What Should My Website Budget Be

How Much Does a Custom Website Cost?

By Wednesday February 25th, 2015

Custom website costs will vary based on your company size, extent of needs, features and functionality, and the quality and experience of your website design company. So how do you decide what company, budget and website solution is right for you?

If you’ve ever searched for a website design company, then you know this story…

Company A estimates $10,000 and a two month timeline, Company B estimates $25,000 and a four month timeline, and Company C estimates $70,000 with a six month timeline. What’s up with the disparity? Who do you trust… and what is so magical about Company C that they charge so much more?

Company A, B and C all have different processes, use different platforms and tools, provide different levels of guidance and support and produce a product of varying quality and performance.

How Much Does a Custom Website Cost

Look at it economically. Company A can’t possibly put the research, precision and care into a website that Company C can. For Company A to be successful, they require deal volume and their website design cost is lower. They need simple projects that move quickly, and this usually means a templated approach. It’s the only way they survive. Company A might also not be a company at all. This could be a freelancer who doesn’t need to price website projects higher to generate a reasonable income.

Company B will likely give more attention to detail and may employ some more seasoned designers and developers. Their prices are higher because they have a more developed process, are more hands on with their clients, are known for a sound product and are able to charge a higher rate than Company A. Company B likely uses a more custom website design approach than Company A.

Company C is more mature in terms of work quality and portfolio. You’ll probably get a dedicated team and a dedicated account and/or project manager. They survive on less projects, but each web project gets more attention and is of a higher value to them. Seeing their quality of work, and the fully custom design approach, their websites come with a higher price tag and higher expectations from clients.

So where do you fit on the scale of Company A, B and C? The website design company you choose will have a major impact on your website budget.

Before you decide on what website design company is right for you, let’s discuss your options and website budget.

Do you need a custom website or will a template solution fulfill your needs?

Let’s understand why someone would choose a template website over custom website design. It could be budget driven, the functionality could be straightforward, or maybe no advanced features or customization are needed.

If you are building a unique experience and want complete control and flexibility, you might want to consider a custom website.

Before you make a decision, check out this article about choosing a custom website design vs. template.

Now, let’s try to ballpark a custom website budget based on annual revenue.

Many experienced web design companies will charge anywhere from $30,000 to $150,000 for a small to medium sized custom website redesign, and I understand how daunting that is for a small business. While some small business owners understand the value of a website and the role it plays as a sales and marketing platform, this is still a lot of money.

Startup / Sole Proprietor – For a startup or sole proprietor with $300,000-$1M in revenue, a smart website budget (for a custom brand site redesign without advanced functionality or integrations) is 5% of a company’s yearly revenue, or $15,000-$50,000. This will get you to launch, but may not leave room for ongoing support.

Micro Business – Companies in the $1M to $3M annual revenue range may want to stray away from templates and go for a more custom website experience. These businesses should be looking in the 2-3% range for website budget.

Small Business – Companies in the $3M to $10M annual revenue range tend to require more in depth research, a more refined look and a more custom experience. A company of this size might want set a website budget of 1-2% of yearly revenue for a custom redesign.

Mid Cap Small Business – Companies in the $10M to $100M range should budget .5% to 1% of annual revenue for custom website design and web optimization services.

I’m leaving companies above $100M in annual revenue out of this discussion.

The larger the company and scope of a website build, the greater the need for ongoing customization, optimization and support for the product. It’s smart to take 10% of your company’s website redesign costs and budget for upgrades and support.

There are always exceptions, outliers and sometimes these ranges just simply won’t work. If your business is a pre-revenue startup, an ecommerce business, a web application or portal, an online product or software as a service, these numbers won’t make sense, and you may have difficulty putting a budget range on your project.

The numbers I’ve laid out are general ranges to help most business figure out a custom brand website budget, but looking at revenue alone is only part of the picture.

Assuming you’ve made the decision to invest in a custom website, let’s try to ballpark a budget based on the scope of the project.

At Brolik, we separate features and functionality into three tiers: basic, upgrade and advanced. We are able to come up with a rough estimate of any project within a few minutes by bucketing the features and functionality into these categories.

For example, certain pages are common on most brand-focused websites, like a home page, team page, clients, industries, contact, to name a few. For the most part, we bucket these into the “basic” features category and include them in our base pricing.

If a client needs live chat integration, a robust careers page, or full site copywriting, for example, we’d bucket these features in the “upgrade” category.

A custom ecommerce cart and checkout, a customer portal or a custom media gallery would all fall into “advanced” features.

When we’re coming up with website design pricing, we look at how many upgrade or advanced features are required and we estimate a range based on it. If you fall primarily into the “basic” category, we’d quote your website in the $25,000-$35,000 range. If you have three or more “upgrade” features, you’d probably fall into the $35,000-$50,000 range. If you have “advanced” feature requirements, we’d scope the website project out in more detail during the sales process, and our estimate could fall in the $50,000+ range.

Now let’s go back to your website budget based on your annual revenue. Let’s say you are a $5M a year company and you identified two upgrade features and one advanced integration in your build. $50,000-$70,000 could be a good range for a full website redesign, considering both your revenue and scope of the project.

Every web design company is different. Their rates vary and their product differs. This is the process we use to come up with a website budget for a potential client. I hope it helps when you are considering a custom website redesign.

If you’re in the process of looking at website design companies, check out this article: Finding A Website Design Company That Fits

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About the Author

Jason is co-founder and CEO of Brolik, a digital agency in Philadelphia. As an entrepreneur, Jason is passionate about helping other business owners navigate the complicated journey of owning a business and developing marketing strategies to grow their brand.
Follow @jaybrew on Twitter or connect with Jason on LinkedIn or Google+