Website budgets are obviously determined by a couple things like the amount of money you hope to generate from your website, the relative to the size of your company and your overall marketing strategy.  If you own a small company that’s in the middle of nowhere and has no reason to sell products online, then maybe you’re one of the few who may see very little need for a site.  On the other hand, you could be in the middle of nowhere and make a killing on the web.  It makes no difference where you’re located if you’re selling to a large market geographically.

Let’s say you own a flower shop in Manhattan.  You might just need a site to help find new customers and process orders in a 5-mile radius.  So how much would you want to budget for your site?  That’s a function of what you want the site to do and how much you hope to make with the site.  Sometimes people are able to invest a small amount in a site and turn around and make a fortune online but generally speaking, the quality of the site is directly proportional to the amount invested.  And the amount invested typically relates directly to the amount of revenue generated by the site.

Look at it this way, if you invest $1000 in the stock market, any rational person would know that they’d potentially make 7-10% in a good year.  Sure there are strategies that can yield a lot more, but historically, the best years produce around 7% return.  If you could get astronomical returns from websites, wouldn’t Wall Street pull out of the equities market and invest in website design?  So why would you expect to invest $1000 in a site and hope to generate hundreds of thousands of dollars.  Sorry to burst your bubble but it’s just not that simple.

It’s much more realistic to assume that web development isn’t just a one-time investment where you can forget about it and cash-in on the earnings years later. You have to maintain a site.   You have to continue to invest in it.  Websites that are forgotten about generally end up losing value as they fall in the search engine results.  With the exception of a few sites, most websites need to add new content, update, refresh, build new links, increase social media exposure etc.

So the question is how much is too much?  That’s simple, there isn’t an upper threshold.  The more you invest, the greater your return.  The less you invest, the less you reap.  If you plant a field with 3 seeds, don’t expect to harvest hundreds of bushels.

So is there an amount that’s too small?  Yes.  I see it all the time.  People come to me asking what we can do to fix their website that they got from some low-cost provider.  If all you want is a website, you can get one for $199.  But odds are, you’ll regret blowing the money.  It’s like buying a used car that’s really cheap but doesn’t actually run.  You might as well flush the money down the toilet.

There’s really no answer to how much a website costs.  That’s akin to asking how much it costs to build a house.  How large do you want it?  Will you have granite counters and marble floors?  Or will it just be a rustic cabin? Once we know more about your needs, then we can answer the question of what it costs to build a website.  If you already have a site that’s getting plenty of traffic, you may only need to budget a small amount to maintain your position.  More and more businesses are shifting their budgets from traditional marketing as they recognize the benefits of online marketing.  Most successful small to medium-sized businesses invest 8-12% of their annual revenue back into their marketing.  New start-ups obviously face more costs in the initial design and production so a number to shoot for as a start up would be in the neighborhood of 20% of your projected annual revenue.

You may want to divide that 20% up into print advertising, online advertising, website development etc. but increasing numbers of businesses are investing the majority of their marketing in the web.  To talk more about your marketing budget and about how Red Rocket can help you determine how to invest your dollars wisely, please give us a call at 970-674-0079.

Chadd Bryant

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