Pricing a website is similar to pricing a house. Imagine going to a home builder and telling him "I need you to build me a house." He would then proceed to ask you a series of detailed questions regarding your needs for a new home and your budget.

The most important question may be regarding your choice of floor plans which can vary dramatically, and the price depends on many variables. Do you want a modest 2-3 bedroom home in a decent subdivision? Or how about a luxury mansion by the golf course and the lake? Are you looking for a home in a good school district, or do you need a retirement home, vacation home or a combination of both?

Then there are always various options which can be added such as a swimming pool or spa, additional rooms such as a library, music room, designer touches, etc. All of these add to the price of the home.

This analogy can help you understand how web development works.

Just like the investment of time and money you would make when designing your home, the investment you make in your web site development project depends upon its complexity. In web design, the elements range from the level of visual sophistication to the type of programs you require on the site. There are hundreds of variables that will affect the cost of your project, but ultimately what it comes down to is time and materials. The more time and/or materials it takes, the more your project will cost. As with homebuilding, it is helpful to begin with the end in mind. When thinking about the completed web site you will require, here are ten things to consider:

1. What are your needs and goals? What do you expect the website to accomplish for you?
2. Do you already have an established business with its own unique brand and identity, or will the website content be conveying this to prospective clients for the first time?
3. Do you need the site to serve as a "brochure" or informational website only, or will you need a more interactive design?
4. What are the needs and expectations of your site visitors, customers and clients?
5. What do you require in terms of functionality in the website (i.e., ecommerce shopping carts and real time credit card processing, databases, advanced programming, etc.)?
6. What is your budget for the website? Have you established a budget?
7. Do you want all the bells and whistles of the larger more well-funded websites?
8. Will your website be database-driven?
9. Do you need a CMS (content management system) so you can add your own information and update the site and pages yourself?
10. Do you need dedicated hosting (for larger sites with numerous custom programs and dynamic content delivery and interaction) or will shared hosting suffice?

Let's look at a few examples:

A small business owner wants a website in order to have a presence on the internet, but the company's needs are quite simple - about 4-5 pages with information about the business, the services they provide and a feedback form to gather information from clients and prospects. Their budget isn't that of a Fortune 500 company and they already have a few pictures and a logo for use on the website. A web design company specializing in designing websites for small to medium sized businesses would take on a project like this for around $400-$500. A web design firm catering to medium-sized and larger businesses would consider the website design for around $2,000-$4,000, depending on their answers to #1-#10 above. A larger web design firm would probably decline to service this project since it is too small.

A company recently contacted us about developing a website similar in scope to a very large and very popular online dieting website. We first asked: Do you want all the bells and whistles of this website? If so, they're probably looking at search engine technology (to search through recipes, for example), a CMS (content management system), a mechanism for designing custom meal plans and shopping lists, forums for a support network, chat software for communication with other members and experts and much, much more. Even with these features, this would be quite a large project. At a minimum, all of the above mentioned features would cost at least $20,000 to $30,000, and most likely even more. Also, the company would need a dedicated server, which would add to the expense because of the heavey programs necessary to generate that kind of dynamic content and the higher number of custom programs that will be needed to support this level of user interaction.

Consider that this cost estimate is merely "chicken feed" compared to what The Wall Street Journal spent to upgrade their website ($28 million). Hewlett-Packard has also recently spent tens of millions of dollars revamping its web site in an attempt to make its e-commerce effort more coherent after its acquisition of Compaq Computer.

In summary, the cost for a website is determined to a large degree by what you can afford to spend. The complexity, size, and needs play an important role as well as the level of expertise and experience of the design team.

Generally speaking, the more you spend on your website, the more website you will get for your money, an obvious statement but true none-the-less.

Additionally an important component, beyond the scope of this article, addresses the promotion and marketing of your site. The best project in the world isn’t likely to be successful if no one knows about it. Be sure to include the costs associated with your marketing program.

This leads into the second most asked question of web developers, "How long does it take to build a website?"

That depends on several variables...

How Much and How Often Should You Pay A Designer or Developer?

Every web development project has three distinct factors: price, quality, and time. As the website owner, you get to control any two of these factors, while the designer or developer gets to control the other one. If you want great quality and a low price, don't expect to get your store anytime soon, since no good designer will work for cheap. If you are in a hurry (time) and you want a great user experience (quality), you'll need to pay more (price).

Next, you will need to pay your contractor throughout the project. For example, if it is going to take four weeks to design and develop your new ecommerce store, you should expect to pay your designer as they hit milestones. For example, once the graphic design phase is complete, you might make a partial payment. Later when the shopping cart is up, you would make another payment, and finally once the site was live, you'd pay in full. This is a normal practice, so expect it.

In terms of an hourly rate, in 2009 you should expect to pay web designers somewhere between $65 and $150 per hour for building your web site. Don't be surprised if it takes from 20 to 200 hours depending on complexity.

For a developer, you should pay between $80 and $400 per hour depending on the language and complexity of the project. For example, if you're asking for an xQuery-based content ingestion, normalization, and retrieval tool to integrate with an asynchronous JavaScript and XML (AJAX) user interface, you'll pay $300 to $400 per hour. If you want a Flash application based on Flex, you should pay $120 to $170 per hour. Integrating a PHP-based shopping cart with QuickBooks via a web service should run you $80 to $120 per hour.

Finally, you would be wise to retain your web designer or developer to handle problems or make small changes in the future. A normal agreement would have you paying the designer or developer for one hour of work each month. You would accumulate unused hours for up to 12 months. So if you needed to make changes after your store had been up six months (and you had been paying your retainer), you'd have six hours worth of work already paid for and your designer would be obligated to get the work done.

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“The bitterness of poor quality remains long after the sweetness of low price is forgotten”
– Benjamin Franklin