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How Much a Website Costs Per Year Explained

Website Costs Per Year

So, how much does a website cost per year?

Wait for it…. it depends. 🙂

But yes – “it depends” is not helpful at all.

The Short Answer to Website Costs Per Year

Annual website cost = domain + hosting + software + labor + annualized upfront costs

  • Domain costs range from $9 to $15 per year for a .com or .org
  • Hosting costs range from $60 to $240 per year for shared web hosting
  • Software costs range from free to $100 per year for backups & security to much higher
  • Labor costs range from free to thousands of dollars
  • Annualized upfront costs are how you want to budget upfront costs like design & themes

I highly recommend “annualizing” your upfront costs because that is a big consideration in how you want to approach actually building a website.

If you use a “hosted website builder” like Wix, Weebly or WordPress.com, then you’ll be paying all these costs in a single bundled subscription price. Your annual costs are elevated, but predictable.

If you build your website a la carte with self-hosted WordPress (even if it’s with a “builder“), then you can control a lot of your costs and get access to a lot of features that a hosted website builder might take away (e.g., actually having a custom domain or SEO features).

The Long Answer to Website Costs Per Year

But here’s the thing, your annual website costs really do depend on your choices & goals. I’ll break down how much a website should cost, and what variables you can play with to make sure your costs fit what you want to get out of it.

Consider a few websites that I have personally been involved with.

Website #1 cost $0 upfront and now costs $8 per year to maintain. It is a single page and written in HTML/CSS that I wrote. It lives on a Google Cloud account with a $300 promo credit with my low-traffic website generating all of pennies worth of traffic every year. It runs on a custom domain name that is $8/yr to renew. That’s it.

Website #2 cost $20 upfront and now costs $0 per year to maintain. It is a personal photo blog that lives on WordPress.com. I bought a nice premium theme at the beginning for $20. Now I keep it on a free *wordpress.com subdomain with limited ads & links to WordPress.com in lieu of annual fees. That’s it.

Website #3 cost $120 upfront and now costs more than $1500 per year to operate. It started with a free WordPress theme and a year of shared hosting plus a custom domain. Now, it requires a VPS server with secondary backup & security software in addition to premium software plugins and a small budget for a few hours of developer / designer time.

Website #4 cost $300,000 upfront and now costs $30,000 per year to operate. It started with custom branding & design in addition to extensive custom development and deployment to dedicated hosting (now moved to cloud hosting). It also requires monthly staging for software updates, in addition to technical maintenance, and a extensive suite of 3rd party plugins for email, A/B testing, etc.

So there’s a lot of factors involved in website costs. But that’s not a reason to throw up your hands and just say that “it costs what it costs” – or worse, get started on a project and have to quit after a year because it’s more expensive than you wanted the project to be.

Let’s look at the factors individually, how they work, and how they add up.

And while we look at each factor, I’m going to use an analogy that has worked well for readers in my other post about ecommerce. I’m going to compare building a website to building a house since most people are somewhat familiar with what goes into living in a place.

Ecommerce Real Estate Tradeoffs

To start, begin imagining a hosted website builder like a townhome in a gated development. You have more control & say over your house than a Facebook page (a hotel room in the analogy), but a lot of things are taken care of with a Homeowner’s Association or Condo fee. A self-hosted website will be a detached single-family home in a neighborhood. There’s no recurring HOA or condo fee, but you are responsible for everything.

Domain Costs

Unless you want your website as a subdomain on someone else’s domain, then a custom domain name is the one critical cost variable for your website.

In our real estate analogy, a domain name is like your street address. You technically don’t need it…unless you want people to be able to find your house / website.

Thankfully, an annual domain does not cost that much. Even if you maintain a WHOIS privacy add-on, a .com domain should not cost more than $12 per year from somewhere like NameCheap which specializes in cheap long-term renewals.

In fact, many hosting companies will usually bundle a free domain for a year with the purchase of a hosting package. And other domain companies like GoDaddy will do very deep discounting (though will be more expensive at renewal). Some hosted website builders will bundle a domain name as well.

Either way, you really only need one, unless you have strong reasons to buy extras.

I’d budget $12 per year for this annual cost.

Hosting Costs

Hosting is where your actual website files live. Whether you are bundling with a website builder or self-hosting on your own hosting account, it’s a cost that you can’t really get away from.

In our real estate analogy, your hosting account is like your land / property. You not only need it, but it can dramatically affect how much of a headache / cost your website is.

Think about land in the real world, sure, there is plenty of super-cheap or even free land…but it usually has some tradeoffs. The land might be distant from highways or it might not have the best neighbors or it might not come with water or electricity.

Hosting is the same way. You can get super-cheap hosting for your website. But you will generally get what you pay for. In fact, paying for a good host can make a lot of your other costs much, much cheaper.

Many hosting companies include domain names, drag & drop tools, high-touch customer-support, and security / backups that take pressure off your domain, software, and labor costs.

For example, the host that runs this site (InMotion Hosting) has WordPress plans that are a bit more expensive than typical web hosting plans. But they come with a subscription to JetPack (speed, security & backups) in addition to high-touch support and a drag & drop design tool.

InMotion Support

 

And plenty of other hosts offer similar setups (like SiteGround, Bluehost, and others). But, of course, the extras can only go so far since hosting costs will likely be your single largest annual cost. Thankfully, it’s also a cost that will generally only rise as your number of visitors rises (and so, presumably, your ability to pay for it).

For a good shared hosting plan, I’d budget $120 per year.*

*Note that many self-hosting plans allow multiple websites on a single account. If you have several websites, then self-hosting makes your per website costs even less. And again, for a hosted website builder, this cost is bundled, but is per website no matter what.

Software Costs

Software is what you’ll use to actually build & operate your website. Now, technically, you don’t need software to build a website.

In our real estate analogy, your software is what makes your actual house. It’s the framing, plumbing, electricity, roofing, drywall – the actual pieces that make the house.

You can hand-code HTML / CSS files and upload to your hosting account for no costs. I’ve done that before. It can be useful. But…almost all website owners (and visitors) want the interactivity, ease of use, versatility, and management functions of modern website software (just like you could cut down trees to make a log cabin…or you could have a house).

Website Hosting HTML Files

There are also a lot of 3rd party software that you might want in addition to your actual website. Think about the costs for email marketing software or design costs / themes or specific plugins (like ecommerce). Sometimes these costs are even greater if you go the hosted website builder route, since sometimes they won’t have native features. You’ll have to add them via a premium app.

For software, you could do $0 per year…but I’d recommend adding in at least $100 per year for backup & marketing software.

Labor Costs

Every website requires time, thought & expertise to actually build & operate. This factor is where you’ll encounter a massive range of costs that is totally up to you.

In our real estate analogy, labor is literally who builds & maintains your property. Do you want to hire an architect or build off pre-made blueprints? Do you want to hire as things come up or have someone in charge of everything? Do you want to outsource cutting the grass or just electrical issues?

If you are self-hosting your website, your software will take care of most of the “bones” of the website, but you’ll still be in charge of choosing an off-the-shelf design / theme. You’ll need to run software updates. You will have access to support via your hosting company, but some things will be out of their scope & expertise.

If you go the hosted route, you’ll have labor pre-paid for that will take care of all the maintenance…but a lot of the design choices will still be up to you. Think of it like an interior designer – most everyone does it DIY…but you can also tell who has spent the money to hire everything out.

I’ve written a guide to hiring a web designer and a marketing consultant, but I also have a guide to building a minimally viable website. There’s a lot of way to budget – all depending on your goals & expertise. I personally do most everything DIY, and spend very little on labor to maintain my website.

But last year I also paid $100 for someone to remove a hack from a client site. I paid $50 for a few image designs. I’ve also paid $500 for a custom plugin. The costs can widely vary, but it’s important to think through your ideal budget and the “what if X happens” budget”.

Annualized Costs

Annualized costs are upfront costs that you smooth out over the course of a project to get a sense of true annual cost.

In our real estate analogy, there are going to be a lot of things that you purchase upfront for a house…that you use but don’t pay for year after year even though they will need to be replaced at some point. Think about your appliances, your roof, your HVAC, etc.

With a website, your annualized costs will mainly be things like a prepaid hosting bill (most hosting companies give big discounts for multi-year commitments), a premium web design or theme, a premium plugin purchase, setup costs, course subscription, etc.

Whatever you have budgeted to spend upfront, I’d recommend smoothing that out and combining it with your annual costs so that you have a good sense of the true cost of your website project.

Sticking with a commitment is usually a mix of good habits and good expectations. I’ve seen too many good website projects start and fizzle because expectations were set too low or too high.

Adding your total website costs will help you back into what your commitment will actually require.

Adding up Total Website Costs per Year

Now, let’s talk about adding it all up. The formula is pretty straightforward. Take all your costs and add them up.

For a small blog project that is self-hosted on WordPress, you’d likely end up with –

  • Domains = $10
  • Hosting = $100
  • Software = $100
  • Labor = $0
  • Annualized = $10 (for 5 years)
  • Total Annual Costs = $220 per year

For a small ecommerce store on Shopify, you’d likely end up with –

  • Domains = $15
  • Hosting = $0
  • Software = $400
  • Labor = $200
  • Annualized = $35 (for 5 years)
  • Total Annual Costs = $650 per year

But here’s the thing. Your costs won’t just vary based on your plans, but also based on what happens.

In large organizations (like the US Army), they refer to “scenario planning”. It’s where you map out several scenarios, determine what costs go with each scenario, and assign probabilities.

It sounds complex, but it doesn’t have to be. It just means that you need to come up with a range of costs depending on what actually happens.

For the small blog project, there’s a scenario where you find out that theme editing is quite easy and you don’t need a premium theme upfront. There’s also one where your site gets hacked and you need to pay Sucuri to clean it for $100.

For the small ecommerce store, there’s a scenario where you really need custom shipping rates and have to upgrade from Basic Shopify, thus increasing your software costs. In another scenario, you get the ropes of installing apps & editing designs, so you don’t need to hire anyone to setup the store.

Add up your range of website costs – you’ll be able to figure out what the project is worth. And what you want to get out of it.

Next Steps

So the true answer to “how much does a website cost per year?” really is… “it depends.”

But there is a way to breakdown your costs with your goals and your resources.

Thinking through your own costs can set the right expectations and set you up for success.

Learn how to find the best web host here and how to find the best website builder here and the best ecommerce hosting here.

Explore my other explainers here. If you found this post useful – do please share 🙂

The post How Much a Website Costs Per Year Explained appeared first on ShivarWeb.

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