Best Way to Start a Website Hosting Service?
If you are just starting out, the way to go would be to get a dedicated server with hosting management software such as cPanel/WHM, preferrably from a company that will provide some management for you as well. There is also the 'reseller account' approach but for a variety of reasons I don't really recommend it (e.g. there are more potential and real problems which are outside of your control, and it becomes harder to do your support, among other things). If you aren't really prepared to make the $160-500/month investment for a decent server with some management, you might be better off pursuing a different opportunity.
Warning: You need to differentiate yourself somehow. This is a highly competitive market.
<plug type="shameless">We provide managed servers for a number of hosting companies. You worry about the billing and supporting your customers, we'll worry about your server and supporting you.</plug>