The best way to explain this is by comparing it to a real-life (brick & mortar) situation. Picture a web hosting company as the owner of a shopping mall. The shopping mall owner invested a lot of money on hiring architects, constructors, engineers, etc. to build it. Now all the stores on it are empty and the owner is going to rent them to smaller businesses that can't afford (or who simply don't want) their own building.
As a small business owner, you can rent this store space on a per-month basis. But remember it is empty. So it will be your responsibility to decorate your store, fill it up with your own products, furniture & displays and to advertise your store to the world in order to get new customers.
The responsibility of the shopping mall owner is to keep and maintain the building in a top condition for your business to prosper. In the exact same manner, a hosting company invests a lot of money to set up high-speed connections and a full-fledged data center. And as a small business owner, you may rent virtual space on the web to set up your store and offer your products or services to the world.
When you set up your account it will also be empty and it will be up to you to design your own website (or hire a web designer to build one for you), and to advertise it to the world.
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Sean Felker is the publisher of the very successful and popular Work at Home and Making Money on the Internet blog: