Are You, Like Most People, Spending Too Much on a Website? But how much should you be spending on this all-important asset?

Every modern business needs a website. Without one, it's going to be practically impossible to centralize your marketing efforts, reach new people or scale your business effectively. That's why designing and developing a website is usually priority number one for new entrepreneurs.

But how much should you be spending on this all-important asset?

Depending on your goals, you could get a website up and running for less than $100, while the average business spends somewhere between $12,000 and $150,000 for the finished project. And that's not including the ongoing costs of website maintenance.

As far as I can tell, most people are spending far too much on website design and development.

But why is this the case? And what can you do to avoid it?

Related: Should Your Business Spend Thousands of Dollars on a Strong Domain Name?

Free and inexpensive options

These days, you can use free website builders to build a website cheaply, or even for free. In my experience, the free aspect of this title is a bit of a misnomer. By the end of your experience, you'll probably end up paying money for a domain, a theme, miscellaneous extras and other expenses that aren't transparently revealed at the beginning.

Still, if you go this route, you can put together a somewhat professional-looking website in a matter of days for a few hundred dollars or less. Compared to the $150,000 you might spend with a website development firm, this is quite a bargain.

The one caveat I have to add here is that using a free website builder isn't always the best option. Free website builders are usually limited in terms of functionality and appearance. They're so commonly used that your website will have a hard time standing out and you won't get much in the way of ongoing support unless you pay for it.

Related: The 5 Best Website Builders for Entrepreneurs -- and Which to Use When

The problems with pros

My recommended alternative for using a free website builder is working with a professional website design agency. But this has some potential issues as well.

• Scams: Most professional website designers and developers aren't going to rip you off — but the possibility of web development scams does exist. Some website designers and developers are interested in taking advantage of an undereducated population. They may charge you an egregious amount of money for relatively simple services. Or they may take your money without developing your website at all. You need to be aware that these scams exist. Don't take it for granted that the website design agency is working with your best interests in mind.
• Lack of itemization: Many web design/development agencies break their costs down into a series of line items, but this isn't always the case. If an agency gives you a flat rate of $20,000, you should be skeptical. Where exactly is this $20,000 being allocated? Why is the website so expensive?
• Unclear descriptions: The agency may offer you a series of line items as a description of where the money is going. It is one way of justifying the costs, but it may still be unclear how the money is being used. For example, there might be a line item of $3,500 for quality assurance, but what does this mean? There are legitimate and illegitimate line items, and it's your job to be able to tell the difference.
• High hourly rates/profit margins: You should also keep in mind that some designers and developers intentionally charge high hourly rates or rates with high profit margins. They do this simply because people are going to pay it without much of a second thought. By asking a few simple questions, you can likely tell the difference between a company that's overcharging you and one that's charging a fair rate.

Lack of buyer expertise

Complicating all of these issues is the fact that most people looking to design and develop a website don't have much experience in web design or development. This lack of expertise makes them easy to fool and easy to manipulate. If you don't have much experience in the web development world, you should at least be able to acknowledge this as a personal weakness.

Protecting yourself

Fortunately, there are several strategies you can use to protect yourself and make sure you're not the victim of a web design or development scam.

• Assume your ignorance: First, assume your own ignorance in this subject. Don't just nod along and pretend to understand and agree with the assessments of so-called professionals. If you don't understand something, proactively acknowledge it and look it up.
• Get many quotes (and options): Always get multiple quotes and look at multiple options for web development. If two different agencies are trying to charge you $150,000 or $10,000, respectively, for the same website with the same specs, you'll know one is trying to take advantage of you.
• Do your due diligence: Always do your due diligence. Before signing a contract agreeing to work with someone, take a look at the past work they've done. You'll also want to look at ratings and reviews. Oftentimes, if there are any red flags for this individual or organization, you'll be able to find them easily with a bit of digging.
• Ask lots of questions: Ask lots of questions before, during and after your web development arrangement. If something is left ambiguous, ask for clarification. If something doesn't make sense, push the issue. If your web development partners are unwilling or unable to answer your questions concisely or in a satisfactory way, take it as a red flag. Then look for someone who can and will answer your questions.

The sad truth is, that most people are going to continue spending too much money on launching new websites. They'll spend more money than they have to for an inferior product that doesn't ultimately serve their goals. But you don't have to fall into this crowd. Simply being aware of the problem and doing some extra research is all it takes to protect yourself.

Related: The Basic Building Blocks of a Website, and Their Costs