Website Budget

Website costs: How (and how much) to budget for your website

Anytime you contemplate the launch or redesign of a website, the question, “How much will this cost?” has no doubt crossed your mind. And we get it. Budgets exist for a reason and keeping costs in check is a big part of your ability to be successful. However, when it comes to websites, there seems to be a common misclassification: A website is often budgeted for as a temporary project when in reality it is an ongoing operational cost.

At first glance, some people may think of a website as a project with a defined beginning and end much like a display ad, brochure or commercial. With this approach, you only consider the costs to build the website and bring it to launch. However, in execution, it quickly becomes clear that a website is a special case. It is inseparable from the overall business and will continue to grow and evolve as long as you are IN business. Done right, your website is an integral part of your day to day operations.

Consider what a website should do for your business or organization. A well-maintained website can help you gain a competitive advantage in your industry while directly communicating with your customers or supporters. A short-list of benefits include:

  • Inform and educate your target audiences
  • Showcase your products, services or mission
  • Collect visitor data, generate leads for follow-up, and raise funds (for non-profits)
  • Directly sell your products or services to your customers (e-commerce)
  • Market your organization while helping potential customers find you
  • Provide legitimacy for your organization
  • Provide customer service
  • Act as a hub for all of your marketing efforts on and offline (print ads, commercials, billboards, social media, and search engines)

This list could go on. Likely, every element of your revenue stream is impacted by your website. And with that said and understood, you can see the importance of looking at your website as an operational cost, as opposed to a one-time investment. In all of our experiences, we have found that the more you are able to invest in your website up front, the larger your return will be and the more value your website will provide to your organization.

Where does my website budget go?

As you consider your website investment, it is important to understand how the budget is used. We like to split the budget into two camps:

  1. Pre-launch
  2. Post-launch

Pre-launch is the building stage. This is where all of the strategy, design, development, and software comes into play and construction of the site happens. We’ve worked on sites where pre-launch investments run between $5,000 and $30,000. But we’ve also done sites for over $100,000 and some under $1,000. As with most business investments, your website budget will depend on your situation, goals, and objectives.

Once you get through the pre-launch phase, the launch happens. This is your grand opening and it’s really where your website begins its life. Then comes the post-launch phase. Your post-launch budget covers all of the necessities to keep your site not only running but doing so in a way that makes it easy for your visitors to interact with you. How you budget after the launch is just as critical as the budget you set for building it in the first place. Post-launch budget considerations should include:

  • Hosting
  • Domain name registration
  • Software licensing
  • Support
  • Inquiry response
  • Order processing
  • Content updates
  • Design updates
  • Software updates
  • Security
  • Usability testing
  • Analytics
  • Reporting

How much should my post-launch budget be?

The post-launch budget can be further divided into the following:

  1. Maintenance
  2. Marketing

Maintenance budget:

In Jakob Nielsen’s article, “Top 10 Mistakes of Web Management,” he states, “As a rule of thumb, the annual maintenance budget for a website should be about the same as the initial cost of building the site, with 50% as an absolute minimum.” We agree with this budgeting strategy. Let’s break this thought down:

Let’s say you spend $5,000 on your website (pre-launch budget). You should expect to pay at least $200 to $400 per month to keep it doing what you originally set out to do, remain relevant, and avoid hiccups like linkrot. Sometimes with sites that have a $5,000 pre-launch budget or under, you can get your post-launch investment to under $200 per month. But these types of sites don’t typically do much for the business on a day to day basis. Additional investment examples using this principle:

  • If your pre-launch investment is $15,000 to build and launch the site, you should plan on $625 to $1,250 per month for your post-launch maintenance budget.
  • If your pre-launch investment is $100,000 to build and launch the site, you should plan on $4,000 to 8,000 per month for your post-launch maintenance budget.

Your post-launch investment ensures your website is continually improving and prevents it from falling into disrepair. Our article, “After the launch: A primer to successful website maintenance,” takes a much deeper dive into the importance of website maintenance and why your post-launch budget is so important.

Marketing budget:

In addition to the maintenance items listed above, your inbound marketing, SEO and ad spend (such as Google Adwords or Facebook ads) should also be considered as part of your post-launch budget. Because what good is a website if no-one ever finds or uses it? Budgeting for these marketing activities is based on ROI and is unique to each situation. A marketing budget under $1,500 per month is on the low end and online marketing budgets of $10,000+ per month are not uncommon. The wonderful thing about online marketing is you can track the effectiveness of every dollar spent and calculate the ROI.

Think of it this way: If you can figure out how to spend $1,500 and make $5,000 you’ll quickly want to spend that $5,000 to make $16,650, right? The trick is starting small and slowly ramping up once you find what works with your audience. A good agency will assist you in determining what makes the most sense for your business and goals. This Digital Marketing Prices article provides some additional context into this subject.

Where do I go from here?

Think about what you need your website to do for you. Jot all of those ideas down. This will be helpful as you begin working with a website developer so he or she can start to understand your goals and objectives.

And then remember, as you set out to build a new website, do not look at it as a one-time project. Treat your website as an ongoing, operational cost and you’ll be much better positioned for success. Budget for pre-launch, and also ongoing post-launch maintenance and strategy. When executed and budgeted correctly, a website should provide a positive return on investment over time. If it isn’t, it’s time to revise your strategy.

About the Author:

Dustin Czysz has been working with web technology since late 1997. A big-picture thinker, he has naturally gravitated towards UX design and strategy over the years but will never give up working with code. Dustin lives and works in his family studio in Wisconsin where he co-runs Klovera, a website management, and development agency. Find out more about Dustin on his website and follow him on Twitter.