Small businesses and startups often seek affordable websites — but what makes a website “affordable”? How do you set a website budget?
Why? Because whilst personal websites often cost money, successful business websites do not. In fact, contrary to the hype of DIY platforms and cut-price cowboys, a cheap business website can easily cost you more than a professional one.
How To Budget For A Personal Website
Personal websites aren’t built to make money. So 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, not an investment. As such, it makes sense to minimise that cost.
Still, when traffic, profit and performance aren’t priorities, delays and mistakes have little impact. So for personal websites, DIY can be a relatively low-risk option.
Hosted platforms like WordPress.com can help you build an affordable personal website. For more flexibility, a little technical knowledge can let you buy a domain and hosting to run the WordPress software on. Some great WordPress resources exist to help you with that.
Portability is important, too. Whilst other 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?
Still, even WordPress isn’t perfect for every project. Whilst it simplifies a lot, there’s still a learning curve, and it still takes time. So if you really aren’t comfortable with tech or design, your personal website budget may need to stretch to professional help.
Getting Professional Web Design 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 have costs to cover. So don’t expect employee rates. 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.
Why A Business Website Budget Is Different
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 are marketing vehicles, competing for search positioning, traffic and sales. So they need to prioritise performance, on several fronts. It’s not just about looking pretty — a pedal-powered Lamborghini won’t win the race.
Search engines try to promote quality, because that’s what users want. However, quality requires investment, effort and expertise.
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 just 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 underinvestment increases risk.
The Value Of Websites As Solutions
Another 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? Only if 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.
Now, if you’re a sole trader or other microbusiness owner thinking, “I can’t afford that!” — I understand. That’s where I started, and I’m here to help. Still, I see many making the same mistakes, so help starts with some home truths about budget web design:
- Budget web design isn’t simply cheap web design. “Cheap” cuts costs by cutting corners and compromising quality. Your website will be in a marketing race with almost 2 billion other websites So cost-effective beats cheap every time.
- Building a successful website involves far more than putting a few images and a splash of code online. Undervaluing that leads to underinvestment, which will underperform and increase the risk of failure. Most sites need ongoing support too, so don’t forget that cheap designers tend to disappear.
- You don’t have to decide what you want before talking to a professional. Ask us what you’ll need first. It may be very different – but if so, expect us to explain why.
…and some points about investing that are especially valid during a recession:
- Whilst it’s never wise to invest more than you can afford to lose, any “savings” you have are already losing value unless they earn interest at rates that at least match the rate of inflation. That’s a guaranteed loss. Investing those savings in your own business may not be safer, but a solid business plan should make money faster than inflation depreciates it. Those are the risks you have to balance.
- It’s not about what savings you can spare, but what your business plan suggests you could confidently invest. Ultimately, your business should pay for your website, not you. Confidence is critical, but won’t be real without a plan. So do your research and plan how to achieve a realistic turnover.
- Don’t forget that most business expenses are tax-deductible. So once your income reaches tax thresholds, investing a thousand pounds can reduce your year-end tax bill by a couple of hundred pounds or more. If you expect to exceed the VAT registration threshold, you may be able to claim even more back.
- If your business plan isn’t based on paying yourself at least Minimum Wage, it’ll cost you far more than the sums we’re talking about here. That money will have to come from somewhere – simply loving what you do won’t attract customers, or pay the bills. That’s why the successful firms are those that invest in marketing.
- Whilst more people struggle in a recession, there’s still plenty of money in the economy. It’s just that it’s unevenly distributed, and people will spend it more carefully on the things they prioritise. You’re competing with those other priorities as well as with other firms in your industry and service area. So make sure you’re targeting a market that can afford your products or services, and that your website copy highlights why doing so should be a priority for them.
- Recessions come and go (I’ve already weathered a couple). If your business plan is solid enough to outlast a short-term economic downturn, starting now should put you in an even stronger position when conditions improve.
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. That’s so different from web design that you may need a web developer, a web designer and a project manager to help them collaborate. Some of us can do it all, but most web designers aren’t programmers, and only do graphic design.
Importantly though, this level of web programming usually creates 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.
Charities And 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! You will not get a better deal by being vague or understating what you could invest in the right solution.
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 offer several solutions in different price ranges, and it’s in their interests to see you succeed. So, they’re keen to give you the best solution you can afford.
It’s okay to be unsure. We can discuss that — but we will need to know what price range you’re considering before we offer estimates. For instance, my affordable website packages cater to budgets under £2k. However, my professional web design and web development services offer more powerful, bespoke solutions at a far wider range of prices. There’s no point discussing the wrong set of options.
So, what do experts do if folks try to hide their website budget? Either:
- Guess — and risk offering you a solution in the wrong price range
- Refuse the job — because we can’t provide expert solutions to those who won’t trust us with the information we need
Setting a budget lets designers offer solutions that work within it. Still, remember that setting a website budget that’s lower than you could afford is only likely to reduce its performance, and the returns on your investment. After all, it’s better to get a 10x return on a four-figure investment than on a three-figure one.
(Originally published in September 2021, this post has been updated to reflect common concerns about investing during a recession, and increases in the Living Wage)