
- Coolant & Refrigerants: For cooling systems.
- Cleaning Equipment: Specialized vacuums, anti-static wipes, etc.
Redundancy & Backup
- Redundant Servers: Backup servers for failover.
- Backup Software & Systems: Automated tools for data backup.
- Disaster Recovery Solutions: Tools and systems to recover data during catastrophic failures.
Marketing Considerations
In the data center business, having customers is essential for success. Attracting clients may be challenging in the beginning, as your data center is new, and awareness about it is limited.
However, as you establish a good reputation over time, attracting customers will become easier. Additionally, you’ll gain valuable marketing experience, which will further support your efforts.
Marketing your data center business should be an ongoing endeavor.
The more you invest in effective marketing techniques, the more revenue you can generate. While you don’t always need a marketing agency or expert, you can certainly explore those options if needed.
Simplifying the marketing process involves creating awareness about your data center business whenever an opportunity arises.
This approach allows you to continuously reach potential clients and make them aware of the valuable services you offer.
By being proactive in marketing, you can steadily grow your customer base and solidify your position in the competitive data center industry.
See our article How To Get Customers Through the Door
Potential Referral Partners for Your Business
IT Consultants and Firms:
These professionals regularly work with businesses that require robust data solutions. A partnership can be mutually beneficial, as they can direct clients who need data center services to you.
Web Hosting Companies:
While many of these companies have their own data centers, they might have clients with specific needs that they can’t cater to. A referral partnership could be beneficial for such niche requirements.
Managed Service Providers (MSPs):
MSPs manage IT services for various businesses. Partnering with them could allow you to offer specialized data center solutions to their clientele.
Local Business Chambers and Associations:
Becoming a member or forming partnerships with these organizations can open doors to various local businesses that might need your services.
Commercial Real Estate Agents:
These agents often work with businesses setting up new offices or expanding. They could refer clients who need data center spaces.
Cybersecurity Firms:
Companies that offer cybersecurity services might encounter businesses needing secure data storage solutions.
Software Development Companies:
These firms often work with businesses that need robust and reliable data storage solutions for their applications.
E-commerce Platforms and Service Providers:
E-commerce businesses require reliable data centers for smooth online operations. Partnering with platforms or service providers catering to these businesses can be lucrative.
Local Universities and Research Institutions:
Educational institutions often have substantial data needs, especially research departments. Forming partnerships can help cater to these specialized needs.
Telecommunication Companies:
Telecom companies often require vast data storage and could benefit from specialized data center services.
Financial Institutions:
Banks, credit unions, and other financial establishments require secure and reliable data solutions due to the sensitive nature of their data.
Government and Public Sector Entities:
Government projects often have extensive data requirements. Partnering or becoming an approved vendor can be beneficial.
In all partnerships, it’s vital to ensure that the benefits are mutual. Offering referral fees, discounted services, or bundled packages can incentivize these businesses to refer their clients to your company.
Building trust and maintaining a high standard of service will solidify these relationships and ensure a steady stream of referrals.
Marketing Offers
Offer Ideas for New Customers:
- Free First Month: Offer the first month of service for free when they commit to a 12-month contract.
- Bundle Deals: Provide discounted bundles for services like data storage, backup, and security when availed together.
- Referral Bonuses: Offer discounts or bonuses to those referred by existing clients.
- Free Migration Assistance: Help new clients transfer their data from another service or location at no extra cost.
- No Setup Fee: Waive the initial setup or installation charges for new clients.
Offers for Existing Customers:
- Loyalty Discounts: Offer reduced prices for clients who’ve been with you for over a year or two.
- Upgrade Bonuses: Provide free upgrades in storage or security measures as a thank-you for their patronage.
- Anniversary Specials: Offer special discounts or perks on the anniversary of their signup date.
- Feedback Rewards: Provide discounts or bonuses for customers willing to give feedback or testimonials.
- Refer-a-Friend Program: Existing customers can get discounts or bonuses for every friend or business they refer.
Sample Classified Ads for a Data Center Business:
- “Unmatched Data Solutions Await!” Secure, reliable, and affordable. Discover our state-of-the-art data center services today!
- “Your Data Deserves the Best!” Premium storage and backup solutions with top-notch security. Inquire now!
- “Move with the Future!” Upgrade to our next-gen data center services and experience seamless operations.
- “Data Overloads? We’ve Got Space!” Expand your business without data worries. Special offers for new clients!
- “Sleep Soundly, We Guard Your Data!” Round-the-clock surveillance and cybersecurity. Trust us with your data.
- “Fast, Efficient, Secure – That’s Us!” Join the best in the data center industry. Exclusive deals available!
- “Making Data Management Simple!” Hassle-free, scalable, and customizable solutions. Dive into the future of data storage with us!
Remember, these offers and ads aim to convey value and trustworthiness, reassuring businesses that their data is in safe hands.
Simple Marketing Ideas
Local Networking Events:
Attend local business events or join a chamber of commerce to meet potential clients face-to-face. Sharing business cards or brochures can be an effective way to introduce your services.
Social Media Presence:
Set up profiles on platforms like LinkedIn, X, and Facebook. Share updates, industry news, and client testimonials to engage and inform your audience.
Host Open Houses or Tours:
Invite local businesses to see your facilities firsthand. This not only showcases your infrastructure but also builds trust.
Email Marketing:
Start a newsletter with updates, tips on data management, and special promotions. This keeps your business in the minds of potential clients and nurtures relationships with existing ones.
Engage in Content Marketing:
Start a blog or write articles about data management, security, and other relevant topics. This positions you as an expert in your field and can attract organic website traffic.
Local Advertising:
Invest in ads in local newspapers , magazines, or radio stations . While digital marketing is critical, local outlets can still reach a significant audience, especially in specific demographics.
Leverage Customer Testimonials:
Encourage satisfied clients to share their positive experiences. Display these testimonials prominently on your website and marketing materials.
Partner with Related Businesses:
Form mutually beneficial partnerships with businesses that offer complementary services. They can refer clients in need of data center services.
Offer Workshops or Webinars:
Hold sessions on data security, efficient data management, or other relevant topics. This educates potential clients and showcases your expertise.
Engage in Community Events:
Sponsor or participate in community events, such as charity runs, local festivals, or educational fairs. It raises awareness about your business and solidifies your presence in the community.
Promoting a data center business requires a blend of traditional and digital strategies. While online methods offer vast reach and precision, local strategies foster community ties and trust.
The key is to remain consistent in your efforts and always prioritize genuine relationships.
See our marketing section for articles that will provide ideas to bring awareness to your business.
It is crucial to prioritize your skill set and assess your ability to operate a data center business.
Evaluating your skills ensures you can effectively manage the complex tasks involved.
If you lack a critical skill, remember that acquiring knowledge or hiring someone with expertise to fill that gap is possible.
Essential Skills for a Data Center Business Owner:
- Technical Knowledge: Understanding data center infrastructure, networking, and server management.
- Business Management: Efficiently handling operations, finances, and strategic planning.
- Customer Service: Delivering excellent client support and building strong relationships.
- Problem-Solving: Tackling technical and operational challenges with resourcefulness.
- Communication: Effectively conveying ideas and instructions to team members and clients.
- Adaptability: Being flexible to adjust to the dynamic nature of the data center industry.
- Security Expertise: Implementing robust measures to safeguard sensitive data and systems.
- Leadership: Inspiring and guiding the team toward achieving business goals.
- Project Management: Organizing and executing data center projects efficiently.
- Continuous Learning: Keeping up with technological advancements and industry best practices.
These essential skills equip the data center business owner to navigate complexities and excel in a competitive market.
Expert Tips
Exploring expert tips is beneficial for skill improvement, regardless of your expertise level.
Experts can discover more efficient approaches and gain new perspectives. Novices can learn countless tips to enhance their skills and knowledge significantly.
See the latest search results for expert data center tips to gain tips and insights.
Trends and Statistics
Examining industry trends and statistics offers significant advantages for a data center business.
It provides valuable insights into market dynamics, customer preferences, and emerging technologies, enabling informed decision-making and fostering a competitive edge.
See the latest search results for trends and statistics related to the data center industry.
Data Center Associations
Trade associations present several benefits, such as keeping businesses updated on industry news and providing valuable networking opportunities.
These advantages are especially prominent during events organized by the associations.
See the search results related to data center associations.
Top Data Center Business
Examining established data center businesses can spark ideas to identify untapped opportunities in the industry that you can implement in your own business.
It also aids in recognizing areas of improvement that may have been overlooked previously.
See the latest search results for the top data center businesses.
The Future of the Data Center Industry
Researching the industry’s future offers aspiring data center business owners valuable insights.
It helps understand upcoming trends, potential challenges, and growth opportunities, enabling informed decisions and strategic planning for a successful venture.
See the search results for the future of the data center industry.
Data Center Businesses for Sale
In the data center business, acquiring an existing operation has both advantages and disadvantages.
Benefits of Buying an Established Data Center Business:
- Immediate Revenue: You start earning revenue from day one of taking over.
- Skipping Startup Phase: Bypass the challenges of starting from scratch.
- Proven Business Model: You know the business is already functional.
- Financial Insight: Understand existing revenue, profit, and expenses.
- Existing Customer Base: Benefit from an established customer pool.
- Reputation: The business comes with a built-in reputation.
Disadvantages:
- Higher Cost: Acquiring goodwill and the customer base can increase the cost.
- Customer Transition: Changing business practices may lead to customer loss.
- Inherited Reputation: You acquire both positive and negative aspects of the business’s reputation.
Even if an exact match for a data center business isn’t available for purchase, exploring options within the same industry can provide valuable insights. Use the provided link to assess available opportunities.
Businesses for sale: See the latest results for a data center business and others related to this business model.
Franchise Opportunities Related to a Data Center
A data center franchise has advantages and disadvantages, making it essential to explore before starting a business.
Assessing these opportunities may lead to unexplored data center-related possibilities.
Pros of Buying a Data Center Franchise:
- Proven Business Model: Follow a well-established plan provided by the corporate office.
- Existing Reputation and Marketing: Benefit from the franchise’s established brand image and marketing efforts.
- Comprehensive Understanding: Gain insights into all aspects of the business before diving in.
- Corporate Support: Receive assistance and guidance from the corporate office.
- High Costs: Acquiring a franchise can be financially demanding.
- Limited Autonomy: Major changes require approval from corporate.
- Restricted Products and Services: You can only offer approved products and services.
- Operational Restrictions: Bound by the terms of the franchise agreement.
- Ongoing Fees: Pay ongoing franchise fees.
Even if an exact data center franchise match isn’t available, exploring franchises in the same industry through the provided link can unveil potential opportunities worth considering.
See the latest search results for franchise opportunities related to this industry.
Knowledge Is Power if You Use It!
Knowledge is a powerful tool in the data center business when applied effectively!
You can access abundant industry information online. Follow the links below for valuable insights that will aid you during research, startup, and full operation of your data center business.
Customer Expectations
See the search results related to customer expectations for a data center business.
Data Center Business Insights
Exploring tips and insights can spark innovative ideas, highlight pitfalls to avoid in managing your data center business, and significantly enhance your industry knowledge.
This process fosters continuous improvement and enables you to stay ahead in the competitive data center market.
See the latest search results leading to resources about Data Center Business Insights.
Data Center Industry Publications
Publications offer an excellent means to stay informed about the latest information in the data center business.
They provide valuable insights, updates, and industry trends, ensuring you remain up-to-date with relevant developments and advancements.
See the search results for Data Center Industry publications.
Data Center Industry Forums
Engaging in data center forums enables participation in trending discussions and fosters industry relationships.
It offers insights into customer perspectives, providing valuable and firsthand information for business growth and improvement.
See the latest search results related to Data Center Industry forums.
Courses offer an excellent avenue for learning and enhancing your skillset while staying updated with industry trends.
They provide valuable knowledge and insights to keep you relevant and competitive in the field.
See the latest courses related to Data Management and our management articles to provide insights and tips on managing Your business.
Data Center Blogs
Subscribing to data center blogs offers valuable ideas and industry updates.
You can explore various blogs, opting for regularly updated ones that provide value.
Curating a collection of such blogs ensures a constant flow of relevant information to enhance your knowledge and decision-making.
Look at the latest search results for data center blogs to follow.
Data Center Industry News
Staying informed about the Data Center Industry is easy through news updates.
Setting up alerts ensures you receive timely notifications whenever new developments are covered in the media.
Watching videos about the data center industry provides valuable tips and insights.
Exploring related videos on YouTube can also lead to unexpected topics, broadening your knowledge beyond what you initially sought.
See the links to YouTube Videos Below.
- Videos related to starting a data center business can be found here.
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Home » Technology
How to Start a Data Center Business [Business Plan]
A data center is a facility that centralizes an organization’s shared IT operations and equipment for the purposes of storing, processing, and disseminating data and applications. The average data center occupies approximately 100,000 square feet of space. On the other end of the scale, there are behemoth data centers that consume as much power as a mid-sized town.
The utilization of a data center allows a business to outsource its power needs. Organizations benefit from data centers in a variety of ways. Most specifically, they allow a company to focus on its consumer objectives instead of technological maintenance.
The United States Data Center Market was valued at USD 8.4 billion in 2020, and it is expected to reach USD 13.91 billion by 2026, registering a CAGR of 8.63% during the forecast period (2022-2026).
Steps on How to Start a Data Center Business
Conduct market research.
If you are considering starting a data center business, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process for your data center business should be to develop market-based research questions in line with your overall business goal and objective.
In this regard, you should source information that will help you maximize your business, information that will help you know what your potential market is looking for from a data center business, and also help you operate your data center business with strategies that will help you compete favorably and build the business to profitability.
a. Who is the Target Market for Data Center Business?
- Banks, Insurance Companies, and other related Financial Institutions
- Blue Chips Companies
- Corporate Organizations
- Manufacturers and Distributors
- Real Estate Owners, Developers, and Contractors
- Research and Development Companies
- The Government (Public Sector)
- Schools (High Schools, Colleges, and Universities)
- Sport Organizations
- Religious Organizations
- Political Parties
- Television and Radio Stations
- Printing Press (Publishing Houses) and Authors
- Branding and Advertising agencies
- Individuals and households who own computers
- Entrepreneurs and Start-Ups
b. Is Data Center Business a Profitable Business?
Yes, the data center business is very profitable. In recent times, the need for secure and reliable data storage has exploded, and is expected to continue to do so. That makes them great investments. Data-heavy devices will hit the market in increasing numbers over the coming years.
c. Are There Existing Niches in the Industry?
No, there are no existing niches when it comes to the data center business.
d. Who are the Major Competitors?
- China Mobile
- China Telecom
- DuPont Fabros Technology
- QTS: Atlanta Metro
- Range International Information Group.
- Switch SuperNAP
- The Citadel Campus
- Utah Data Centre
- Digital West
- Cloud Nine Realtime
- Equinix™
e. Are There County or State Regulations or Zoning Laws for Data Center Business?
Yes, there are county or state regulations or zoning laws for data center business, and please note that if you are planning to house your data center in a purpose-built facility or proposing an extension to an existing building, you must apply to your local planning department for approval.
An architect experienced in factory planning will draft your initial plans. They might collaborate with, or seek input from your local Fire Safety Officer to ensure that the appropriate safety measures have been accounted for, following the safety regulations as defined in the Regulatory Reform Order.
f. Is There a Franchise for Data Center Business?
Yes, there are franchise opportunities for data center business, and here are some of them;
g. What Do You Need to Start a Data Center Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- Business Facility
- Startup Capital
- Equipment and Gadgets
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a data center business are;
Creative Data Center Business Name ideas
- Emmet Group© Data Center, Inc.
- Brest Technologies® Data Center, LLC
- Bally Tryone© Data Center, Inc.
- Data Solutions® Data Center, Inc.
- Marshal Kings™ Technologies, Inc.
- Green Group™ Data Center, LLC.
- Cloud 24™ Data Center, LLC
- Techie Jones® Data Center, Inc.
- AmEx© Technologies, Inc.
- 3D Technologies© Data Center, Inc.
- Redo Technologies® Data Center, LLC
- Orange Group® Data Center, LLC
- Canto Technologies™ Data Center, LLC
- Fred Junes© Data Center, Inc.
- Back Upfront® Technologies, Inc.
- Dominic Perez™ Data Center, Inc.
- Reco Technologies™ Data Center, Inc.
- Purple Tree © Data Center, Inc.
- Big Network® Data Center, LLC
- Freo Technologies™ Data Center, Inc.
Register Your Business
A. what type of business structure is best for data center business.
When it comes to the business structure of a data center business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits. Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Data Center Business?
- General Business License
- Zonal Permits
- Signage Permit
- Operational State Facility Inspections
d. What Type of Certification is Needed to Start a Data Center Business?
- Cisco CCNP and CCIE Data Center
- Epi’s Certified Data Center Professional (CDCP)
- Epi’s Certified Data Center Specialist (CDCS)
- Uptime’s Accredited Tier Designer (ATD), Accredited Tier Specialist (ATS), Accredited Operations Specialist (AOS)
- BICSI’s Data Center Design Consultant (DCDC)
- VMware Certified Professional 2019.
e. What Documents are Needed to Open a Data Center Business?
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use
- Online Privacy Policy Document
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
e. Do You Need a Trademark, Copyright, or Patent?
No, you don’t need a trademark, copyright, or patent for your data center business.
Cost Analysis and Budgeting
A. how much does it cost to start a data center business.
The average startup cost for a data center ranges from $10 million to $25 million. A little less than half is spent on hardware, software, disaster recovery, continuous power supplies, and networking. Another large portion goes toward the maintenance of applications and infrastructure.
Please note that it will cost you about $1000 a square foot to build a small data center. That’s not taking into account that it can often cost over $10,000 per mile to have fiber installed to reach your location.
b. What are the Costs Involved in Starting a Data Center Business?
- The total fee for registering a business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services total – $3,200.
- Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $80.
- The cost for hiring a business consultant (writing of business plans inclusive) – $4,500.
- Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $12,400.
- The cost of software, accounting software, CRM software, and Payroll Software – $150,500
- The cost for leasing a facility (long-term lease agreement) – $235,600.
- The cost for facility remodeling and installations – $20,000.
- The cost for the purchase of hardware, equipment, and parts: $750,000
- Phone and utility deposits will cost – ($2,500)
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $90,000
- The cost for the purchase of office furniture and gadgets (computers, printers, telephone, TVs, tables and chairs et al) – $45,000.
- The cost of launching an official website – $600
- Miscellaneous – $2,500
c. What Factors Determine the Cost of Opening a Data Center Business?
- The size of the data center business
- The choice of location
- The required licenses and permits
- The cost of hiring and paying a business consultant and attorney
- The cost for branding, promotion, and marketing of the data center business
- The cost of furnishing and equipping the data center business – facility
- The cost of insurance
- The cost of registering the business
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
Yes, you would have to build a new facility for your data center and it will cost you a minimum of $10 million and the rate of $1000 a square foot to build a small data center. That’s not taking into account that it can often cost over $10,000 per mile to have fiber installed to reach your location. The average data center occupies approximately 100,000 square feet of space.
e. What are the Ongoing Expenses of a Data Center Business?
- Computer and server parts
- Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
- Salaries of employees
- Hardware maintenance
- Marketing costs
f. What is the Average Salary of your Staff?
- Chief Operating Officer (President) – $60,000 Per Year
- Data Center Operations Manager – $48,000 Per Year
- Admin and HR Manager – $42,000 Per Year
- IT Specialists – $41,800 Per Year
- Network/Computer System Engineers – $40,000 Per Year
- Marketing and Sales Executive (Business Developer) – $36,000 Per Year
- Accountant – $36,000 Per Year
- Help Desk Officer – $33,100 Per Year
g. How Do You Get Funding to Start a Data Center Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
- Source for soft loans from your family members and your friends.
Write a Business Plan
A. executive summary.
Cloud 24® Data Center, Inc. is a registered and licensed data center business that will be based in Los Angeles, California. We are in business to store data for both the United States and international market.
Cloud 24® Data Center, Inc. has been able to secure all relevant licenses and permits to operate in the United States. We will ensure that we abide by the rules and regulations guiding the data center and IT industry in the United States of America.
b. Products and Service
- Storing, processing, and disseminating data and applications.
c. Mission Statement
Our mission is to ensure that we build a successful data center business that will not just work for clients in the United States of America and Canada, but all across the world; a company that will boast of having some of the best and most reliable Engineers and Technicians in the United States of America.
Vision Statement
Our vision is to become one of the preferred choices when it comes to storing, processing, and disseminating data and applications in the United States of America.
d. Goals and Objectives
The goals and objectives of a data center business are to engage in storing, processing, and disseminating data and applications for its clients.
e. Organizational Structure
- Chief Operating Officer (President)
- Data Center Operations Manager
- Admin and HR Manager
- IT Specialists
- Network/Computer System Engineers
- Marketing and Sales Executive (Business Developer)
- Help Desk Officer
Marketing Plan
A. swot analysis.
- Excellent operational history
- Attention to detail.
- Experience and trained professionals.
- Large manufacturing facility.
- Excellent customer testimonials.
- Safe, reliable, and efficient storing, processing, and disseminating data and applications process.
- Not enough existing clientele to run at full capacity immediately
- The owner is new to large scale marketing
- We will need a loan to build our facility and to purchase hardware and software
- Lack of economies of scale.
Opportunities:
- Growing acceptance of data centers in the United States.
- Build upon existing clientele
- Online market, new services, new technology, and of course the opening of new markets.
- Increase in technological activities on a global scale.
- With the rapid advancement of technology, data centers may likely become obsolete in the nearest future.
- Loans diminish profitability until they are paid off
- The first year will be financially tight while we gain customers and pay off loans
- Competition in the area could increase
- Management of employees requires time, money, and efforts
- The regulatory authority could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses.
b. How Do Data Centers Make Money?
Data centers make money by;
- Storing, processing, and disseminating data and applications process.
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Introduce your data center business by sending introductory letters alongside your brochure to businesses, corporate organizations, schools, and key stakeholders within your market space
- Print out fliers and business cards and strategically drop them in offices, libraries, public facilities, train stations et al.
- Use friends and family to spread the word about your business
- Post information about your company on bulletin boards in places like schools, libraries, and local coffee shops et al
- Place a small or classified advertisement in the newspaper, or local publication about your company
- Leverage on referral networks
- Advertise our business in relevant magazines, newspapers, TV and radio stations.
- Attend relevant expos, seminars, and business fairs et al to market our firearms
- Engage in a direct marketing approach
- Encourage the use of word-of-mouth marketing from loyal and satisfied clients
Financial Projection
A. how much should you charge for your service.
A data center will either charge you a flat rate for your consumption or will meter your usage. If you use more than 300kW, then you probably would be better paying the metered rate. On average, you will find data centers renting Us of rack space out for $100 to $300 per U per month. Generally, this monthly fee will include a pre-set allotment of bandwidth and IP addresses.
b. How Much Profit Do Data Center Business Owners Make a Year?
On average, a data center business owner is expected to make $9.9 million per annum.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the data center business
- The location of the data center business
- The management style of the data center business
- The business approach of the data center business
- The advertising and marketing strategies adopted by the data center business.
- The number of years the data center is in business
d. What is the Profit Margin of a Data Center Business?
The profit margin of a data center business is not fixed. It could range from 22.5 percent to 45.85 percent.
e. What is the Sales Forecast?
Below is the sales forecast for a data center business it is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year (FY1): $11 million
- Second Fiscal Year (FY2): $30 million
- Third Fiscal Year (FFY3): $45 million
6. Set Up your Office
A. how do you choose a perfect location for your data center business.
- The demography of the location especially as it relates to ICT activities
- The demand for the services of data centers in the location
- The purchasing power of businesses in the location
- Accessibility of the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Data Center Business?
- Los Angeles, California
- New York City, New York
- Fort Smith, Arkansas
- Atlanta, Georgia
- Tucson, Arizona
- Orlando, Florida
- Fort Wayne, Indiana
- Columbus, Ohio
- Jefferson City, Missouri
- Baton Rouge, Louisiana
c. What Equipment is Needed to Operate a Data Center Business?
- Environmental Control Equipment.
- Server Racks.
- Redundant Power Sources.
- Cable Management Supplies.
- Computer & Network Equipment).
Hire Employees
When it comes to hiring employees for a standard data center business, you should make plans to hire a competent chief executive officer (you can occupy this position), data center operations manager, admin, and HR manager, IT specialist, network/computer system engineers, marketing and sales executive (business developer), accountant, help desk officer and security guards.
Launch the Business Proper
In recent times, no data center business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening party if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the data center business, you will officially inform people in your city that your data center is open for business.
a. What Makes a Data Center Business Successful?
- Choose a good location and facility to launch the business
- Secure reliable and efficient software and hardware
- Come up with a unique concept for the business
- Partner with key stakeholders
- Hire only competent, hardworking, and trustworthy staff
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your data center business
- Leverage all available online and offline platforms to promote your data center business
b. What Happens During a Typical Day at a Data Center Business?
- The business is open for the day’s work
- Customer’s requests are taken and they are scheduled or attended to
- Schedule and ongoing maintenance of infrastructure are carried out (equipment and systems monitoring, formalized staff training, thorough procedures, and regular maintenance, disaster recovery, and networking)
- Marketing/website upkeep
- Administrative duties
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Data Center Business?
- Excellent ICT skills
- Ability to pay attention to details
- Customer services skills
- Interpersonal skill
- Business management skills
- Work experience in the data center and management industry
- Experience in managing people
- Experience in business administration
- Experience in handling different types of hardware and software.
COMMENTS
Cost of launching a website – $200,000. Cost of throwing an opening party – $50,000. Miscellaneous – $1,749,250. From the above requirements, we would need the sum of $35,000,000 to be able to start and successfully run our data center business here in Houston – Texas.
Receive investment from partners, investors or business angels. 14. Choose a Suitable Location for your Business. You need a well secured area where there is no chance of flood. Clients would not have to visit your data center so there would be no need to locate your data center at a commercial district.
How to Write a Data Center Business Plan in 7 Steps: 1. Describe the Purpose of Your Data Center Business. The first step to writing your business plan is to describe the purpose of your data center business. This includes describing why you are starting this type of business, and what problems it will solve for customers.
Your data center’s business plan may evolve with experience. Regularly reviewing and optimizing the document is advisable as your business grows. This allows you to make necessary changes and adjustments to align your operations with your long-term goals. A Fictitious Business Plan Example for a Data Center. Executive Summary
The security and maintenance of this type of center is vital, as it could mean the end of a company. But that will not happen, because your data center is the safest in the world and has the best possible organization, because you have organized your business plan with this futuristic template, full of resources.
Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $80. The cost for hiring a business consultant (writing of business plans inclusive) – $4,500. Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $12,400.