You don't need to be computer wizard to own a website. You don't have to know much about XHTML, servers, or SQL injection attacks. "Great!" you say. However, as with anything that costs your business money, you should make sure you understand what your actual needs are, prior to writing the check.
Wouldn't that be great? There actually are companies you can find on the Web that will "give" away hosting and let you get your website up and running without having to pay a penny. The problem is that it's not really free. In exchange for not charging you for the hosting, your website will be required to display advertising which the hosting company then sells (of which you don't get a penny.) Many "free" hosting companies also require that your site's address (domain name) be an extension of their own. For example, example.com/sites/yourcompanyname/ instead of yourcompanyname.com. This dilutes your own company's image and branding.
Even if you're okay with not having your own domain name, and sharing advertising space on your site, you may want to consider the full effect this could have on the image of your business. The next time you visit your favorite restaurant, imagine what it'd be like if, to save on costs, they'd sold advertising space on their signs, menus, table-tops, napkins, and windows. Then imagine if their competitors had purchased some of that ad space. Not a great impression. And like a restaurant, your website is an experience (good or bad) for each visitor.
The same arguments can be made for email addresses. While using the free email services available through AOL, Yahoo, Gmail and others can be great for individuals, why waste the marketing opportunity for your business? Every time you send an email out from your Yahoo email account, you're advertising for Yahoo, and reinforcing Yahoo's brand instead of yours. Why not let your business benefit instead? Make sure all your email comes from firstname.lastname@example.org. (Well, not literally. You'd use your own company's domain name.)
Nope. It's a popular trend in the very competitive hosting business to set up hosting plans that offer unlimited (usually shown in capital letters to make sure you see it) disk space and monthly bandwidth. (Bandwidth is the measurement of the amount of traffic your website can use each month.)
While it sounds like a good deal, it is an impossible promise for the hosting company to keep. No hosting company in the world has an unlimited number of servers, or an unlimited capacity to handle unlimited bandwidth. What they are counting on is that most people don't use their full monthly allotment of bandwidth, or all their available disk space that comes with their hosting plans. That means the companies can "oversell" the number of people on their servers, by pretending there's more space and bandwidth than are technically available. However, if you tried to take them up on the offer of "unlimited" you'd quickly find out (and it's usually in the fine print of their service contracts) that there are phrases like "reasonable use" that will suddenly apply to you and cause limits to suddenly exist. Technically this amounts to false advertising, but no one seems to be calling the hosting companies on it yet.
Don't be fooled. If it sounds too good to be true, it probably is, and you do typically get what you pay for.
Does your business need to have website access and functioning email 24 hours a day, 7 days a week? Is it critical to your business that large numbers of people can visit your site at one time, without crashing the server? If you're a small business but answered "yes" to these questions, you may be disappointed to know that the most commonly used hosting solutions are probably not for you.
If your website is "mission critical" you should probably invest in what's called a "dedicated" server. This means that your website gets it's very own server, and doesn't have to share resources (memory, performance, etc.) with other websites. Dedicated servers are not cheap, and start around a couple of hundred dollars a month. The differences in cost are most often the quality of the hardware, and the amount of monitoring and service that come with the package. These types of hosting plans will often include setup fees and software licensing fees.
A slightly cheaper version of these types of plans are "virtual private servers" (or VPS). These are created by taking a dedicated server and setting up several virtual servers running side by side—each with it's own website and operating system supporting it. While you share the physical server, each site still gets its own resources. The cost is less because you're sharing some of the expense, but you still have individual control over the complete environment your website lives in.
Most of the hosting you see advertising for is called "shared" hosting. It's cheap, because essentially you share the server (both physically and all the software resources) with any number of other website owners. While the cost is nice, it's less reliable than a dedicated server, because you never know if one of the other site owners you're sharing the server with is sending out tons of spam, setting up phishing websites, or otherwise misbehaving. Since your website shares the same server IP address as these unknown potential hooligans, you share in that IP's reputation around the Web.
People who abuse hosting can also cause the server to freeze by running memory intensive scripts and programming, and if the server crashes, your site does too. Even someone doing nothing illegal can bring a server down, just by creating a site that becomes wildly popular. If your website shares their server, the more their website uses of the server's memory and performance, the less there is available for yours.
So how much to spend? It depends on what you need. Most small business websites will do just fine on a shared hosting plan. How much disk space and bandwidth you need will depend on what your website does, and may change over time. But if your business relies completely on your website, or you find yourself featured in national media (so now everyone in the country wants to visit your site) or are a fast growing company, you may want to go in for a dedicated server.
Make sure your hosting is part of the conversation you have with your website designer or development professional, and don't be afraid to ask questions.