| A good rule of thumb for any business is to have one full year of operating expenses (including a reasonable income for you) in the bank before starting, if you're going the full-time route.
If you're trying to bootstrap a part-time business, I'd say to go with a small VPS as a starting point. The monthly fees won't kill you and there's plenty of room for shared hosting accounts. For example, a decent VPS might cost you US$100 a month, but since you can reasonably put 80 web sites on it at $24.95 each, that's $1996 in gross sales and a $1896 gross margin per month... nice return on investment. :-)
Something else you should look for is a VPS hosting company that's not interested in shared hosting any more-- and then convince them to refer their shared hosting inquiries to you since it will mean that you will continue to use their services and expand on what you buy from them.
I would say that most good hosting companies evolve naturally from shared to VPS to dedicated as they grow... After all, why bust your back landing $4.95/month hosting when you can land $250/month dedicated servers? | 
Since I calculate the difference between reseller/VDS and real dedicated with more B/W and space is just not much different 
Linear Mode
