How Much Should You Invest in a Website

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Ahhh… the magic question. The one question on the mind of every small business owner. What’s it going to cost or how much do I need to spend. And the usual response… it depends.

There are a number of factors that impact how much you should spend on your site. We’re going to consider those factors and hopefully I’ll be able change the way you think about your website as a cost to your business.

Your Website Is An Investment

Investments are all about ‘Return’. How much money will you earn from the money you spend. Your website is no different. How much will you get in new business from your marketing investment. The point is, it’s not about getting your money back but about getting more money back than you originally invested. Ideally in multiples of your original investment. That is an effective website.

Alright… It’s Time For Some Numbers. Lets start to understand what kind of a financial opportunity a website presents for your business.

First off we need to understand that our website is a Funnel. It is designed to capture people at the top and then through a range of marketing and qualification factors it then gives us our customer opportunities at the end of it. If we think about it in that sense, the important numbers we need to understand are:

  1. How many people can we get into our funnel (website),
  2. What is our enquiry rate through the funnel,
  3. What is our conversion rate for enquiries
  4. What is the average spend of a client
  5. What is the % gross profit of a sale

With these figures in mind we can quickly determine the dollar opportunity that your website provides for your business. This helps determine how much you should invest in your website. Just remember that a website is good for at least 2 years with a little bit of maintenance.

In the following example I’m going to share with you two principles, so make sure your paying attention. They’re both very important.

  1. I’m going to show you how we work out whether we will make any money from having a website
  2. You get what you pay for. I’ll show you how a more expensive website is actually cheaper.

Website Example

In this example we’ll examine the actual return on investment that a site can generate for a business. We’ll also look at an alternative scenario based on a business investing a bit more money upfront in their site. These figures are conceptual but they do well to show that the amount we invest in a website shouldn’t be based on cost, but on the return opportunity.

Its only after you compare the two scenarios that you realise what appears to be a small tweak in the numbers actually has an enormous impact to the bottom-line contribution of the website.

By going with a more expensive site, what are the improvements that you would want to see. Well you would want more visitors to your site. This should be possible as a better site has better content and should be better optimised for search engine rankings. You would also want to see more enquiries as your business looks more professional. You may also even see a better conversion rate on enquiries to clients because they are better informed and more confident in your service.

Doesn’t seem like much does it. How can a slight improvement in each of these metrics lead to such a substantial increase to your bottom line. Take a look at the table below. In scenario 3 we doubled the amount of money that was invested in the website and yet it returned over $20,000 in increased profits over 2 years.

Scenario 1Scenario 2Scenario 3
Visitors To Your Site (Mth)200500750
% Who Make Enquiries2%3%5%
Conversion To Client15%18%22%
Average Spend Of Client$400.00$400.00$400.00
% Gross Profit Of Sale50%50%50%
Total Monthly Profit$120$540.00$1,650.00
Total Profit Over 2Yrs$2,880.00$12,960.00$39,600.00
Investment in site$960.00$4,500.00$11,000.00
Marketing ROI200%188%260%
Profit From Website$1,920.00$8,460.00$28,600.00

By increasing the amount that we spend on our site we then have the opportunity to develop a better optimised site. This leads to an increase in traffic and an increase to the conversion rate. What does that mean, well in actual fact the second site is better value as it generates more profit and at higher ROI.

The moral of the story. Don’t be afraid to invest the right amount of money in your website. While it might seem like a lot, the results can be vastly different and the overall cost to your business is actually less than the cheaper version.

Cash Is King

Despite everything you’ve just read, at the end of the day we also need to factor in cashflow. As small business owners we know this all too well. While spending the right amount on your website constitutes a wise investment, if you haven’t got cash than there’s nothing you can do. Though there are options.

Save, Save, Save

If you can’t afford to invest the right amount in to your website right now than it can be a good strategy to wait a month or two until you can save up enough to invest in it properly.

Payment plans

This one can be pretty hard to come by. There aren’t many developers out there that are prepared to this. If you can manage it, it can be a great way to easy cashflow. Just remember a website takes weeks and even months to generate traffic. So don’t bank on your site to make enough business pay for it.

Buy a cheap site

This is the one option you don’t want. While you lose business without a website, you’ll lose even more business if your site doesn’t properly represent you. If cash is tight, create a ‘coming soon’ page that reflects your brand. At least people know that your site isn’t ready and to cut you some slack.

Stage your development

Normally more costly in the long run it is a great option for cashflow but ultimately creating a website that will deliver the best results for your business.


Think of your website as a marketing investment. Like any good investment you want to make sure you get a good return on your money. Quite often though you can get a better return if you invest more to do it right.

Of course as a small business owner you need to keep a close eye on your cashflow so it’s important that you consider your options for a new website. My general recommendation is not to go cheap but to stage your development if you have to. Just make sure your site matches the standards of your business and can deliver you the return on investment it should.

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