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How to Budget for a New Websiteby Kevin Lucca, Founder on Jul 27, 2016 / Perspective
Considering a website design and development project is an important investment for your business. The first thing to know from the start is that it’s an investment. Like with any investment, it’s important to do your research and develop goals to measure your success. Rushing the process and jumping in before you are ready is increasing the odds that the investment won’t pay off.
It’s vital to understand why a new or redesigned website is needed and what the website needs to do to produce revenue for your business. Part of that process of what it needs to do and the potential return on investment it can have, the budget for the project is a key factor. Overspending on a website based on it’s possible return can make it a poor investment. Likewise, underspending on a website with the wrong solutions can cheat your business out of potential revenue. The budget is a key factor in a website design project.
Why Do I Need a Budget for a New Website Project?
Before acting, consider the importance of setting a budget for a new website. Whenever you are in the market to make a large and important purchase, the one thing you may tend to know is your budget. Few of us have lives where price does not play a factor in these decisions. For example, when searching for a new car, you most likely have a working budget. From within that range, find the car that fits your wants and needs. This is also true for buying a home. First, you look at how much you can afford and then start searching for homes which meet all of your requirements that are within your budget.
The same thought process should be used when looking to redesign or build a new website for a business. You want to build a budget based on what a business can afford. As well as the value one can expect to gain from it.
So why do so many businesses go into a website project without a budget? There are a lot of reasons, but we most often see these two:
“I feel if I share my budget, they will spend up to that limit”
This is a natural concern and being cautious is not a bad thing but leaning too much on this thinking can again start the project out on the wrong path and lead to failure of return. To put it simply the budget determines the time and energy that can go into your webiste project. The more money you have, the more time and attention an agency can spend on your website. Less money, less time.
When you are building a budget, you are preparing to spend that amount based on the needs that have been determined by you or the company. Let’s start at the beginning…if you want to build a home, what is one of the first things a home builder will ask? What is your budget? A capable builder can do nearly anything a client needs or wants them to do. Yet, without a budget, it’s a waste of everyone’s time by designing a home that cannot be afforded or one that is below expectations.
Ask the Right Questions
Now, this is not to say that there aren’t companies out there that would take advantage of businesses. Companies that do the same amount of work no matter what your budget is. That is why it is important to first ask prospective agencies the right questions in order to cut out the ones that are not reputable companies.
For these reasons, it is important to go into a budget for a new website design project with the above thought processes.
Two key things to know:
- How much can your business afford to budget for the project
- What kind of return on investment (ROI) the business expects to have
The more valuable the website can be for the company, the more funds should be budgeted for the website to put in the proper amount of time and attention to gain that value. Complexity plays a key role as well. A single landing page can convert hundreds of thousands of dollars of revenue with the right digital marketing strategy behind it. A landing page will require a smaller budget than a 100 page website with inventory integration. That doesn’t mean the larger 100 page website isn’t worth a larger investment. It will likely have more purpose than purely revenue generation. It can solve business management needs, provide more customer self help tools etc. Understanding the needs and wants of your new website will drive up costs and determining how important those features and components are will also affect determining the budget and ROI.
Another factor is that there should be a connection between both the agency and the client. When an agency has a passion for what the client is doing – and truly cares – it has a much higher chance of success than a less motivated one. Such is true for a lot of things in life…passion is a tremendous motivator.
“I just don’t know what my budget should be.”
In this scenario, do not start the project and shopping agencies. It is important to review the company’s needs for the website and think about how valuable it can be. It is also important to consider which problems the website is supposed to solve and what goals it should achieve. A SWOT analysis can be helpful.
There are times that this is determined by an internal team. Other times, having a discovery session (an in-depth strategy meeting to discover and create best strategies to obtain desired goals) with an agency can be helpful in understanding the business’s needs and goals. With that, a strategy and budget for a new website can be created.
Many projects end up failing when the budget is set by competing agencies. It can sound like a good idea initially. The thinking is, you provide details of what the business needs, don’t share the budget, and send it out to a handful of agencies and let them all compete on price. Right away the discussion is based on price and agencies just putting another proposal together to try and win business. Two things usually happen:
1) You’ll have a handful of expensive options and one of those agencies will be really good and the others just charge high but can sell you anything in a conversation. The conversations typically aren’t deep enough and a discover session doesn’t happen so it’s very hard to differentiate.
2) On the low end of proposals, it can be alluring to look at the high and low price and start to erode on your goals and be attracted the price saving options. With those low bids, many agencies will bid low when a budget isn’t know and then they drive the price up through the project with upsells or a loose project scope and they will charge for out of scope at any opportunity. That’s the best case scenario. The worst case is that they provide a terrible experience, they can’t deliver on their promises and stick your business with a failed project that needs a new agency to fix it. Thus negating the low price that attracted you first.
Setting a budget and having a clear set of needs and goals will then allow you to engage with one or two agencies you really want to work with. Quality agencies will tell you if your budget is too low for what you need or that it’s too high and can scale the scope or ask for a budget increase. If it’s too high they will tell you or they will offer additional solutions that the extra money in your budget could be used for to drive you better results on your goals. This could be though additions to the website scope or through digital marketing solutions.
There is more to a website than creating a beautiful design. The website needs to have goals and a way to measure its effectiveness towards reaching those goals. This is to understand what success looks like. Otherwise, we end up with an expensive “unknown” that may or may not be bringing value to the company.
To understand the value that a custom designed website can bring, it is important to think about the objectives of the website:
- What type(s) of an audience(s) are you targeting?
- What content is your audience looking for?
- How should the website be organized to deliver your objectives?
- What are your functional requirements?
- What are your technical requirements?
- How should the website design look like?
- How will we measure success?
Remember, think of that home building and buying experience. The budget allocated is an investment in achieving your goals and gaining value. Give the process and project the respect, time and attention it deserves to be successful. By practicing these steps, your rewards will be an outcome that will undeniably benefit the company in the best way possible as it brings new customers to your business.
If you’re looking for an agency after you’ve decided on your budget, let’s chat.
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