I have done exactly what you speak of before. I found the industry has a very strong barrier to entry, but here is what I did.
- Rented a dedicated server with a control panel, in my case Plesk (linux or windows)
- Bought a domain name to be the "home" of my hosting business
- The server you buy will likely come with 4-7 IP addresses, you can use these to establish nameservers.
- Got a Billing platform that integrated directly with plesk for instant setup, in my case ModernBill
- Get yourself well versed in Linux/Windows security, because as Plesk will handle most of the setup for you of your hosting environment (email, apache, application, dns, etc), it will not do much to really secure the box.
Among many many other little things along the way.
Basically, you can do it all from one server, and if it is beefy enough, you can probably host 100 or so very modest websites on it, but you will find a lot of trouble competing.
In my personal experience, I wound up with about 20 customers, and I was at the break-even point dollars wise, but I was unable to really support the customers and servers as I wanted, being a solo operation. I was not making enough money or growing enough customers fast enough to expand the business so I wound up closing it down.
One thing you really need to consider is the commitment you are making. Once people have a site hosted with you, you are not only dedicated to keep the business going for them, but to maintain uptime and stability. You can't just log into the server at your whim and do things that might affect your uses.
If things start going south, and you decide not to purse the business anymore, it is a real headache assisting your customers with finding a new host, and migrating them to it.
I don't mean to discourage you, but as others have said, it will be near impossible for you to compete with some of the other hosting providers out there, especially in terms of bandwidth/disk storage.