Not to trash your business plan, but I do think most people these days who look for a website are savvy enough to at least want their own domain name. If they know nothing else, they know they want
www.myname.com, rather than myname.yourname.com.
That said, I also think a reseller plan would work best for you. I know you were talking about cost, so your other option would be to choose a host you like, and then 'resell' their smallest personal hosting plan to your own customers - you would buy it from the hosting company, then set your own price and sell it to your customer. This would leave you in the situation of managing their hosting account, and giving them access to the server at the same level you have (you'd have limited access with a shared plan). Doing this would likely MAKE you less money in the long run.
The advantage of the reseller account on a VPS is that you have control over your server, and can add your clients and give them the exact amount of space you want, set the prices you want, etc. Most VPS plans come with an interface such as C-Panel or Plesk that allows you over-all access to all accounts on the server, but at the same time provides a separate interface for your clients. They can set up their own email accounts, change their FTP passwords, etc, which eliminates them asking you to do all this for them. But their access is limited, so they can't 'break' your whole server.
Another advantage is that most hosts have levels to their reseller VPS plans - you can start by buying the smallest package for just you and a few others, but when the time comes to upgrade to a higher packages with more space, etc, it is often just a matter of upgrading your license with your host - not moving all your sites to a new machine as you need more space. Ask this of the host before you buy - hopefully you will have a lot of clients, so upgrading features is important!
In the domain name area, if you do decide to go with reseller hosting and allow your clients their own domain names, many hosts ALSO offer domain reselling - you can actually register domains for your own clients by using their reseller programs, which is another level of service you can provide, and another avenue for some profit for you.
I hope this has been helpful, but yes, definitely do your research to find the deal that will work for you.