How Much Should We Pay For Our Website?

Websites are notoriously hard to budget for. Any organization redesigning their site will have myriad options around what to build (Flashy or functional? Full or minimalist?), how to build it (Squarespace? Static React site? Custom Laravel super app?), and with whom (Freelancer? Agency? Internal team?).

Sep 5, 2019
Ty Fujimura

Websites are notoriously hard to budget for. Any organization redesigning their site will have myriad options around what to build (Flashy or functional? Full or minimalist?), how to build it (Squarespace? Static React site? Custom Laravel superapp?), and with whom (Freelancer? Agency? Internal team?).

A normal organization can spend anywhere from hundreds of dollars to hundreds of thousands of dollars on its site. Later in this article, we will explore some typical website cost/benefit analyses for various kinds of businesses. But first… how do you decide what’s right for you?

The secret? Look at the website not as an expense, but an investment.

Your website should be making you money. At worst, it should make it easier for people to find you online and get in touch with you. At best, it should close sales and serve customers without you even knowing. If you don’t think your organization can make money by having a website, don’t bother having one.

Of course, many organizations don’t see revenue as their main goal online. They might be trying to raise awareness or inspire people to act. But all organizations need money to survive. By using their site to execute their mission, they will generate sponsorship or donors or volunteers. In short: they will make money.

To figure out how much you should pay, start by considering how much you can make.

Let’s say you invest $500 in having a freelancer on Fiver make your site. Compare the results with a world in which you didn’t have a site at all. It will be easier for you to attract and convert new leads. It will be simpler for people to get in touch with you. It will be easier for people to learn who you are. Because it’s so bad for business to go without a website, most organizations would make a healthy margin on a $500 project. But is that margin the best you can do?

Let’s say you invest $100,000 in having a top-notch digital agency like Cantilever create a custom-made website with all the bells and whistles (Our new sites start in the $25,000 range).

An effective, bespoke website will garner more traffic and convert more of those visitors into customers. It will supercharge your sales and hiring, and may even serve as an operational asset for internal teams.

What will you make in return? It depends on the growth you project as a result of doing the bespoke project versus the cheap one. If your organization makes $50,000 in revenue, even explosive growth wouldn’t justify the cost of the more expensive site. But if you make $1mm, or $10mm, modest growth could provide extreme return relative to the cheap website option.

If you put money into an effective website, you aren’t simply spending it. You are putting it to use in your business.

Keep in mind that investing too much of your capital in a non-saleable, depreciating asset like a website is usually not wise. Even if it projects out to be profitable, you will depress your cashflow and add uncertainty to your business in the short-term. It may make more sense to look for a middle-ground website option that provides less potential return, but also limits those risks.

Just like with any investment, you should shop around. Talk to different firms and get a sense of how you interact. Does it feel like they could represent your brand well? Do the sites they create engage you as a user? Sometimes you’ll have options that vary widely in price, but only narrowly in quality. What would the difference in quality mean for your revenue, long-term? A good studio can help you make an educated guess.

Ask each firm for rough pricing based on several possible project sizes. We use t-shirt sizes as a metaphor: Small, Medium, and Large.

Find the lowest-cost option available to you, and try to find the highest-return option, too. Figure out how you expect your business to change as a result of pursuing each option. Pepper in scenarios at various points along the investment/return curve, and you will be able to make a clear choice.

Finally, consider how you can best deploy your marketing budget between different efforts. It’s no use having a great site if nobody visits it. You should budget for marketing (on social media or Google, for example) to drive more visitors to the site. On the other hand, if you spend a ton on marketing, but your site doesn’t effectively turn those visitors into customers, you’re also wasting money.

There are as many styles of website as there are styles of business. Think about why you feel the need to have a site, or to replace an existing one. Determine how much return you expect to see on your investment, and choose the investment that most makes sense for your financial situation. Check out the appendix below for sample pricing across a range of industries and situations.

If you need help making a decision, we at Cantilever are happy to provide advice — with no obligation whatsoever.

Rear view of a piggy bank photographed by Fabian Blank
Modified Photo by Fabian Blank on Unsplash

Appendix: Case Studies

Let’s look at some typical examples of businesses, along with the common website investment options available for them. Cantilever prices quoted here are loose and subject to change. External prices are anecdotal and based on our collective decades of experience in the industry. Unavoidably these estimates make our offering look good. If we thought otherwise, we’d be in a different business!

Rebecca’s Avocado Pit

Rebecca’s is a new avocado-themed concept restaurant in hopping Sacramento, CA. It projects to do around $2mm in sales per year.

As you can see, a higher level of investment delivers more advanced features that may or may not provide substantial benefits for a new restaurant, depending on their brand and business plan.

Restaurants are also notoriously cash-constrained early on, and are at risk of failing before the benefits of a larger investment can actually occur. While investing in catering, online ordering, and events could be maximally profitable long term, it usually makes sense to focus on nailing the dining experience in the first few years. For this reason, we usually recommend that new restaurants look towards the lower end of the cost spectrum even if significant benefits exist at the higher end. A small Cantilever website can be a great fit for a quality- and brand-focused new restaurant — We did the original site for Marcus Samuellson’s Red Rooster Harlem, for instance — but it’s perfectly acceptable to scrimp on the website and go with something quick and workable like Squarespace.

The same paradigm applies to software as a service (SaaS) startups. Most single-founder startups just shouldn’t be spending big money on their site when they first go into business.

TF Corp SuperSucker Vacuums

TF Corp is a product design company in New York City with $10mm/year in sales. Their research & development department has invented a new vacuum that really, really sucks. They want to create a website to announce and sell the new product.

Because of their size and legal obligations, it is not conceivable for them to work with a freelancer, so they begin their search with agencies.

A well-capitalized product launch is a good candidate for a significant website investment. The website can be a major part of why the product succeeds or fails. It can act as an e-commerce hub that propels sales, allows users to pre-order, and more. It can integrate CRM software and ad tools to build leads organically and re-target them. A good site won’t make the product a hit, but a bad site could definitely sink it.

What makes sense? Much of it rests on the business plan and brand of the new product. Is it a luxury brand? Or targeted at the mid-market? Will it be sold on Amazon and in physical retail stores? What are sales projected to be in year one? A huge website investment can make sense for surefire hit products or those which need to grab market share right away. But a more cautious approach makes sense if the project is higher risk.

Munson Labs Intranet

Munson Labs is a multinational medical equipment company with 500 employees across five countries. They are looking to create a new corporate intranet that will serve as an internal social network for their team.

The intranet space is full of SaaS options ranging from minimal-cost DIY options like Basecamp to highly customized products that are modified by the vendor to suit the client. Those tend to be cheaper than custom intranets, but less flexible. They also carry heavy recurring costs that may increase.

Because off-the-shelf options are so plentiful, companies must be extremely sure that a customized intranet of any kind makes sense for them. They must be certain that stock options and functionality will not suffice, and that employees will be willing to invest in the platform. But if conditions are right, a custom intranet can be a powerful driver of growth. Once that criteria is met, it’s possible for even a humongous investment to make sense. It just depends on how much value it can drive for the business.

Putting it all together

There is one skill you must have if you are undertaking a website project for your business: Asking great questions. Don’t be afraid to sound uninformed — we all start out that way! Good vendors will happily answer your questions and will give you neutral advice.

If you do your research and think carefully about the effect that you expect your new site to have on your business, the right choice will be clear.

Sep 5, 2019
Ty Fujimura
Edited by
Rebecca Testrake

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