Importance of Budgeting for a new website & promotion

How to Budget, plan and estimate costs for a new web site.

Introduction:
Web Success must be based on budgeting which encourages careful planning of strategy and web site design.

Good budgeting has crucial impacts

Helps Enforce Strategy
Gives Constant Feedback on Accuracy of Plan
Helps Keep Plans Realistic

Web-Success articles, tips, guides, comparisons and rankings give most of the guidance to get started. This article focuses on budgeting and planning for new websites. See our related articles "Before you Begin" and "starting a new web business" and "new website checklist"

As we mention in another article, most business managers fail to properly research and plan either their web business or their web site. We find this especially true for new business website owners and those who never owned or ran a real business or managed a computer project. Web business involves both such difficult, risky aspects rolled into one.

A big factor in the budget will be the promotion strategy choice of paid versus organic marketing, as in How to choose Paid or Organic Promotion.

Understand that:

Going into real business on the web is NOT FREE nor easy;
Internet business is nothing like it was in 1999;
You MUST have not only time and knowledge, but also money to succeed;
Moreover, you MUST budget that money carefully to succeed.

(Even if you have lots of labor available, you still need a few thousand dollars when you include testing and some promotion).

You MUST budget for Testing and Promotion and at least one major revision:
Testing and promotion are elements absolutely essential to success.

A successful website is going to cost at least a few thousand dollars to setup, test, revise and promote (whether in money or time and effort), in addition to labor.

The cost of a website varies tremendously depending on several factors, from about $600 for the simplest slightly custom site, to over half a million dollars for a sophisticated site approaching one like Amazon or Ebay (theirs cost many millions). (More typically $2000 to $12,000). You must accurately analyze, estimate and judge the proper approach and cost of your website, its promotion and updates. If you are not sure, ask a lot of questions, get estimates and allow a safety margin of around 20%.

Most likely that initial setup cost will go up 50% to 100% when you must revise the site at least once, within about one year, after testing and refinements of strategy, image and appeals.

All Business authorities emphasize budgeting:
All major business and MBA books and top management consultants--- emphasize budgeting.

Here is why business authorities say budgeting is crucial:

Budgeting forces you to think through your strategy versus funding requirements, to be realistic, to match goals to funds, and to be scientific about it all.
A budget helps you adjust your goals and strategy to the resources available: It forces you to make important choices to balance funding of business functional elements while best matching your resources to your chosen niche.
Budgeting helps you select a business strategy that best fits the market environment.
Budgeting helps to analyze cash flow more realistically for each period.
Budgeting helps you identify and analyze the details, tasks and elements of your project.
Budgeting helps you decide how your time-labor versus money will be best allocated synergystically.

Importance of the Budget:
The budget is the single most important factor in success next to product demand, market research, study and knowledge of the field and business, and the strategies themselves.

First, a budget can enforce and keeps focus upon the all-important strategy. That is why it is so important.

Secondly, it keeps you from running out of resources at the crucial point.

Thirdly, it informs you of your “realism” and ability to realistically plan---It tells you whether you really know what you thought you were doing.

Fourthly it let's you examine and balance crucial "congruence" of the functional parts of your business to each other for best synergy.

By now, the words "crucial", "balance", "match", "analyze", "enforce","plan","goals" and "strategy" have come up often enough that you should see why budgeting really is crucial.

Budgeting, like the promotion and improvement campaigns we encourage, is done in phases.

How to Budget:
Budgeting, like your web marketing strategy---is best done in steps.

Budgeting and strategy development go hand-in-hand.
First set out the total existing available funds and labor times available.
Next, follow the process of business and web strategy creation-which begins with survey of the competition and strengths and weaknesses of your company and products.
Make an initial projection of funds and labor plus a conservative estimate of any cash income (gross profits) for one year is totaled, in light of the strategy and projections.
Business and marketing strategies are adjusted to a “best fit” of the market niche and total available funds, profits and labor available (including sweat equity partners or affiliate efforts/utilization). (There is time taken out from budgeting here to adjust the strategy slightly to the budget, and review the entire project).
ALL the sub-strategies (marketing, finance, production, quality, development, distribution) are here balanced to be "congruent" with each other, with resources and budget.
Major marketing promotion choices are made, for the internet, based in part on www.Web-Success.net suggestions. Organic, Paid, PPC, banner, Affiliate, hybrid).
The annual and then monthly budgets are finalized in light of the strategies, sales targets.
Create milestones and deadlines, in the form of a “Project Management Chart” or list.
Typically simple projects are planned and budgeted with a list or a spreadsheet like Excel, or some simplified project software similar to Lotus NOTES or even computerized sticky notes, backed up to documents.
This budget is marked with dates of target goals from the project management list--matched to monthly budget targets and likely expenditures.
Only when all this is done and estimates are all in and all elements are cross-checked and balanced and final monthly budget rebalanced should the project begin. (You might find Business Plan Software useful to aid this process - these usually include strategy refinement, cash flow projections, and budgeting).
When underway, actual expenditures are posted next to projected estimates, per task or element of the project, and period---as they progress.

For specific suggestions for budgeting the website and promotion, ask us for an outline of website budgeting.

Putting the Budget to Work to Enforce or change the Plans
High variance from budget should be cause for immediate attention, alarm and review so that the project does not “spin out of control”. Careful realistic budgeting is a most essential part of good planning and estimating that will make the difference in whether you have "Web Success"

Critical times to review the budget are at the 20% point and the 40% complete points; After that there is little chance to alter a bad plan.

High variance can mean that the plan needs to be altered, but that is a big decision which should be approached cautiously.

This is not "rocket science". It's WORK. The reason most people fail in business is they want quick and easy. They don't want to work, study, improve and take the necessary time and steps. It is following experts (of business books). There is nothing entirely new here, except basic business principles summarized and listed in relation to business on the internet. With your concscientous application of these principles, you may have a fighting chance for Web Success. You also need a little luck, so--- Good luck!