How Much is a Site Worth?

Every web designer that I know (and I know quite a few) is frequently asked “how much does a website cost?” The question is a complicated one since it depends on many factors. I like the analogous question: “how much does a car cost?” The answer depends on whether the vehicle you want is a brand-new Ferrari or a 1972 Robin Reliant. Website costs vary just as much. Some people will build you a website for £400 and others will charge you hundreds of thousands, if not millions of pounds depending on who you hire and the specifications of the brief.

When I first started working as a freelance web designer, about 10 years ago, I was extremely naive. It was only several years later that I realised just how much I had undervalued my own position as a web professional. I was building websites for just £500 each and earning less than the minimum wage. To be fair, I wasn’t very good initially – and contrary to popular opinion, it takes a long time to become a professional web designer. Regardless, it didn’t seem right that after spending over 6 years in further and higher education I should be earning less than a bin man. (No disrespect to the bin men – they are the smart ones, for they didn’t spend a decade training how to do their jobs before receiving their first pay cheque.)

What was the point of all of that work, and even worse, the tens of thousands of pounds of debt I had acquired paying for this very expensive education? Even as a lone freelancer and with my then minimal overheads, my earnings did not cover my bills and I supplemented my income with a (better paying) part-time job. It didn’t occur to me that I was actually worth more than £5 per hour, after all, I loved building websites. In time, as I became more experienced in the art of running a business, I gradually put my prices up to cover my expenses and make a marginal profit in line with the local competition. I was eventually able to rent an office and take on staff while continuing to offer a constantly improving service at a reasonable price.

Those early learning years are long gone, but just recently, painful old memories resurfaced. A couple of months back, I was rather surprised by what a potential client said to my partner in a meeting. She was told that the client wanted a 5–10 page website and a logo designed — all within a set budget of £300. When asked where he had got that figure from, he stated that it just “seemed about right.” Essentially, that was what a website was worth to him — its intrinsic value. Regrettably, we had to turn the client down, explaining that although we do work on smaller sites sometimes, the logo design alone would cost more than his entire budget. Incidentally, a logo is more than just a graphic — it is the basis for a whole company’s corporate image. It should have some innate value placed upon it. Regardless, we are able to offer quality logo design at a very competitive price, which is slightly more than our would-be client considered the value of a website.

What do people other people think?

This got me thinking. What value do people that do not understand the process of web design place on a website? To find out, I posted this question as a poll on my Facebook page and asked everyone I knew that did not work in the web design industry. The results were fascinating, if not a little alarming.

I asked the following question:

“How much does it cost to build an updateable (text and images) 10-page website with logo? I would appreciate it if you could list how long it would take to build as well.”

The question is purposefully vague (and besides, Facebook doesn’t allow you to use more than a couple of sentences!) because I was hoping to measure people’s overall perception of value, rather than get bogged down with technicalities. To a web designer, the question is also rather open to interpretation — I did not state whether the content would be updated via a custom-built content management system or by using cheaper third-party components. I don’t claim this poll is particularly scientific, however it does shed some insight into how my friends at least value websites.

The answers ranged from just £8 to £4000, with a mean average of £737.

Over half of the people who answered valued the cost of such a website under £500. Furthermore, 85% estimated below what we would charge for such a website. Even more interesting than the actual results were people’s comments. Here are some that nicely demonstrate how people value a website:

“I think £100–£200, and if I had Dreamweaver I’d knock up the basic design in a day or so and take perhaps a week or two to refine the look with images, text and sounds.”

“I chose £200–£500 assuming I’m allowed to use ready-made scripts to do the updatable part rather than writing the code from hand. Also, it can be done cheaper, just depends how much you want to be paid. If I was down on my luck I’d do it for £50.”

“I’m really not sure what would be involved Harry, but for something simple I would have thought about 8–16 hours work? £200–£500 in total and around £100 for the logo. This is purely a guess though.”

“I have literally no idea how long it would take. I imagine it would involve an incredible amount of work so I am guessing £1500–£2500 based on the fact your website wouldn’t be the only one the designer was working on — it would be a while.”

This last one is actually the most accurate, and if we were to quote on such a project, we would probably quote around the £2000–£2500 mark. Reassuringly, this person seems to understand that there is a lot of work involved. In terms of our pricing, we are about average in the city we’re based in — some people are slightly cheaper, and some are more expensive. I think we’re also about average for a medium-sized web company based in a large town or small city.

In our city, I know of one company that would charge £250 for hosting, £50 for the domain name, and £75 for the initial consultation — already maxing out the budget of the client we had to turn down, before any actual web development work had even begun. A larger company in a bigger city such as Birmingham or London would charge two or three times more. In contrast, you could probably get a freelancer at the start of their career to develop such a site for around half of our rate, since they would have fewer overheads and a strong interest in building up their portfolio. A student would cost even less.

You get what you pay for at the end of the day.

About our costing

It is very interesting to note that every one of my friends who gave an explanation with their vote calculated the price purely in terms of work per hour. No one placed any value on the website itself or considered overheads such as staffing and software licensing. I certainly didn’t see anyone factoring in decades of training into the equation. It seems the main prerequisite is simply owning a copy of Dreamweaver (which, incidentally, costs hundreds of pounds).

To give you a real idea of how we arrive at the figure mentioned above, the following factors must be considered — as they are performed by all reputable web design companies. (Of course, actual prices will vary from company to company — I’ve just used averages here.)

• Initial phone consultation
• 1-2 hours research and planning
• Initial face to face consultation
• 2-3 hours further research and planning in preparation to the brief/proposal
• Brief/proposal to be written up and posted with contract
• Hosting, domain name and email set up at around a cost of £100-200
• Content provision/sourcing
• Possible hire of photographer at £350-500 per day
• Initial designs on logo and website
• 2-4 rounds of revisions for logo and web design
  (2-3 weeks hire of web and logo designers at around £20-75 per hour each)
• Development of Content Management System
  (1-2 weeks hire of web developer (programmer) £20-75 per hour)
• 2-3 days testing
• Launch

Additionally, every company has to pay for offices, accountancy fees, broadband, computers, software, heating, staff wages, phone costs, call minding services, transport etc. Looking at the above list it amazes me that people generally value a website considerably lower than it\’s raw costs, not even counting any intrinsic value. Maybe this is because websites are not tangible things and they are not widely understood, however since everyone uses the internet daily, everybody feels they should know the value. It is certainly interesting to note than many people don\’t blink at a plumber charging £300 to fix a broken pipe, whereas they may expect a whole team of trained web designers to work for over a month for less than £500 (admittedly, this is normally, but not always on more than one project at a time).

Is this a little unfair?

Perhaps it is a bit much to expect people that have never worked in this industry to understand the costs involved in creating a website. Indeed, most of the work done is never even seen by the client or end user – the vast majority of the work done any any website was done in the proceeding years while the designer trained and practised his or her craft! Perhaps also it takes years of working in the business to realise that there is a lot more to a website than merely “design and build”. I wonder how accurate I would be estimating the costs involved in something I have never worked on before. I doubt very much that I would expect an experienced architect to design me a house for £200, and part of me wonders would my Facebook friends give this job more value than a website because a house is tangible.

Conclusion

To be honest, it doesn\’t really matter what the average person in the street or on Facebook thinks about the value of a website as far as our business is concerned. However, I am concerned that there is a wider problem here. We are all so reliant on technology such as the internet, yet only a very few people (once called geeks) seem to understand this technologies\’ worth. They have this understanding because they are part of the technology drive, a demand ultimately caused by the average guy in the street who does not understand it fully.

As I say, this does not really affect us significantly though – it merely interests me. Typically potential clients that have found us already know the approximate cost of a website. We tend to work with already established owners of businesses, most of whom have already hired web designers in the past. As a provider of a bespoke services, we are lucky in the fact that we can choose the clients we work with, and we like to think that most of them value us as much as we do them.

I would love to hear your comments on this matter.