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Setting a budget for your web presence isn’t the easiest thing in the world, but it isn’t rocket science either. Before suggesting some ways to approach budgeting, here are a few approaches to avoid.

The single biggest mistake I’ve seen companies make in initiating a new site (or a re-design of an existing site) is what I call the ‘poor catalog’ approach. These firms budget dollars for building a site, then nothing else. That’s like budgeting for production of a new catalog or capabilities brochure, then planning no further expenditures for using the piece in a direct mail program, as a response to inquiries, to disseminate at trade shows and so on.

A good rule of thumb is to devote half or less of your budget to initial site development, with the other half reserved for updates to the site and site hosting and promotion for the first year. Keep in mind that you ought to continue the budget allocation for updates, hosting and promotion for subsequent years.

The second budget approach to avoid at all costs (pun intended) is what I call the bargain basement bandit. This is the person who is moonlighting, or doing their first site (after Aunt Molly’s and their own personal home pages) or is the high school or college student son or daughter of a colleague. Nothing against moonlighters and students – in fact I’ll try to hire them if they can work within a system. They’re often attractive because they quote a real low-ball number for the job. Even if they came close to meeting the criteria for choosing a supplier in chapter one (a difficult task, indeed, because of the wide range of skill sets involved), they’ll soon find the time required for your project is much more than they bargained for. And you’ll soon find that they are hard to reach and that response time gets poorer and poorer. If you even consider going down this road, have a frank discussion up front about the time commitments. Plan to help your supplier succeed. Plan regular progress reviews. If you genuinely want to help them get started and succeed, don’t let them sell themselves short financially – you’ll both suffer.

Another budget approach to avoid is the “package plan” that many small web shops put together. Rarely does even a simple web presence fit the pre-packaged approach many suppliers develop to get you in the door or to make for an easy sell.