Small businesses and startups often seek affordable websites — but what makes a website “affordable”? How do you set a website budget?
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…
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.
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
If 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.
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.
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.
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.