Its a cut throat world I am afraid - I used to do hosting for 7 years or so before I saw the business going downhill.
As long as you can offer your customers something that no one else is doing then you have a foothold in the arena.
If you are going to start something like this, look at someone like Vidahost and buy a reseller account. That way you can test the water and see if you can drag in some customers.
If you start doing well, progress to a VPS and then on to a dedicated (although I prefer having a few VPS servers over a single dedicated)
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