In today’s digital economy, e-commerce and internet traffic is the front line of new business opportunities. Most startups see substantial portions of their new revenue as either a direct or indirect result of website traffic. Having a functioning, interactive, and professional website is the first step for a successful small business.

This website framing is the key to today’s question: how much should you spend on a new website?

Simple! If the goal of a website is to make you more money, then you should spend proportionally.

There are no magic numbers and no specific quotes that any basic advice column can give you. Your IT and website spending needs should reflect what your business hopes to get out of your website. Consider the following factors that you should consider:

Why does my company need a new website?

If your company has no website, building from the ground up may be more expensive. If you are re-branding or trying to solve a sales slump resulting from a failed, existing website, your spending should be focused more on creative branding than technical.

What is the purpose of the website?

If the website is designed for advertising and window shopping, that will reflect different spending needs than if sales will be made directly from the website via online shopping.

Bells and Whistles

In the IT field, there is no debate that functional websites reign king in small business marketing. Nothing is a bigger turn-off to potential customers than a poor website design. Easy use, company blogs, mobile device accessibility, direct contact, and other quirks will all draw more business, but may be more costly.

Determining what your business needs its website to accomplish is therefore the most critical factor in determining your website spending needs. In an ideal world, your website budget should be as high as your business can afford while still making a profit. If a professional website draws business, it should pay for itself.

Finding that happy medium between spending and revenue is the tricky party of webpage spending. Many industry consultants recommend spending between 10-12% of gross revenue on marketing and advertising – this number should include your website costs.

As web designers, we obviously like to sell customers on extras, just as any business looks for an extra sale, but functionality does not come piecemeal. The question should not be: “How little can I get away with spending?” but rather: “What does my business need to grow and expand”?