Friday Next is no longer taking new clients or performing work for existing clients.

If you’re looking to have a website built for your business, you’re undoubtedly thinking about your budget; but is the budget you have planned in your head realistic for the website you want? This is a hotly-debated topic, but let’s see if we can make some sense out of it.

When thinking of a website in 2015, it’s important to think about how other types of businesses operate. Think about a grocery store, for example. Let’s say a potential grocery store owner is scouting out new build sites for the new grocery store on the block. She finds a great location, and the property owners inform her that the rent for this 10,000 square foot location will be $10/square foot = $100,000 per year, meaning $8,300/month.

Now to a non-business-owning individual, $8,300 per month might sound like an enormous amount of money; however, to a grocery store owner who anticipates weekly sales of $10 per square foot, that number doesn’t seem so high any more. That store owner expects to earn $100,000 per week, which is $400,000 per month, making the $8,300 rent look quite small.

It wouldn’t make sense for the store owner to look at the rent and say, “That’s ridiculously overpriced, and there’s no way I’ll pay more than $500 per month for this.”

It just wouldn’t make sense.

Translate That Pricing to Websites

All of those numbers can become confusing, so let’s take the overall objective and apply it to website pricing. Friday Next has worked very closely with e-commerce websites over the past three years. These are stores that earn between $20,000 and $50,000 per month in online sales. Without a functional, SEO-friendly, optimized website, these businesses would be making $0 per month in sales. With that said, it wouldn’t make sense for them to budget only $500 for a website.

Many people, however, only plan for an incredibly small website budget. I see it all the time: people wanting their online store set up for only $500. Someone will probably work for that cheap, but that $500 will end up being more headache in the end than simply paying a seasoned freelancer or agency to do the job right, at the right price.

Even an informational site for a local company is worth investing in. Anyone can throw together a WordPress site and put some content on each page, but only a WordPress developer or agency that knows the ins and outs of website development can put together a website that truly maximizes lead conversion potential.

Let’s Get Down to Details

So how much does a website cost, exactly? Unfortunately, there are no standards for website pricing the way there are for car repair or computer service, for example. Even so, we can still examine some averages in the industry and get a better idea of what a website should cost.

If you’ve found a good template on Theme Forest or Elegant Themes, and you want to get a great-looking website set up just like the demo for the theme you’ve picked out, it will require a couple things. An Involved WordPress setup at Friday Next costs $695, and that only covers the installation of WordPress and the Template – not any actual content setup.

For the actual setup of the website content, you’re best off relying on the skills of a developer who has been around the ‘web development block’ many times.  If you attempt to do it yourself, you will miss things, and you’ll likely make mistakes that you won’t be aware of until a web developer points them out to you.

So how much does that actual content setup cost?

Cost Based vs Value Based Pricing

On average, the cost of a basic website built by Friday Next is between $2,000 and $5,000 (with some much higher than $10,000). The factors that are used to determine these rates are highly variable, which is why it’s so hard to nail down exactly how much a website costs, but let’s start with my old rate card.

  • $100/hour – Custom Coding (PHP, HTML, CSS, JS)
  • $120/hour – Design (Pixelmator)
  • $90/hour – IT Support (Technical, Website, and Hosting Issues, SSL)
  • $100/hour – SEO Work
  • $130/hour – Admin

These rates are based on the hundreds of hours that I have spent researching, learning, and implementing these skills. It’s similar to how an auto mechanic charges $80-100/hour for their labor, because you get the luxury of not fixing your car yourself.  This is the way most agencies bill for their time – based on a rate card.  I previously used this model, but I don’t any longer.

You’ll notice that the Friday Next Services Page does not have hourly rates. Our services are determined by a model called Value Based Pricing. This means that the rates charged are equivalent to the monetary value they provide the customer. The only time we use cost-based pricing is for maintenance that doesn’t require the planning of a new project.

Is one of them better than the other? I prefer value-based pricing, because everything is agreed upon before the work starts. If I have to work more hours, you don’t have to pay anything extra; whereas, with cost-based pricing, every extra hour of my work is billed. That model is messy, and it doesn’t play nice with complex projects.

What’s the Value Delivered?

Let’s examine an example scenario where Friday Next puts together a website that includes an email marketing campaign, discounts for social sharing, integration with a shipping service like ShipStation. This project has effectively replaced a marketer, an e-mail campaign manager, and a warehouse shipment manager. Imagine how much those workers would be paid on a monthly or yearly basis.

If a marketer is paid $1,000 per month, and this marketing plan is good for at least one year, then the value of this marketing setup is at least $12,000. Of course, this might not encompass everything a marketer would do, so let’s round down to only 70% of that value – $7,200.

A warehouse manager might be paid $2,000/month. If a custom ShipStation integration saves at least 60% of the time that would have been spent managing orders and shipments, then let’s assign a value of only 50% of the warehouse manager’s salary to the annual value of this integration. That’s $12,000 in value.

The website also displays products for customers, without the store owner needing to run a brick and mortar establishment. That’s value saved on property rents as well as time saved – not needing to be present in the brick and mortar store. Assuming the store owner could find space for $500/month, we’ll assign only 60% of that yearly amount to the value of having an online store. That’s $3,600 in value.

The value of an e-commerce website for the above example would be $22,800.

Friday Next believes an e-commerce website should not take more than six months to pay for itself. Because the website provides $22,800 of value per year, that divides into $1,900 per month. For a six month payback, this website would cost $11,400.

*Note that this price does not include the added revenue from marketing efforts (or any revenue, for that matter), making it even more of a bargain.

Smaller Examples

Not everyone looking for a website has already amassed tens of thousands of dollars in monthly sales, so what about the local landscape company looking to get online? They need an informational website to display their services, and they want to be easily found, so this will also involve getting local Google, Bing, and Yahoo presences set up, possibly even including a few more like Yelp.

A website is a salesperson that is always working for you.  With multiple social presences, it’s even more salespeople.  This website will always be letting potential customers know about these specific landscaping services, and why they are better than the competitors. Optimizing the website for search (SEO) is also a must here, which will include regularly posted SEO content.

Friday Next worked with a local roofing agency who stated that after performing a site rebuild and local SEO optimization, they saw 30% increase in conversions. If our hypothetical landscaping company gets an average of 15 jobs per month, with an average bill of $300, their website construction and SEO work will bring an extra $1,350 of revenue each month. Friday Next believes that small, non e-commerce websites should not take more than three months to pay for themselves.

At that rate, this website would cost $4,050.

Cheaping Out on Website Budget

Friday Next has seen many prospective buyers back out of an estimate, looking for prices as low as 20% and lower than the quoted price. A couple of these clients have come back to Friday Next after going with the cheap providers and realizing how terrible the results are.

When it comes to website design and development, you almost always get what you pay for.

Look, there’s always the infinitesimal possibility that you will find the one web developer willing to charge less than $1,000 for your website, and it will work out great for you. However, this is almost always not the case. Your website is the face of your brand, and it’s important to spend quality time researching who you want to build your brand, and how much you believe your brand is worth.

Remember, it’s not completely up to a web development agency to determine the proper value of your website; it’s up to you to determine if the quoted price falls within the value you can assign to the website.

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