How much does a website cost?

How much does a website cost? It’s a question we get asked all the time and one which we explore in this video. We talk about getting you to think beyond just the basic cost of a website, and thinking about what your website’s goals are, building a site to meet those goals, and breaking down all components needed for your website to help you see if you are really investing enough, or if you are spending too much.


How much should you be spending on your website? How much does a website cost? Great questions. They’re questions that we all want to know the answers to. Lots of people want to know the answers. Being in an agency, it’s one of the first questions we get asked, “How much does a website cost? How much will my website cost?”

And without going into scoping, and functional requirements and all those things, today’s topic is going to talk about, what should a website cost? What should you be spending on a website? And how will you know if you’re spending too much? And equally, how will you know if you’re not spending enough to get the results you want?

So thinking about the costs, and what these costs are, it’s really important to understand the goals of a website. And your website must have a goal. You must know exactly what you want it to achieve. Do you want to sell more of certain products or all of your products? Do you want to sell a certain number? Do you want to get a certain number of qualified leads per month? Do you just want some subscriptions? Are you offering a newsletter or an online course or seminar series? Are you pre-selling something? Are you trying to garner interest in something? Are you doing market research or something else, a support mechanism? There’s a lot of things that your website could do. And only you can answer that. But it’s a really, really important question.

Your approach is going to be different to mine, and someone else’s, in how we allocate costs, and what budget we have. But all of it needs to be based around this goal, so we can see if we’re spending wisely, and not blindly. So what is the goal for your website?

You probably think your website is part of your marketing, and it is. But rather than just being part of your communication strategy, part of your marketing strategy, where people can look at it, let’s think about it differently. Because what we’re here to do is to find a great way to cost out our websites, and how we’re spending money on them.

So we think about our website as a really key operational part of our business. Let’s think of it in retail terms. I’m a shop. I already have a shop, I have an inventory, and I sell. And I want a new location. So I go out, and I find a new location and I rent that shop. At that point, it’s an empty shell. It’s a set size. I then fit it out. So I paint it, furniture, everything, signage, the whole lot. I hook up utilities, power, water. I get those all connected. Security set up, alarms, safe, if I need it. Equipment that I might need, like, point-of-sale systems. I then stock the shelves with inventory, which is a critical part, because that’s what we’re selling. Staff, got to hire some staff. Train them up. Share staff between my stores, if it’s local or otherwise new staff.

All of this is really, really necessary. And then I’ve got to get people in there. So the next part of it is I’ve got to promote it, advertise it, and run campaigns, to get people in the store. They come in, they buy. We recycle the inventory, get new stuff through. We change it up. We modify it based on the demographics, and people coming through the store. So that, we really understand, and that’s fine.

The website though, for the retail store is no different. The rent for our website is our hosting, and our content management tools, and things we’ll end up using, so any software or things that we require. And if they’re open-source, we’ve still got to upgrade them, this costs. Make sure they’re up to date, and plug-ins are updated. And even though they might be a lot smaller, the costs are there.

And if you’re using proprietary systems, you might be using tracking software, and stuff like that on your website, those things have license fees, and rentals. And so they’re a part of your store’s rentals. Your fit out costs correlate directly to the build and construct phase. So the build and construct phase is building the website, designing, getting that all done.

Inventory: massive part of your online store. And it’s not actually just the product. To me, your content on your website is your inventory. And even more so, if you’re a services business, where you don’t actually have a widget per se to sell. Your story comes from your content. So your text, your images, your video, your audio, that is your inventory of your website online. Think about that for a moment, how much attention do you give your online inventory versus your offline inventory?

Utilities, you’ve got to have utilities. You’ve got to have security. And then we’ve got all these things online. Then we’ve got to run these promotional campaigns. We’ve got to do advertising, to bring people through our online store. And then we cycle it through. We change the inventory. We add new stuff, we remove stuff. We do specials. We do all these things.

So those things correlate really, really closely together. So if we think about it that way, rather than just this marketing piece, over here, that we may or may not focus on, suddenly, this is a really, really critical part of our business. And we can segment it out into little bits and pieces, to say, “How do we cost out these elements, and how do we relate them?” And more importantly, we have baseline costs that we can use, from our existing business.

Now that we know the fit out cost is very similar to the build and construct cost of our retail shop or office, we can base on those costs. So a 70 square metre shop in Sydney, $1700 per square metre, is $120,000. An office for 20 people, 250 square metres at $1000 per square metre is $250,000. So here’s a couple of figures that relate to certain size businesses.

So if you have a smaller shop or a bigger shop; if you have a much smaller office or a huge office; if you have a market store, each of those have costs that you can baseline against. And they should match your needs, and the goals that we talked about earlier on, which is, what are you trying to achieve? So if you have a retail shop of 70 square metres, that you spend $100-150,000 outfitting originally and you now want a second shop, why not spend the same money getting a great experience online?

The reality is, you probably don’t have to spend that much. But you go with a really clear idea of what you’re expecting to get. You’ll define that really well to the people who are going to do the work for you. Now, you can get a freelancer, you can go to an agency. You can employ someone in-house to do it. But in each of those instances, you’re going to be paying the equivalent rates, at the time, for the length of time you need someone to build it.

So a full-timer that’s highly experienced, is going to cost you that sort of money, that’s a given. Agencies and freelancers, their rates will vary, and their overall cost will vary. But they’ll only vary in an hourly rate. What you need out of it, won’t vary or shouldn’t vary. And at the end of the day, if you can’t afford what you think you need, then you’ll have to adjust your expectations. But you should be able to baseline against that.

And equally when you’re looking at content for that site, if you separate those costs, you now have a way to think about, “What am I prepared to spend for inventory? What am I going to go and spend for my content? What am I going to spend on maintenance? What are my advertising and marketing costs going to be? What do I need to do to get people to this site?”

There’s some ways to think about it. It’s not an exact cost, because I didn’t promise that. But what I did say, was I want to give you a way of thinking, and a way to think about what you should be spending, and a great way to know whether you’re spending enough or not spending enough. So hopefully you got a lot out of that. Hopefully you’ve got some ideas now, particularly useful if you go sell it up through senior management, about what you’re putting into the budget, what you think you’re going to spend.

If you really like what I had to say, please subscribe to the channel, down there. You can share this on social, I would love that. And I hope to see you next time, on the next video.

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