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If you've ever started a new Internet business, you're probably quite familiar with the siren's song of cheap web hosting. But while most webmasters simply wrinkle their noses at the merest suggestion of budget hosting, I prefer a more holistic approach to the topic.

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Every business decision is a balance between cost and benefit. For the neophyte webmaster, it's easy to forget this principle and blindly follow the well-intentioned advice of industry veterans. Normally, this is a good thing to do. But no advice should be followed blindly, especially when it comes to your business. For all their experience and expertise, none of those gimlet-eyed webmasters have the perspective to say exactly what is right for your particular set of circumstances.

"Since entering the US market a year ago, 1&1 Internet has become one of the country's 10 largest web hosting and domain name registration companies." The WHIR, January 2005 Netcraft 1& 2004 Hosting Growth Leader Netcraft, January 2005 webhosting.info "Making it onto the U.S. Top 10 Web Hosts List in such a short duration is truly a remarkable achievement. We typically don’t see such significant movement in the U.S. hosting market."

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Before you cast aside cheap web hosting as a viable option for your site, consider this: Very few eCommerce sites see much traffic at all in their initial start-up period. Much of the work you'll be doing over the coming months and years will be largely experimental - testing traffic and consumer response from a number of different advertising sources, honing and tweaking your site, and generally figuring out how to build your business.

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During the initial phases of any new online venture, I always host my sites on a cheap web host. For me, there's no need to buy an expensive dedicated server or rack space for a project that very well might not pan out at all. Even if it does pan out, I find very little benefit in paying the additional cost in those early months when my traffic is practically nil. The key for me is choosing a low-cost hosting plan that has a decent reputation for uptime and service, and leaves room for growth.

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In short, I walk the web hosting line. I don't overbuy hosting for any of my web sites, I buy what they need. For a new site, this generally means shared .NET hosting in the $10 per month range. As the sites grow, I add on a-la-carte features such as SSL certificates. When traffic or disk space begins to stretch the bounds of the original plan, I look to upgraded packages wherever I might find them. With a bit of shopping around, you can sometimes find really good deals on hosting - I recently found a VPS plan that was cheaper than my current shared plan.

Derek Vaughan, a respected web hosting industry analyst and Chief Marketing Officer of TechPad Agency (www.techpad.com) commented on the new offering, "IPOWER has already clearly established a leadership role in the small business web hosting space. This new offering will open up a vast new market for IPOWER in the personal web hosting space. As blogs and personal web site demands grow, IPOWER is now well positioned to meet this emerging market need."

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Which brings me to my next point - Don't be afraid of migrating to a new web host. When done properly, the switch can be made quite seamlessly and with no downtime (I'll cover the exact procedure I follow in a later article.) Being able to change web hosting providers easily and effectively is one of the simplest ways a webmaster can shave dollars off of his or her hosting budget. I recently had a site hosted on a shared Windows server for $4.99 per month with unlimited bandwidth. That sounds like a great deal unless you happen to know (as I do) that this particular hosting company has a tendancy to shut sites off that consume too much bandwidth. When I found that my site was starting to garner more and more hits per day, I simply switched it over to a new host. The money I had saved in the meantime allowed the site to be profitable, and that always makes me feel good. And the best part is that I accomplished this with no interruption of service and very little effort.

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The bottom line is that cheap web hosting isn't necessarily bad. If your site isn't pulling in that much revenue, your hosting costs could be the only thing that stand in the way of profitability. All it takes is a little research into the hosting company you plan on using. Make sure that it has a good reputation as being reliable (look it up on my web hosting review site to help with that) and that it gives you JUST enough of what you need to start out. Make sure you keep a very close eye on it, and have your next move planned already when it gets close to migration time.

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I have just one final note to offer. Don't for a minute assume that because a plan is priced higher than a competitor it is automatically more reliable or robust. In my many hours of comparing, aggregating, and reviewing hosting plans I have found that price is usually the least reliable means of comparison. Always look to quality above all else, and your site will be the revenue producing machine you've always envisioned.

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Nate Landerman is the founder and CEO of iNetpublication, a site dedicated to providing webmasters with the tools they need to create and maintain successful websites.

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Nate Landerman is the founder and CEO of iNetpublication, a site dedicated to providing quality resources to Internet professionals. For more information on web design, web hosting or internet marketing, please visit iNetpublication Web Services.