I'd say that for a successful hosting business one has to find a niche market. Specialize in something that is in demand and for which there isn't many specialists providing the service. Free hosting was very popular a few years ago when hosting was more expensive and difficult to get so it was easy to make money with traffic then. Post4host forums were doing incredibly well with lots of traffic and forums were buzzing with activity to the extent one needed at least a few mods to manage the Forum. So I'm not so sure how viable that is any longer as a number of those active forums have died and I don't see that busy atmosphere any longer at post4host forums. It's just too easy to get quality hosting space at very cheap prices, and people have become too lazy to post for hosting any longer. Also the advent of smart phones and Facebook have killed a lot of the Forum activity too.
The little bit I know looks as though where money can be made is with web development and design. And then to use your hosting accounts to help set up clients and deliver a service to them. Instead of just distributing free or paid hosting accounts you should provide a specialist niche service to individual clients and charge them a price for it.
@perryoo11 is moving into a great direction for example with developing a panel which can be licensed and sold. Panels are obviously in demand. So similarly if you could detect a need for a specialist service that you don't see many specialists are providing in hosting, then you can try and develop a product like that too.
Bottom line. You need to develop a business plan first, and then figure out how you can monetize the service, like make money out of it. You can't just go blindly into it and hope something will happen that will bring in the big bucks. You have to check out examples on the Internet and google this subject to death first.
Thank you to Post4VPS and VirMach for my awesome VPS 9!