You might think creating a budget for your website should be primarily based on how much you think you can afford. However, this will be based on your perception of value. In other words, what you think your website will be worth as a finished product will always put a cap on how much you’re willing to spend. And, that’s even if you have infinite funds.

There’s much to be said about pricing for profit, where the price of goods or services influences the customer’s perception of value. The web development industry is no exception. There’s a reason that professional marketing agencies charge five figures for websites. The cost reflects the agency’s ability to create a revenue-generating machine that will quickly pay for itself.

Websites are undervalued today

Fifteen years ago, it wasn’t unusual to pay $10,000 for a basic custom website. The finished product took special skills to create. And, those skills were highly valued.

In the last ten years, the proliferation of cheap designers and DIY platforms have drastically changed perceptions about what to spend. Why pay for a website when you can build it yourself for free? They’re all made from templates, right?

The truth is when you hire an experienced, skilled developer (or team), you’re not paying them to simply plug content into a template. Tthey’re also intentionally setting up elements on the front and back end that are aligned with your goals.

Base the budget for your website on your needs 

If you want your website to succeed, don’t base your budget for your website on what you think you can afford, and then try to find a developer who will work within that budget. Instead, identify what you need with laser precision. From there, build the budget for your website around needs.

If you end up needing more money than you have available, don’t compromise. It’s not a dead end. Take your website needs as seriously as you would any other business necessity. Eventually, you’ll find a way to make it work. Your revenue depends on it. The following tips help you develop a budget for your website:

1. Prioritize website purpose

Before you can start gathering quotes from design agencies and freelancers, you need to know exactly what you want your website to accomplish.

For instance, if you run a restaurant, your priorities include making your menu available online, promoting specials, and making your contact information and hours of operation visible on every page.If you’re selling downloadable goods, your priorities will be developing persuasive landing pages, a strong lead capturing system, and a potential upsell process.

When you know your priorities, you can get more accurate quotes. It will take more resources for an agency to develop high-level landing pages than it will to simply make sure your contact information is visible on all pages.

2. Re-examine how you value your website

The budget for your website is determined by two fundamental factors. These are how you value the finished product and how you value what it took to create it.

How you perceive the value of your finished website matters

When you see your website as an interactive business card or place for people to look through your catalog, you won’t give it much of a budget. That’s fine if all you really need is a place for customers to contact you. A website created for this purpose isn’t much of an asset. Therefore, a small budget for your website is justified.

However, if you expect your site to generate leads, revenue, or conversions of any kind, a small budget won’t cut it. Start thinking of your website as an ROI generating asset. If your site generated $200,000 per year (and grew annually), would you be willing to invest $10,000 to build such an asset?

When you see your website as a long-term asset or investment for generating both revenue and leads, you’ll prioritize more budget for your website.

How you perceive the value of what it takes to create your site

When you hire a freelance designer to work with a template, they’re not doing anything you couldn’t do (technically). However, there is immense value in their familiarity with your chosen platform.

A designer using a business website builder will provide a faster turnaround time. However, that doesn’t decrease the value of their services. You’re paying for their expertise. Also, you’re gaining easy access to a host of features on the platform they use.

For instance, most of the builders mentioned on the page linked above provide SEO integration, security features, plugins, and site stats so you know how your website is doing. Knowing your site is professionally hosted should increase your perception of value even more. You could probably find a cheap hosting company, but it wouldn’t be as convenient or secure.

When you want more than convenience

When you see the value in having your website made from scratch, the budget for your website should reflect the value you see in the designer’s expertise.

Go Media, a design firm in the web business since the 1990s, explains why professionally designed websites were (and still are) expensive. Unlike a freelancer who works alone, they’ve got highly specialized teams in accounting, UX planning, Design, Development, and Deployment that play an important role in the development process. Some play roles behind the scenes.

According to Go Media, here’s what you’re really financing when you commission a custom website from a professional company: “Creative and Technical Knowledge workers command wages in the upper spectrum of income. You’re buying chunks of their expertise and that time is money. For example, a nice custom website with relatively common features, such as a CMS with custom component integration, takes between 150-300 hours from start to finish. This is real, nose-to-the-grindstone production time specifically applied to your project.”

From consultations and negotiations to implementing client objectives, it takes hundreds of man-hours to complete the design process.

There’s value in having a freelancer implement a template

Today, nobody will pay $10,000 for the kind of website they can create for free on a DIY platform like Wix, Weebly, or Sitebuilder. However, there’s value in paying an entry-level designer an average of $1,000 to build your website on one of these platforms. The value in this scenario is not skill, but time saved.

3. Start thinking of your website as an asset

What about the government spending $18 million on a website? Or corporations that pay millions of dollars to have their websites built by professional agencies? Those companies are willing to invest in the top developers because they know the value of building a website as an asset.

The good news is you don’t need to spend millions to create a website as an asset. You just have to start thinking of your website as an asset, and you’ll find ways and reasons to enlarge the budget for your website appropriately.

4. Know the value of what you’re getting

 Just because your website is built to your specifications doesn’t mean you’re getting an asset that will meet your ultimate goals. One of the most misunderstood aspects of website development is the role the client should play in designing it.

The difference between approaches

Many clients approach designers with ideas that look good but don’t support their website’s goals. A designer’s job is to design a site that will meet your marketing and revenue goals, and that often requires designing something that the client may not like at first.

Some designers will please their clients just to get the check. If you’re paying a designer to implement your ideas and you’re not open to any of theirs, you’re not going to receive much value. If you want the best design possible, allow your designer the freedom to implement ideas based on their expertise. They know things you may not.

Unless you’re a professional marketer, approach every designer as a partner rather than a contractor you’re hiring to fulfill your vision. Design aesthetics and programming features aside, there are two ways you can build a website. You can hire a designer to build you a website based on your own ideas, or you can hire a full development team from a marketing agency to build your website as a long-term asset.

There are pros and cons to both methods, but the latter option will produce superior results. Remember that the goal of your website is to get conversions, not just to look good. To get conversions, you need to reach your target market and speak directly into their listening.

You’re probably not your target market (even if you use your own products), so what appeals to you won’t necessarily appeal to your visitors. A professional marketing agency will know what your target market wants and how to give it to them. This will usually require an increase in budget for your website, so be open to this discussion.

Make the effort to obtain adequate funding for your website

It’s understandable if you really don’t have the capital to have your website developed by a professional marketing agency. However, if there’s a possibility of obtaining more funding with a little more effort, it’s worth it. The budget for your website will ultimately determine your ROI. That’s because you really do get what you pay for.