No-one ever wants to talk about money do they? But in these cash-constrained times it’s a subject close to everyone’s heart. So let’s not beat about the bush. If you want a website that will work for you, then you are going to have to part with a few pound coins at some point. But how many pound coins do you really need?

Since we last saw Stan he’s narrowed down his choice of website designer using our (sort of) patented ‘Website Designer Interrogation Cheat Sheet‘. He chose a designer who could create what he wanted and who he felt he could work with. Part of the final decision came down to cost (of course). Stan’s initial enquiries pulled in a whole range of website options and costs. It was confusing and initially it seemed impossible to work out which was the best value for money. That was until Stan suddenly saw how to work out ‘The Total Cost of Ownership’.

Working out the total cost of ownership of a website got Stan past pricing smokescreens and allowed him to focus on the real amount he would pay over the next few years. By comparing these prices together with the website features each option offered he was able to see clearly which option was best for him. Now we’ll show you how to do the same.

Stan started by thinking about how long he wanted the initial phase of his website project to last. He decided that three years was a good time frame. This would give the website time to grow and help his company expand. At the end of this period he could step back and see what he’d achieved and reflect on where he might like to take things in the future. He decided that he did want to look at online payments for the future so the website had to have the potential to incorporate this feature but he decided to treat those costs as a separate issue for later.

So here’s what Stan worked out.

Stan decided that his website is central to his business so what he really wants is a website that he can control himself. He wants to be able to update it himself, as often as he wants, whenever he wants. A website with a content management system provides all these features but the cost was a bit more than Stan was expecting. The website designer that Stan really wanted to hire said he would charge around £3000 to build a fully editable website with all the features Stan requested. This would however give Stan full control the website so he could add and modify pages without having to refer back to the website designer. On top of this cost Stan would also have to pay for his website hosting and domain name registration. So Stan sat down and work out the total cost of ownership for the content managed website over three years. This came out to be…

£3000 inital setup

3 x £50 = £150 website hosting

3 x £10 = £30 domain name registration

Grand Total = £3180

Initially this seemed like a lot of money to Stan considering his existing website had cost him less than £500. While he trusted his new website designer he decided he’d better investigate other options too.

As for many small business owners cash flow is always a problem for Stan. He doesn’t have loads of money in the bank so when he saw that you could actually rent a website it seemed like it might offer a solution. The prices he found were all based on the number of pages on the website. They started at £30 per month for a five page website and increased to about £70 per month for thirty page website. There were no setup fees, website hosting was included and the monthly fee covered a number of updates to the existing pages. As the advertising blurb said, “…a website for a less than the price of a cup of coffee each day”.

Stan already has a five page website. He paid £500 to have it built and has been paying £50 per year for his website hosting. The renting option compared quite well with this, especially considering the included updates.

But Stan is now more canny. He now knows that in order to make the most of the web he’ll need to expand his online presence quickly.  He wants to add extra product pages, tutorials, featured products and special offers and he’s set himself the task of writing at least one good article for his site every other week. This is going to add around 30 pages to his site each year. So for the first year he’ll need a 30 page package, a 60 page package in the second year and a 90 page package in the third year. His total cost of ownership over the next three years works out at…

12 x £70 = £840 for year 1

12 x £105 = £1260 for year 2

12 x £125 = £1500 for year 3

Grand Total = £3600

The biggest glitch though is that after paying all that out he still doesn’t control or own his own site. He would still have to go through the website designer to make any changes, and there would be a waiting period for each update. He can’t just do it as and when he wants.

This is pretty much where Stan already is. He wants to change the look of his site so he asked for some quotes to build a new website from scratch. The prices he got back averaged around £750 for an initial 10-page site-build and then around £90 for each extra page. A few designers also offered a maintenance contract to keep the the site updated. These came in at about £190 per month for three pages with some modifications to existing pages. On top of these costs Stan would also have to pay for his website hosting and domain name registration which came in at £50 and £10 per year respectively. Over three years Stan worked out the cost to be…

£750 initial setup

3 x £50 = £150 website hosting

3 x £10 = £30 domain name registration

36 x £190 = £6840 maintenance and extra pages

Grand Total = £7770

And he still wouldn’t have total control of his own site!

Working out this total cost of ownership in this way showed Stan the real cost to his company to run this website for the next three years. He could also see that the major difference between his existing website and where he wanted to be was in the cost of updates.

If all Stan needed was a few pages about his company and a simple product list that he didn’t change often, then options two and three would be cost-effective.

However, the newly savvy Stan now knows that in order to make the most of the web and become a spider, not a fly, he needs to keep updating his website, adding new information, new products, tutorials and new ideas. Although the fully editable website seems a larger outlay to begin with he now sees that he will quickly recoup his investment as he works to build the site. And the harder he works to build the site the more business it will bring him in return…just like our friend the spider, spinning his web.