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Affordable Website BudgetSmall busi­nesses and startups often seek affordable web­sites — but what makes a website “affordable”? How do you set a website budget?

In fact, it mainly depends on whether it’s a per­sonal site, or a business site.

Why? Because con­trary to popular impres­sions, per­sonal web­sites often cost money. Suc­cessful business web­sites do not.

Yes, you read that right. In the same way, a “cheap” business site can easily end up costing you more than fin­ancing a more pro­fes­sional one.

That isn’t very intu­itive, so allow me to explain…

Tip: Click the dots on the right to skip between sec­tions.

How To Budget For A Personal Website

Per­sonal web­sites aren’t built to make money, either online or offline. Traffic isn’t their pri­ority, and even if mon­etised with ads or affiliate income, that isn’t their key goal. They aren’t expected to pay for them­selves. They also often depend on “boot­strapping” — per­sonal funding from savings, friends and family.

So, per­sonal web­sites are a true cost, rather than an investment. As such, it makes sense to min­imise that cost.

Thank­fully, when traffic, profit and per­formance aren’t pri­or­ities, delays and mis­takes have little impact. So, DIY can be a rel­at­ively low-risk option for per­sonal web­sites.

Hosted plat­forms like WordPress.com can help you build an affordable per­sonal website. A little more tech­nical know­ledge will let you run the Word­Press software (or another user-friendly CMS) on your own hosting for more flex­ib­ility. Some great Word­Press resources exist to help you with that.

Why WordPress?

The Word­Press software cur­rently runs over 25% of web­sites, for good reason. It is very flexible, free, “open source” software, with many thou­sands of plugins and pre-designed themes available. Con­sid­ering that flex­ib­ility always creates com­plexity, it is also impress­ively user-friendly, if not to everyone’s taste.

 

Port­ab­ility is important, too. Whilst some hosted DIY website builders may seem simpler, many lock you in to using their ser­vices. That’s a problem when you reach the limits of their flex­ib­ility, or they change their service. With Word­Press (and other self-hosted CMS plat­forms), you can just move to a dif­ferent web host and keep using the same software.

DIY Websites Not An Option?

Word­Press may be great, but it isn’t perfect for every project. Whilst it sim­plifies a lot, there’s still a learning curve. Con­trary to Hol­lywood hype, tech­nology doesn’t make everything quick or simple. Exper­ience helps, but slowing down, per­severing and searching the web can achieve a lot. If you really aren’t com­fortable with tech or design though, your per­sonal website budget may need to stretch to pro­fes­sional help.

Getting Professional Web Help

Web designerIf you do need a pro­fes­sional web designer, get all your content and images together first — and be real­istic. Even a simple website can easily take over 30 hours of skilled work, often spread over a couple of weeks. You’re engaging an expert, not employing someone to just follow instruc­tions. It takes time to discuss your plans, and you’d be wise to heed their expert advice.

Freel­ancers are more cost-effective than employing someone for a short project, but not cheap. They have far more costs to cover than employees, so expect higher rates. Big agencies with stand­ardised, auto­mated pro­cesses can some­times speed things up and keep costs down, but will also limit your options.

Hope­fully those tips will help you to reduce the costs of your per­sonal site, or at least to set a real­istic website budget. So, what about a business site? Would the same advice still work? Well, no — not if you want it to succeed.

How To Budget For A Business Website

The moment you start hoping that your site will pay for itself, it stops being a cost and becomes an investment. That changes everything.

Unlike per­sonal sites, business web­sites need to perform as well as they can, on many fronts. They are mar­keting vehicles, com­peting for search pos­i­tioning, traffic and sales.

Search engines work hard to keep that com­pet­ition based on quality, rather than simple ad spend, because quality is what users want. However, high-quality mar­keting takes effort and expertise, both of which cost money.

Now, that doesn’t mean you will always have to out-spend your com­pet­ition. Still, it does mean that focusing on cutting costs can easily cripple your chances of success.

Why? Well, con­sider that “mar­keting vehicle” analogy for a moment.

Skilled salespeople and new cars aren’t cheap — but would you really send an intern out to see potential cus­tomers in an old banger to “save money”? Of course not — the lost sales would cost you more than the “savings” on those false eco­nomies. This “oppor­tunity cost” would out­weigh the fin­ancial one.

“If you think it’s expensive to hire a pro­fes­sional to do the job, wait until you hire an amateur.” — Red Adair

So, when profit depends on per­formance, it is wiser to invest more than you need to, rather than too little. Extra investment tends to increase rates of return. Under­in­vestment risks project failure, wasting the whole budget. This is some­times called the Common Law of Business Balance.

As the Huff­ington Post put it, “Sorry, But Saving Money Won’t Make You Rich”. It’s still a good idea for per­sonal sites, but fre­quently fatal for busi­nesses.

Setting A Business Website Budget

Business web­sites can either be seen as part of an overall mar­keting budget, or as stand-alone solu­tions for spe­cific problems. In truth, they are often a bit of both.

The Marketing Budget Approach

Because mar­keting is vital for any business, common guidelines exist for setting mar­keting budgets. The simplest suggest a base investment of 5% of annual turnover to maintain existing brand vis­ib­ility and sales levels, or 10% to drive growth. That said, firms in more com­pet­itive indus­tries may invest up to 20%, or even 50%, of their turnover on mar­keting.

So, how much should you invest in a website or digital mar­keting? That depends on how vital they are — but web­sites are key assets built to drive growth. So, website budgets of around 5% of pro­jected turnover are quite common, and busi­nesses that depend entirely on digital mar­keting may double that.

Sur­pris­ingly, many first-time business owners don’t set a turnover target, though. So, let’s use a very small business as an example.

Imagine a sole trader with an average profit margin of 25% and a simple goal of “making a living.” The UK Living Wage is cur­rently about £18k per year for a single person. That implies a minimal turnover target of £72k — just under the current UK VAT threshold. So, 5% of that will be around £3,600 — and £7,200 might be reas­onable if the business is entirely web-driven.

Now, you may think these figures are high, or low — that’s fine. They’re only common guidelines. Just remember that your com­pet­ition is likely to follow them, and that under­in­vestment increases risk.

Websites As Solutions

The other option is to list each of the key problems you want to solve and goals you want to achieve. Then work out the annual savings and profits you’d get by fixing each point. Add those up to get the annual value of addressing them.

This approach can be very sub­jective, so be careful. It is easy to overlook or under­es­timate the value of some factors and to over­es­timate others.

For instance, keeping a real office open for business 24/7/365 would need at least 5 staff. So, that would cost over £70k annually — but is every website really worth that? Probably not unless they make that much profit each year; some could be worth far more. Still, it’s worth noting that busi­nesses are often valued at several times their annual profit. If your website is your business, that can make it very valuable indeed.

Special Cases

Of course, there are excep­tions to any rule, so it’s worth noting a few situ­ations that can make setting a website budget a little more complex:

Bespoke Web Development

If you want to model an unusual business process online (e.g. to provide an unique service), you probably need bespoke web devel­opment. This type of coding isn’t web design, but software devel­opment. Whilst I’m both a web designer and a pro­grammer, these skills are so dif­ferent that very few people can do both. In fact, you may need a web developer, a web designer and a project manager to help them col­lab­orate.

Import­antly though, this level of web pro­gramming isn’t usually a mar­keting activity. The result is a key business asset that is more than a pro­mo­tional tool. As such, it shouldn’t be limited by mar­keting budgets.

The com­plex­ities of setting a budget for bespoke web devel­opment are beyond the scope of this article. Suffice to say though, that pro­gramming tends to be far more complex and time-con­suming than web design.

Non-Profits

If you run a charity or non-profit group, the benefits of pro­fes­sional web design and pro­motion may be sig­ni­ficant, but not fin­ancial. You may also have slightly unusual require­ments (e.g. a mem­bership or com­munity system), but perhaps no clear turnover target. How can you set a real­istic website budget in such cases?

Well, if you don’t expect the site to pay for itself, you’re in the same pos­ition as those setting up a per­sonal site for whom DIY isn’t an option. Except that in this case, cutting costs too much will ser­i­ously undermine your goals. So, it’s better to con­sider how much achieving those goals is worth, rather than how little you can invest in them.

Finally — Don’t Hide Your Website Budget

Once you have a website budget in mind, tell your web designer! I know some folks think they’ll get a better deal by being vague, but really — nothing could be further from the truth.

Think about it. You’re asking an expert to solve a problem for you, but expecting them to guess the most important detail. They may be able to think of several ways to solve that problem, but the cheapest options won’t do so well. On the other hand, they gen­erally want long rela­tion­ships with happy, suc­cessful cus­tomers. So, they’re keen to give you the best solution you can afford.

So, what does the expert do if folks won’t tell them their website budget? Usually one of two things, in fact:

  • Guess — and risk offering you a limited solution when you could actually afford a better one — or vice versa
  • Refuse the job, because it’s hard to provide expert solu­tions without all the facts.

However, if you do give your designer a budget up front, they’ll be able to dismiss any options that are too expensive straight away. Besides, you can’t get over­charged if you set the price you’re willing to pay — but remember, if you set it too low, you’ll only increase the risk to your own project.

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