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I want to buy hardware
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I want to buy hardware

Hey, I have started a VPS company, but currently I am renting the dedicated servers and selling I am unable to compete with the players, So I am thinking of owning my hardware and taking some loans for it. Will it be a good idea to invest in this hardware and scale my business? Asking for expert advice!

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Comments

  • If you have so little knowledge of the economics of it, then it sounds like a very bad idea to take a loan.

  • @blorged said:
    If you have so little knowledge of the economics of it, then it sounds like a very bad idea to take a loan.

    Yes its true but I have some clients who is paying me for years now. But yeah I dont know the business very well as I just completed one year only.

  • What happens if you can't pay the loan back? Prison? Banckruptcy?

  • @wadhah said:
    What happens if you can't pay the loan back? Prison? Banckruptcy?

    Ahh, I think I can repay the loans easily if my subscribers don't back out :p

  • davidedavide Member
    edited January 20

    I recommend buying a Supermicro for your business-critical needs, I can ship anywhere in the EU thanks to postal subsidies.

  • @samratfkt said:
    Hey, I have started a VPS company, but currently I am renting the dedicated servers and selling I am unable to compete with the players, So I am thinking of owning my hardware and taking some loans for it. Will it be a good idea to invest in this hardware and scale my business? Asking for expert advice!

    What is currently stopping you from putting the numbers down on paper of what your cost would be, the loan interest, profit and risk? The fact you haven't already and asked generic question on forum kind of answers your question...

  • @TimboJones said:

    @samratfkt said:
    Hey, I have started a VPS company, but currently I am renting the dedicated servers and selling I am unable to compete with the players, So I am thinking of owning my hardware and taking some loans for it. Will it be a good idea to invest in this hardware and scale my business? Asking for expert advice!

    What is currently stopping you from putting the numbers down on paper of what your cost would be, the loan interest, profit and risk? The fact you haven't already and asked generic question on forum kind of answers your question...

    I am just asking if someone already followed this path someday who can guide me .

  • Chex2Chex2 Member

    @samratfkt said:

    @TimboJones said:

    @samratfkt said:
    Hey, I have started a VPS company, but currently I am renting the dedicated servers and selling I am unable to compete with the players, So I am thinking of owning my hardware and taking some loans for it. Will it be a good idea to invest in this hardware and scale my business? Asking for expert advice!

    What is currently stopping you from putting the numbers down on paper of what your cost would be, the loan interest, profit and risk? The fact you haven't already and asked generic question on forum kind of answers your question...

    I am just asking if someone already followed this path someday who can guide me .

    You need to become savvy with this if your business is to have any hope. Basically you'll have the capital expenditure of the hardware itself, which varies greatly depending on the vendor you pick (compare e.g. ASRock Rack vs Dell to see what I mean), configuration and vendor support. This part requires a lot of careful consideration as you don't want to buy a pile of gear that ends up not being fit for purpose.

    Then you must factor in the ongoing operational expenses. Basically the cost of colocating the hardware, IP transit, the IP resources themselves, fees for third party services (e.g. LIR or RIR). Many small hosts earn just enough to pay off their expenses, so before even applying for a loan, you really need to consider whether you'll be able to keep up.

    Is your business entity even properly setup to protect you from the consequences of its potential downfall? Basically is it an LLC or your regional equivalent? If not, definitely speak to an accountant before taking out any loans or you could royally fuck yourself over.

    Renting hardware abstracts away a lot of the technical and administrative headache, though you can choose to bite things off piece by piece. For instance, you can colo hardware with a provider that will handle all the networking for you.

  • @samratfkt said:

    @wadhah said:
    What happens if you can't pay the loan back? Prison? Banckruptcy?

    Ahh, I think I can repay the loans easily if my subscribers don't back out :p

    Yes but imagine worst case scenario, what if the business fails and you cant pay the loan back, what happens then?

  • gksgks Member
    edited January 21

    Loan is a bad idea at personal level, you must have pvt entity, loan must be offered to pvt entity without any liabilities to you. In case of loss, your company shutdown, the bank has nothing to take away, but those old hardware. As many Indian cheat this way, they invest little, then pay bank manager commissions, influence them, take loan from the bank, pay commissions, route the initial investment to cash out, then take out as much money possible in other way, finally default the loan. Once every years, govt write off debt from the Bank, so that person again launch another business with same model. I don't recommend this scam.

    But de-associate yourself from business liabilities or you must be rich enough to loose something.

    Typically if you buy hardware, every year, the price of the hardware will decline, inflation rises, loan interest will be burden for you. You cannot see someone, calculate only profit margin, by having your own hardware, you need a remote hand, a person to attend issues, that would cost a ton, until you live near by. Always having a co-founders at least 3 or 4 would be ideal in the business.

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