Your Website - Your Most Profitable Resource
Any good business owner will tell you that if you want to be more than just an employee in your own business then you need to grow it to the point that you have resources working for you, leaving you to step out of the day-to-day activities and focus on strategy and further growth. Arguably, the most valuable resource your business has is its employees. However, probably your next most valuable resource is, without a doubt, your business website. Why, you ask?
Let's look at things this way. Let's say you have an employee who you pay $4 000 a month, and brings in $8 000 in income over the same period. Let's also say that you have a website that you have grown and invested in, with total setup costs of $8 000, that brings in direct and indirect income of just $1 000 per month. I've intentionally been conservative on the monthly income of the website so as to prove the point.
Okay, now let's break things down:
EMPLOYEE COSTS OVER 3 YEARS
Total revenue generated: $288 000
Total costs: $172 800
- Salary: $144 000
- Additional costs (super, uniforms, incentives, , office space, petrol, telephone costs, etc): $28 800
Total profit: $115 200
Profitibility ratio: 40%
WEBSITE COSTS OVER 3 YEARS
Total revenue generated: $36 000
Total costs: $15 200
- Website design & programming: $8 000
- Maintenance costs: $7 200
Total profit: $20 800
Profitability ratio: 58%
Admittedly these figures are going to vary very dramatically from one business to the next, but I've specifically tried to be much more conservative on the revenue potential of the website compared to an employee. The point that all this proves is not that employees aren't valuable (they clearly are the most valuable resource), but that even a very low income generating website is more profitable per dollar spent on it. And here's why. Your website:
- Never stops working, 24hours a day, 365 days a year.
- Hardly ever asks for increases (technology-related costs tend downwards over time).
- Increases its rate of return on investment over time (maintenance costs less than the initial setup costs).
- Only marginally increases your running costs.
- Costs are fixed and predictable, even in high inflation periods and times of skills shortages.
- Fulfills multiple roles (sales, marketing, support, customer service, etc).
- Is reliable (no sickies, bad days, hangovers, family issues, intra-office issues, etc).
At the end of the day, it's just simple maths that spending money on your website is about the most profitable resource your business can invest in.
