I get asked this kind of question a lot. And the information rolling around online completely fails to give a clear answer to this question for a business owner or startup.

If you are starting a business, you HAVE to invest. Time, or money, one or the other, usually both.

If you fail to do so, YOU WON'T HAVE A BUSINESS.

And your potentials for income are a DIRECT result of your investment and dedication.

After years of experience designing sites for small business owners, and after observing their results over and over, I finally devised a formula which can be applied in any situation, to any level of web development. I saw this play out again and again with our clients.

First, understand that marketing and web design go hand in hand. You cannot pay for one and neglect the other, or your investment will be useless - for it to work, you must invest in both.

This is the formula I devised:

How much do you expect to earn (in profit) from your website in the next year?

Divide that number by four for a NEW business, and by 20 for an EXISTING business.

• You should be willing to spend that much on website design and basic search engine optimization (which should mostly be done as the site is built). NOTE: You can invest this in TIME, but the learning curve is VERY HIGH, and there is a LOT you have to learn and do.
• You will have to spend another fourth of the amount on marketing to get the site launched and stabilized - later you can spend the smaller percentage, but to get it started you'll need to back it with a sound marketing campaign. NOTE: You CAN invest this in TIME, but it has to be EFFECTIVE time.

Any good web designer and marketing consultant team should be willing to give you reasonable assurances of meeting the goal of doubling your investment within 1 year of the launch date (when the marketing campaign begins).

Most of the time you can do much better, but if your product is sound, and you DO THE WORK, you can almost always meet this goal.

This means, if you spend $150 on a website and marketing, you really have no reason to complain if you make only $300 from it the first year.

Your site will still work, and it will still grow from a small investment, it will just be MUCH slower.

Long term, your ongoing costs for maintenance and marketing should be closer to 5% of your profit margin each year, often far less. A higher cost ALWAYS applies to getting started.

The purpose of this formula is not only to give you an idea of what you should expect to pay, but also to help you understand the minimum you can expect to get in return.

Many web designers and marketers are reluctant to give any kind of assurances of returns. We all know that it is slow, and many small business owners give up before the website starts to pay if they did not have sufficient funds to compete right away.

Even if you market on the cheap - most of my clients do their own marketing - if the strategies you use are sound, this formula will still work! Most of my clients in fact do much better than this, but it is due to their dedication and drive.

A website and marketing are well worth paying for. They are the backbone of online business, and they can return your investment many times over.