A friend of mine mentioned that a colleague of his made good side money providing hosting to local small businesses using drupal. He basically rented a VPS and put multiple sites on it. This got my interest and I've been trying to research how to go about it.

I was hoping someone familiar with Drupal and the LAMP stack could advise me as to how feasible this is. Can I just do a Multisite installation? Or do I need to use multiple drupal codebases? What bottlenecks will I run into? Also, any thoughts as to how to manage it? I had thought to offer a kind of retainer for web design bundled with the hosting. Anyone tried something like this?

Thank you for all your help.