WEB DESIGN IS BROKEN Cue the music Today is the culmination of this journey
into budget. I hope you have enjoyed it thank you so much for joining me on this
journey. I'm really excited to actually open up this final piece of the puzzle
which is how you can figure out a reasonable budget for your website that
is sane, and that doesn't give you things like buyer's remorse afterwards and that
you can actually go back to in several months time and be like 'well actually I
can see exactly why I spend what I did on that project' Up until this point you
would have been aware of your biases as a human including loss aversion, wherever
you're coming from a pain or a gain perspective. You also were mapped out
where your project sets on a graph of risk versus complexity; high risk low
risk high complexity low complexity. And you'll have start to have a feel for
what size of investment you should make. Now this last bit what we're tackling is
actually what is it worth to you in Pounds Sterling:
let's do this. Let's talk about ROI: return on investment. This is gonna be
one of the key bases upon which you place your web design budget. You're not
doing this for your health - well at least most people aren't doing this for their
health. If you're a commercial organization even if you're a charity
there is some metric by which we will judge the success of any project that
you undertake. Websites are no different. I'm gonna use money because that's the
world that I live in, most of my clients commercial organizations at some point
it boils down to how much money we gonna make out of it. Let's use that. The key
things to remember when we're exploring what something is worth to you what this
website project is worth to you is to think about the tangible and the
intangibles. So the tangibles are
all things that this website might be worth to you might be the new
capabilities it gives you it might give you the ability to serve your customers
better. It might give you the ability to ship products to new markets
internationally or something like that. It might give you the ability to reduce
your administration. These are all very tangible things things that you can look
at maybe on a balance sheet go 'well hey look we've got this capability now
that's provided to us by the website and it's worth exactly X we can measure that'
But there's also the intangible aspects of it as well brand recognition, thought
leadership, social influence things like this though. They also have a value to
your business and can affect the way that you do business to a greater or
lesser extent so those things have to be considered jointly. Let's jump into a
more concrete in example. Let's take consultancy for example let's say you're
a brand new consultant. You've got to a fantastic place in your
corporate career but you want to take that next step you want to reach further
shores. Let's say you think that in your first year as a consultant you'll work
your existing networks, you'll do some extra networking you think you could
land say five clients in your first year and let's say that those clients pay you
about ten thousand pounds each year fifty thousand pounds at, I don't know, twenty
percent profit. So you've got ten grand profit. Fantastic. Great business. Nice. Now
you also see the value that other consultants before you have got out of
having a good website you've seen how it made them look a lot more credible.
You've seen how they've used it as a platform for their thought leadership
you've seen how they've been able to share their content more easily around
social networks and you've seen how they've been able to charge a premium. So
you think maybe if you had a decent website that made you look good and
professional help people understand who you are why you do what you do and why
you're better than the competition and also gave you a platform for sharing
your thoughts and ideas about your industry you, think that that could not
only help you sell out say a 10% premium but you could probably land one or two
extra clients as a result of the increased reach and influence that the
website will help you to achieve that year one starts to look a lot different
So our first five clients instead of them spending ten thousand each they're
spending eleven thousand. So that's five thousand extra pounds and that's just
pure profit because you've sold out a premium
You've not delivered anything different you've just sold at higher price plus
the extra one to two clients that you think you'll make on the back of it. That
year starts to look like 66 to 77,000 in revenue and 18 to 21,000 in profit. Those
are significant numbers. What we've got to do now is take our do-nothing
scenario and compare it against our website scenario in a do-nothing
scenario we thought we'd make 10,000 pounds of profit in our website scenario
we think will make 18 to 21 thousand pounds of profit. If you take those two
numbers away from each other then you're left with the core of what a
website is worth to you. This is the upside that you hope to gain by
investing in a website. So now we've got this figure this extra 8 to 11 thousand
pounds what do we do with that now this is where it's over to you, because the
reality is is that unlike regular equities unlike normal
investments websites typically don't hold a huge amount of value to anyone else
outside of that business. Yes it is possible to sell an e-commerce and sell
that but for the types of businesses that I know I deal with on a daily basis
most most of their web sites are only valueable
and only really work in the context of that business. If you were selling the
business then yeah the website would definitely be an asset. But what we're
looking for with websites is generally a good rate of return. You can actually
spend more money than you will ever get back out of it you can end up in
negative equity. So if we're taking this eight to eleven thousand pounds there's
no point in spending 12 because you'll spend 12 you'll get 11 back in the first
year and you'll have to wait two years to see an actual return. So you might
want to start by thinking 'what am I willing what am I prepared to risk
money-wise in order to see that kind of return' go back to the Risk vs.
Complexity quadrant that we were talking about in the last video: is this high
risk high complexity? Yeah well then you want to be investing 50
percent maybe even more than that. Is this a low risk low complexity thing?
Well then invest as little as you can to get a reasonable job done. Only you are
gonna know what the answer is. I hope you've understood that it's not a cut and dry,
one-size-fits-all answer and at the end of the day it's your business. It's your
responsibility so you've ultimately got to make the calls on it. I'm just hoping
that what I've done in these videos has been enough to help you make that
informed decision and help you feel that you're making the right choice when
you're buying a website. My name is Aaron Taylor: I'm helping you have better
conversations and make better decisions when you are buying a website. Till next
time
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