web design budget pt. 1

How to budget for your web design project Part.1

How much should you spend on a website? That’s the eternal question and I’m afraid it isn’t easy to answer. The truth is that there’s a few things that you need to understand about yourself and what you’re trying to achieve before you can really figure out how much to spend on a website…Luckily I’m gonna take you through all of those things and help you create a web design budget that’s right for you in three videos.

In this video I explain a few things that you need to be aware of when you’re making a budget, as these things can inadvertently influence your decisions and you run the risk of under-or-over investing.

1) Recognising that the first price you hear will be your ‘anchor’ and you’ll use this price as a point from which you base all other value judgements, regardless of what it is. This can limit your expectations and stop you from engaging in the right conversations you need to have.
2) You are naturally risk-averse and like the rest of us have a good deal of loss aversion. We’re hardwired to avoid loss and will want to spend as little as possible therefore you could be under investing in your website. Buy cheap buy twice!
3) Understand whether you’re coming from a pain or a gain perspective: do you want to gain something new from your website or use it to solve your existing problems. The amount you’re willing to spend will be determined by the perspective you are coming from.
4) Finally you need to fully understand your business’s objectives for the website and work out what it’s worth to you. This will result in you starting to create a realistic budget that will gets a return that’s inline with your expectations.

To find out more about the things to look out for when creating a budget, watch the video below.

Transcript

00:00
WEB DESIGN IS BROKEN …it’s just crumbled to sand in your hands and it’s just
00:10
disappointing. Today we are going to talk about budget that the big one: budget
00:17
budget BUDGET! It is such a huge topic but I’m finally gonna lay down the final
00:26
word on budget, specifically how much you should spend when you’re buying a
00:32
website. I’ve got the answer for you. You ready you ready for it?
00:38
500,000 pounds a week! There we go! Did it! (that was easy)
00:47
I’m out. See you later. (web design is fixed) No. If you do have five hundred
00:58
thousand a week to spend on a website you should get in touch with me. I think
01:03
we could work with that… Budget it’s such a huge topic no one’s really kind of
01:11
tackling the answers of a few there’s a few articles on the internet that are
01:16
like “well if you want this type of website you should spend around this
01:19
much and if you want that type of website you should spend around that”
01:22
Much it really comes down to a few factors namely your attitude towards
01:30
risk, whether you’re whether you’re coming from a gain or a pain perspective
01:36
and how much you actually stand to make out of it. What you’re really doing is
01:42
investing in a website: you’re looking for it to create a return you want it to
01:48
be putting money back into your pocket. If you don’t want it to do that then
01:54
it’s only gonna be acting detrimental, it’s only gonna be taking money or
02:00
reputation or whatever out of your pocket and you really need to rethink
02:04
the reasons why you’re doing this in the first place. Go back to one of my
02:10
previous videos where what where I ask you the question why
02:15
are you doing this in the first place. So the first thing that we’ve got to
02:19
understand when we’re asking the question how much does a website cost,
02:25
how much do I spend on a website, we’ve really got to appreciate that
02:29
all you’re doing is you’re trying to give yourself what they call
02:33
an ‘anchor’ This is literally just a psychological stake in the ground so
02:39
that your brain can go “okay well I’ve got a point to start from” It really
02:44
doesn’t matter what that number is but it becomes your anchor: the first price
02:50
you hear becomes your anchor and around that point you will base all value
02:54
judgements. So be careful when you’re asking this question because you might
03:00
end up with another massively overinflated number that completely puts
03:04
you off of even going down that route when actually you could have got
03:08
something that worked for you at a reasonable price, and if you get a number
03:12
that’s too low you’re gonna look around and think “hey
03:15
well this is all way too expensive” and not actually start engaging in the
03:19
conversations to help you understand the value that it could bring there is.
03:23
Another thing that you need to be really aware of when you’re trying to create a
03:28
budget for our website and that is that you like me like everyone else on the
03:34
planet we are naturally risk-averse: yeah we have
03:40
loss aversion. Most people agree with the statement that “it is better to not
03:45
lose five pounds than it is to find five pounds”
03:49
It’s the same five pounds! It’s weird we’re hardwired to avoid losses. We try
03:56
and keep what we have and therefore we’re less likely to risk that in search
04:02
of future gains so this means that you’re naturally going to be skeptical
04:09
about the gains that you can create with a website you’re naturally gonna want to
04:14
spend as little as possible and that means that you’re at a risk of
04:20
actually under investing when you’re buying a website
04:25
You risk of under-investing because you’re
04:28
averse to loss. I’m exactly the same: the amount of times that I’ve bought things
04:34
that I need on say Amazon and gone for the cheapest possible one because I
04:39
wasn’t entirely sure if, you know, if it would bring me the thing that I was
04:44
looking for – the reality is that I end up spending double because, you know, buy
04:50
cheap buy twice. But you can actually under invest and if you do especially in
04:56
something like a website it’s like under investing in in your team member:
05:00
if you if you hire a new salesman and you under invest in him well then he’s
05:05
not gonna do as good a job as he possibly could do if you’re picking
05:10
if you’re picking your team members based on the salary that they’re
05:14
willing to accept then you’re probably under investing and you’re not actually
05:19
realising that if you spend a little bit more you can get like disproportionately
05:24
larger returns. The third thing that you really need to be aware of but before
05:29
you start thinking about your budget is whether you’re coming from a pain
05:34
perspective or a gain perspective. Are you looking to this website to help you
05:40
reach new markets to help you, I don’t know, dominate the competition; to help
05:45
you boost sales/ Is it a gain thing? Are you launching a
05:49
new business a new product? Or are you looking at it from a pain perspective?
05:54
Are you looking at it and thinking well how can I use this website to help me
05:59
automate things, cut costs, reduce overhead – things like that. Maybe you’ve
06:05
got a whole bunch of bad reviews on your existing website and so you’re almost
06:10
being forced by your customers forced by your marketplace to up your game what
06:15
you’re really trying to do there is manage losses. You approach these … you can
06:19
buy the same thing in two different ways and your experience and therefore what
06:25
you’re willing to spend completely changes depending on whether you’re
06:29
coming from a pain or a gain perspective. The final line on it is using an analogy
06:37
that we use sometimes it’s based around cars
06:41
basically. Are you are you just trying to get to and from work or are you trying
06:46
to win Formula One the Formula One Grand Prix you need very different types of
06:52
cars to be able to do each of those things. There’s no point in buying a
06:56
Formula One car because when you pull up in the Sainsbury’s car park you’re gonna
07:00
have nowhere to put your shopping. Likewise there’s no point in buying a
07:04
Fiat Panda and taking it to the track. So the better you can understand what type
07:09
of race is that your business is trying to win, or what type of things your
07:14
business are trying to do with a website and what that’s worth to you is the
07:18
better you’re gonna be able to start creating a realistic budget and get a
07:24
return that’s more in line with your expectations.
07:28
My name is Aaron Taylor I’m helping you to make better decisions and have better
07:34
conversations when you’re buying a website.
07:37
till next time. [singing] I fixed web design, said I fixed web design…

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