William, just some things for you to think about.
The first is: cheap isn't always the best, not for you, and not for your client.
Clients often see cheap as being cheap, hence they treat it as cheap. Charge them and they have more respect for your time/effort/work and appreciate what they are getting. And as stupid as it seems, the more you charge the smarter/special/important you make them feel.
I know some-one that lives and owns a business on the Gold Coast and this year they paid $4000.00 for a home page, $200.00 hosting per month, and they were charged every time they wanted the home page updated. Now that beats building websites for free. Sad part to this story is that this is my daughter. I guess it made her feel important/ special/ successful.
It is far smarter to create one website and charge $100 than it is to build 100 websites and charge $1.00 each. Think about it, you need to find 100 clients. Then there is all the time involved in producing a product for them. Then you are looking at keeping 100 clients happy, all for nothing, or $1.00 each, and that will quickly feel like nothing.
You live in New Zealand (I struggle to believe this is where you were born), you should have an unlimited account with telecom or vodafone, or whatever. If you really want to make money out of hosting, and have total control, set up your own server. You can have a good setup for just about nothing. I'm sure you would have friends/contacts that would help, if you really needed it. Now you can offer cheap hosting on trademe and it doesn't need to be only for websites that you build.
You can even build some sites (complete with hosting) and sell them on trademe.
If I were to build a website for some-one my first questions would be:
1. what does your business do
2. Do you have a domain name yet.
3. Can you provide me with some pictures/photos relating to your business.
4. I will need a $250 deposit, is that a problem.
So lets say they are a New Zealand business, and they are called Pretty Underwear.
The first thing I would be doing is registering a domain name "prettyunderwear.co.nz"
I would then upload some kind of home page (just a starter) and send the client the link. As soon as they see their name in that url you are well on your way to having a client that will work with you. From there on you work with your client building the home page they want. I would also provide a link from the home page to a blog that already has their business name on it. If they dont want the blog then thats ok, its just a cheap template anyway. But its also another chance for them to see their business name on the internet. They didn't ask for a blog, they didn't even think about a blog, but you offer it as part of your service. They can either ignore the blog, or its something they can start using immediately to attract client attention.
Remember if they ever want to leave your hosting service, you own the domain name. That is the domain name all their clients know, what value does it have. Owning the domain name would be a good way of retaining clients.
Paying some company $99 to provide graphics for a year is a waste of $99. You need some-one that has an interest in providing what the client wants. Either team up with some-one on a 50/50 basis, or pay some-one to do the graphics for each project. Or learn it yourself, its not that hard.
Just some thoughts from some-one stuck in ChCh - New Zealand