Planning a budget for the website
Note: Below is a translation of the article “Setting a Web Design Budget,” devoted to the creation of websites from a financial point of view.
If you regard the creation of a website only as a waste of money that you need to make, you most likely will not return the money spent, if you return anything at all. In this case, you should refuse to create it at all.
However, if the website is an opportunity to invest in an existing business, it is likely that your investment will bring tangible benefits.
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Sometimes a small change in perspective on a problem can significantly affect the outcome.
Web design and web development is a rather uncontrolled area of activity. There are no major trade associations, (generally recognized) certification centers or skill levels. Anyone can be called a “web designer”, a “search engine optimizer” ( SEO ), or an “online marketing expert”.
As a result, pricing for online marketing services is highly variable. You can see amounts in both $ 20,000 and $ 200 for the same project.
The reason for this is not so much the greater price elasticity, as the huge differences between the performance of the same job by different freelancers or companies.
Unfortunately, in each such case it is necessary to compare apples with oranges!
One of the best ways to calculate an online marketing budget would be to allocate a certain percentage of the total marketing budget, based on the importance of the website itself throughout the campaign. For example, if you believe that the site will play a leading role in creating custom orders ( leads ) for your business, then you can safely allocate 75% of the total budget for its creation. (But this money should, in the end, go not only to the website itself, but also to its optimization in search engines, online advertising, e-mail campaigns, etc.)
Remember that the high costs of marketing when organizing a new business, a new website, a new product line may exceed the funds for maintaining the created 5-10 times.
Consider a sample scenario: SBLB Enterprises, Inc. net sales. make up $ 2 million. The marketing budget is usually 5% of net sales or $ 100 thousand. SBLB uses the website as the main means to communicate with customers, so they allocate 25% of the total budget (or $ 25 thousand) for the entire online marketing. At the same time, half ($ 12,500) goes to the website itself, and the remaining funds to other methods of promotion in the network (mainly search engine optimization and advertising). They decided that it was time to change the design of the entire website, so they allocate 5 times more money for the usual maintenance of the site (only $ 62500) for the redesign and launch of the new site.
Another way to plan your budget is to determine the profit that a website should bring to you, and calculating, based on this data, how much you are willing to invest in the creation of a website in order to get this profit (and also taking into account all possible risks, time money back, available funds, etc.).
For example: John has a local maid service; a regular cleaning fee is $ 75. Most users prefer to be cleaned after a week, so, on average, each user brings $ 1950 per year. If an effective website brings in an additional 5 orders ( leads ) per month (or 60 per year), this will increase John’s profit per year by $ 117,000. After all the calculations, he may decide that he is ready to invest 15% of this amount (or $ 17,550) in creating a new website and conducting an online marketing campaign to attract new users.
All the above considerations are of little use for small companies, for their budgets are very rarely really planned. Often, the “budget for online marketing” is all that remains after all costs and taxes! In this case, you can offer a few general tips that may help them decide on the cost of the site:
When planning your budget, do not forget to take into account your own time, which you spend on creating a website. Web design and development are those processes that require the participation of all involved persons. You will have to attend meetings, negotiate with designers, answer all possible questions, participate in telephone conversations, write texts for a website, edit materials, etc.
Even after the website is up and running, you have to spend a couple of hours a week to make sure that everything is fine. And there is always something to upgrade or improve!
Thanks to everyone who paid attention to the article. I would welcome any comments, including the current price ranges for Runet: Moscow and the regions.
If you regard the creation of a website only as a waste of money that you need to make, you most likely will not return the money spent, if you return anything at all. In this case, you should refuse to create it at all.
However, if the website is an opportunity to invest in an existing business, it is likely that your investment will bring tangible benefits.
')
Sometimes a small change in perspective on a problem can significantly affect the outcome.
How much to spend?
Web design and web development is a rather uncontrolled area of activity. There are no major trade associations, (generally recognized) certification centers or skill levels. Anyone can be called a “web designer”, a “search engine optimizer” ( SEO ), or an “online marketing expert”.
As a result, pricing for online marketing services is highly variable. You can see amounts in both $ 20,000 and $ 200 for the same project.
The reason for this is not so much the greater price elasticity, as the huge differences between the performance of the same job by different freelancers or companies.
Unfortunately, in each such case it is necessary to compare apples with oranges!
Costs as part of a total marketing budget
One of the best ways to calculate an online marketing budget would be to allocate a certain percentage of the total marketing budget, based on the importance of the website itself throughout the campaign. For example, if you believe that the site will play a leading role in creating custom orders ( leads ) for your business, then you can safely allocate 75% of the total budget for its creation. (But this money should, in the end, go not only to the website itself, but also to its optimization in search engines, online advertising, e-mail campaigns, etc.)
Remember that the high costs of marketing when organizing a new business, a new website, a new product line may exceed the funds for maintaining the created 5-10 times.
Consider a sample scenario: SBLB Enterprises, Inc. net sales. make up $ 2 million. The marketing budget is usually 5% of net sales or $ 100 thousand. SBLB uses the website as the main means to communicate with customers, so they allocate 25% of the total budget (or $ 25 thousand) for the entire online marketing. At the same time, half ($ 12,500) goes to the website itself, and the remaining funds to other methods of promotion in the network (mainly search engine optimization and advertising). They decided that it was time to change the design of the entire website, so they allocate 5 times more money for the usual maintenance of the site (only $ 62500) for the redesign and launch of the new site.
Planning a return on investment
Another way to plan your budget is to determine the profit that a website should bring to you, and calculating, based on this data, how much you are willing to invest in the creation of a website in order to get this profit (and also taking into account all possible risks, time money back, available funds, etc.).
For example: John has a local maid service; a regular cleaning fee is $ 75. Most users prefer to be cleaned after a week, so, on average, each user brings $ 1950 per year. If an effective website brings in an additional 5 orders ( leads ) per month (or 60 per year), this will increase John’s profit per year by $ 117,000. After all the calculations, he may decide that he is ready to invest 15% of this amount (or $ 17,550) in creating a new website and conducting an online marketing campaign to attract new users.
All the above considerations are of little use for small companies, for their budgets are very rarely really planned. Often, the “budget for online marketing” is all that remains after all costs and taxes! In this case, you can offer a few general tips that may help them decide on the cost of the site:
- For a particular market segment, $ 5–10 thousand will be a good price range for a simple website with a unique design. If you need additional functionality or you need to fulfill some specific requirements, the price may increase to $ 10-15 thousand. (If your budget is completely limited, you can try to contact a freelance professional who will make it all a bit cheaper, but in that case you just change the money invested for additional risk.)
- If you need to create a full-fledged web application, the prices will be within tens of thousands of dollars. The exact price will depend on the size and functionality of the project itself.
- Logo design and website design are two completely different things. If you do not have a corporate logo, plan to create it before launching the project on the website.
- Remember that you get what you pay for. Decide on a budget, and only then choose the best offer from companies that can do the work for this amount of money. The more your investments will be, the better (theoretically, of course) the result will be.
Time is money
When planning your budget, do not forget to take into account your own time, which you spend on creating a website. Web design and development are those processes that require the participation of all involved persons. You will have to attend meetings, negotiate with designers, answer all possible questions, participate in telephone conversations, write texts for a website, edit materials, etc.
Even after the website is up and running, you have to spend a couple of hours a week to make sure that everything is fine. And there is always something to upgrade or improve!
Thanks to everyone who paid attention to the article. I would welcome any comments, including the current price ranges for Runet: Moscow and the regions.
Source: https://habr.com/ru/post/31241/
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