ONLINE BUSINESS

On-Line: Building the Price-Wise Web Site

Don't overspend on the World Wide Web
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It's easy to feel intimidated if you're a small-business owner exploring the Internet's World Wide Web. Because of the proliferation of Web sites, it can seem as if all the other businesses out there must know more about this new medium than you do. Rest assured: they don't. I recently wrote a book about small business's use of the Web, and in my research I talked to approximately 100 owners of small to midsize companies that have attractive Web sites. I discovered that even informed small-business owners are sometimes just guessing about how to set themselves up on the Web. The prices the companies in my sample paid for Internet-related services such as Web-site design and maintenance varied wildly. (See "What the Market Will Bear," below.) Here's how to avoid three of the most common costly mistakes:

? Mistake 1: Hiring a high-priced designer. It's possible to pay $100 an hour for a Web-site designer, but the most expensive designer isn't necessarily the best. Shop around carefully for an affordable yet skilled designer. Before you sign on with any designer, pay for a small mock-up of your site, but don't ask for meaningful text or fancy graphics yet. The mock-up should be more of a flow chart, showing the site's structure and the way visitor traffic would proceed. Make sure the designer demonstrates an understanding of your business, and don't forget to build penalties for missed deadlines into the contract.

Some CEOs assume they're saving money, or even spending no money, by designing a site themselves. When you consider the value of your time and the amount of effort required to set up a good site, there may be no savings involved. Plus, homegrown sites can often look shabby compared with professionally designed ones.

? Mistake 2: Buying a special "Web server" computer. Thinking about hosting your site in-house? Forget about buying those Sun Microsystems or Silicon Graphics machines that have been specifically designed to host a Web site. Unless your site is video-intensive and links several databases and other functions to the Web site, you don't need anything that high-powered. Many small companies serve successful Web sites from a simple 486 or Pentium personal computer. The savings can be real. Specialized Web servers start at $5,000 and can run as high as $60,000, while a new Pentium machine will cost about $2,000 to $3,000.

Given the low traffic a typical small-business site has, the site's bottleneck is more likely to be the speed of the phone line than the power of the computer hosting the site. Internet phone connections are only as strong as the weakest link in the chain. If your site is connected to the Internet by a slow phone line (a standard phone line connected to a modem is the slowest option available), even users coming in on a faster connection can still have trouble. Your best bet for optimum service on a tight budget is to skip the hot server computer. Instead, ask your Internet service provider about leasing a fast phone line, like a 56KB or T1 line.

? Mistake 3: Getting lost in the hype. I've seen too many otherwise prudent small-business owners get caught up in the lure of the Internet -- and lose sight of the bottom line. Keep asking yourself, How will this thing earn its keep? How will I measure its effectiveness? Question every price and expenditure, just as you would elsewhere in your business. Pricing for the Internet and the Web is wildly in flux right now. Some Internet service providers charge more than others for hosting a Web site just because customers don't know enough to shop around. Compare prices, and demand the same reliability in products and services that you would from any vendor.

Remember, a Web site isn't like a print ad, in which you have only one chance to get things right. Expect your Web site to change constantly. Unfortunately, many companies don't plan for site changes. They sink too much money into the site up front and then go over budget when it's time to start editing. It's wiser to think of a Web site as a long-term project -- and thus rein in your up-front spending.

What the Market Will Bear

Interviews conducted in late 1995 with approximately 100 small to midsize businesses turned up major pricing differences in every aspect of Web-site development and maintenance. The data below were extracted from those interviews.

Total cost of in-house development labor for the Web site From negligible to $70,000

Total for professional design, if used From $500 to $50,000

Total monthly storage/serving fees, if site is not hosted in-house From $30 to $3,500

Total software purchases necessary From $0 to $20,000

Total hardware purchases necessary From $0 to $50,000

Staff writer Phaedra Hise (phaedra.hise@inc.com) is the author of Growing Your Business Online, due out in October from Henry Holt & Co.

Last updated: Sep 1, 1996




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