How to determine your branding, app, or website budget

Would you kindly strip naked and dance on the table for me?

Wow. That was uncomfortable! Now, let’s take it up a notch; what is your project budget?

The two questions above are very different, but they share one thing in common. I ask the second question on a regular basis, and the response is sometimes what I would expect had I asked them the first. So why is that?

People feel uncomfortable talking about money, and in this article I will investigate why this is the case and why it really shouldn’t be.

The misconception

So what exactly is it that makes people reluctant to reveal their website budget? Well, lets have a look at the two possible scenarios…

Firstly, for low budgets there is the perceived “shame” of not having enough cash to invest. There is no reason to be embarrassed about a low budget, it might not be as low as you think and there are ways to tailor a project and customise it within the constraints.

Secondly, if you have got plenty of cash to spend you might not want to show your hand immediately. You might think that the agency will be rubbing their hands together with glee, as they think about how to spend your every penny. This may be the case for some, but it should be very easy to find them out.

The solution to both scenarios is simple; Tell them your budget and see how they react, it is easy to identify greed or disinterest. Good people will always come back with a helpful response giving you an indication on how far the budget can go and what a good course of action would be.

Guesswork is hard

As with any negotiation scenario, it is worthwhile to take a moment and imagine that you are on the other side. Picture yourself as being the designer; if you don’t know the budget, how do you know what is possible? If you squeeze the costs as much as possible you might not get the best results, or alternatively if you quote for the maximum amount of work it may be perceived as unaffordable.

It is really important to get the balance right, not just for the agency involved, but also for your business…

How do I calculate my budget?

The main thing to remember is that any monies spent on branding, design and development is an investment. You are buying something that will help grow your business. At the start of your voyage you may not have the money you need, but think about the ongoing income in the future. Again, most good people (freelancers and agencies alike) are understanding of this and are often happy to agree a payment plan that fits in with your cash flow forecast.

Think Monthly

How much money will you make each month? Whilst it is difficult to predict the future, I find the best way to predict is to think pessimistic, think optimistic, and then draw a sensible line somewhere in between.

From this figure, think about how much you can afford to pay your agency (or freelancer). Always keeping in mind that without the work being done the rewards are less likely to surface.

If you have a good business plan, and cash flow forecast, then you should quickly be able to identify the realm of realism for your budget.

Quality is important too

With all this talk of money it is easy to forget that the most important thing is what you actually get for it. Much like any industry, quality comes at a price. If you can only afford to buy a Ford Focus, you would require Jedi negotiating skills to come back home in an Aston Martin.

Again, it is a matter of balance, and Colin Harman’s Venn diagram visualises it perfectly. However, this doesn’t quite give us a detailed picture of what constitutes a higher quality agency…

There are companies out there that will deliver a whole project, for a low cost, without any face to face meetings. There are others that have more pragmatic processes, with plenty of meetings and prototypes planned into the schedule. If the latter is the case, then you’re far more likely to get quality results that will lead you towards success.

Talk, talk, talk

Overall though, it is about honesty. In my opinion, part of being good at business is being a good judge of character. Speak to the people at your agency, get to know how they operate and you’ll soon realise if they are worth dealing with. They should show an equal interest in you and your business. If they don’t, it is not going to work out, and that is the biggest indicator of all that will help you determine if they have considered your budget responsibly.