We host several agencies' clients' websites. The majority host their clients' websites across several managed servers (VPS or dedi). They opt for managed servers because they don't want to deal with upgrades, patching, or day to day server work. It frees up their time substantially (dev work is time consuming too).

But the choice between VPS and dedi depends on several factors (traffic, requirements, compliance, projections, etc). I always recommend starting small unless the business whose website being hosted is already established.

As far as the hosting platform is concerned, you should always seek to leverage a control panel. This is one of those things you wish you had only after you're stuck without one (we support panel-free servers too). Your clients don't need to contact you for every little change they need to make.