Today e-commerce has become a massively lucrative channel for retailers. However, the quality of the hosting services that many small businesses are using often leaves a lot to be desired. A recent report showed that one in three Britons have abandoned their online transactions because of poor website design and inefficient hosting.

Research from hosting company 1&1's '2011 Digital High Street Audit' finds worryingly low levels of consumer satisfaction with the small business websites available to them. The risk to firms from providing a bad online experience is clear – 49 per cent of consumers believe that a bad website makes a worse impact than a business having no website at all. This conclusion has led 37 per cent to walk-away from companies completely, in favour of using a competitor. An additional 9 per cent of Britons have found themselves reducing their spend with small companies as a direct result of being deterred by a poor company website.

Oliver Mauss, CEO, 1&1 Internet said: "Research shows that keeping an ugly or badly functioning website online can comprise a risk to sales revenue. Consumers have ever higher expectations, and it is essential that every company website inspires confidence. Businesses that invest carefully in their web experience will see higher levels of customer spend, retention and referral".

Choosing the right server to host your website

The hosting services your business can choose from will usually mean making a decision whether a shared, dedicated or cloud based server is right for your business. Very small businesses will usually opt for a shared or managed service as these are sometimes called. Costs are low, but your business will be sharing its server with several other enterprises.

"Businesses that invest carefully in their web experience will see higher levels of customer spend, retention and referral". Oliver Mauss, CEO, 1&1 Internet

A dedicated server as its name suggests is just one server reserved for your business. Dedicated servers are not as expensive as they once were and can make economic sense if you want your business to have its own server platform and not have to worry about other businesses on a shared server impacting your online business if they have problems.

It is important to look closely at the service level (SLA) that will be attached to your dedicated server. Look for any additional costs such as maintenance, or other 'extras' that are not covered in the rental cost. And lastly, try and buy server space that you can expand into. You don't want to find after a few months that you have outgrown your server and need to move to a new one.

Lastly as the cloud has made a major impact right across the business environment, business website hosting has also been touched by the cloud and now offers an alternative to the traditional hosting methods. The power of cloud hosting is the flexibility it offers. In effect your business can buy just the space and hosting services it needs now and expand at anytime with no disruption to business.

Abby Hardoon, Founder and MD of second generation web hosting company Daily.co.uk says: "Hosting is very much a horses for courses thing - it's a question of getting the best and most appropriate solution that you can afford. There's no need to hamstring yourself financially, though. If you're just starting out or you're a relatively small business and you know your way around a server, you might like to consider a Virtual Private Server (VPS), for example - they provide the flexibility of a dedicated server but at a reduced cost.

Your business hosting checklist

There's more to choosing a web host than just choosing the right server, you should also consider other parts of the service including the domain name. Business host PEER 1 Hosting offered this advice when choosing a hosting service for your business: