How to Build an SEO Budget Without Losing Your Mind

Types of SEO budgets:

Before drafting any proposal, we recommend qualifying incoming requests first. Do you think the lead is genuinely interested and worth pursuing? If so, treat them well from minute one. And make sure they notice. In other words, don't settle for a generic reply: request a meeting to discuss the brief. This signals maximum interest, and if you land the meeting you'll have the chance to demonstrate your professionalism even before a contract is on the table.

Once you've assessed the situation, confirmed it's profitable, sent a proposal, the client has approved it, and both parties are interested, you'll need to decide which type of SEO budget is best suited to the case:

Fixed-price SEO budgets

These are proposals where the client accepts the total cost presented for carrying out your plan. The document will spell out key details such as the total cost of each action tied to the strategy.

This format partly shields both parties from blame when unforeseen factors come into play. Example: you put forward an initial strategy at cost "X" based on a competitor analysis and in line with Google's current algorithms. If new competitors enter the picture during execution or algorithm changes occur, the strategy can be adjusted, yes, but without being obligated to carry out extra work that wasn't included in the contract at zero cost.

It's true that this option helps with better upfront planning, since you know from the start what and how many resources you'll need. That said, the client will also want to know at all times where their money is going. In this scenario, you'll almost certainly feel more closely monitored, sometimes having to provide more justifications than necessary.

Open or variable SEO budgets

With open SEO budgets, although there is a fixed price the client pays regularly, a portion of the payment is variable depending on how the project is performing. That budget line can be reserved, for example, for an extra bonus if you exceed the initial goals by "X"%.

In this case, commitment is clearly much higher, because you're the first one who wants everything to go well from the outset. However, there are external factors beyond your control that can prevent targets from being met. In short, if the numbers don't add up clearly, this option could become too risky.

Hourly SEO budgets

While in the first case we had a fixed price for specific actions and in the second a retainer plus a bonus, in this third case we have a per-hour SEO rate. This option is also very attractive when working on SEO consulting projects or when the client needs certain actions where it's hard to know exactly how long they'll take. This type of contract is very common at the high end of SEO (consulting), since the price is usually considerably higher than in the other two cases.

Examples include SEO consulting for large companies, SEO training sessions, and so on.

Which is better: monthly retainer or SEO campaign budget?

With a monthly retainer, the client pays a previously agreed amount in installments for the work performed. Like everything, it has its pros and cons.

On the upside: it's more comfortable for the client, since it lets them spread the payment out. However, if there are no prior clauses requiring a larger payment at the start of the project, you expose yourself to an unpleasant situation: the contract gets terminated early and you end up losing money.

Let me explain: how many times do you end up putting in more hours than agreed when you start a new project to make sure it moves forward properly? Often, right? Well, be careful, because if you don't factor that extra effort into your SEO budget and add it on top of the monthly retainer, if the client drops you earlier than agreed, you can end up losing money.

With SEO campaigns, the difference is that here you need to charge a larger upfront fee that covers those extra initial costs (like the ones mentioned above). Once this payment is accepted, protecting you from potential payment suspensions, you can set a regular fee afterwards until the campaign wraps up (monthly, bi-monthly, or however you prefer).

What else should you keep in mind when finalizing your rates as an SEO?

• ›Calculate the costs of your SEO budget carefully

A very common mistake among SEO consultants who are starting to offer consulting services is failing to factor in the costs associated with running the business. It sounds obvious, but often, when preparing proposals, if we set a lower price by considering only our hours, we can end up losing money.

What about the SEO tools you'll need, electricity, internet, computer wear and tear? All of these fixed and variable costs have to be partly built into the price so you can grow sustainably and steadily over time.

• ›Assess the project's level of difficulty and, based on that, decide whether it's more profitable to put a junior or senior SEO consultant at the helm.
• ›Automate execution processes whenever you can. In other words, invest in technology that helps minimize the time usually required to carry out any given task.

Practical SEO budget example

To put everything we've covered into practice, let's look at the following example:

• ›CASE A (company looking for an SEO provider): Imagine an SEO retainer of €250, as many companies offer. (Top rankings for €250). Doubtful, right? Assuming the SEO consultant's rate is €25/hour, they can dedicate 10 hours a month, which is 2.5 hours per week. Factoring in the cost of electricity, internet, and SEO tools, the profit would be zero or even negative. That's why when you see a company offering all-inclusive SEO services and top rankings for €100 a month or similar, be suspicious!
• ›CASE B (SEO consultant submitting an SEO proposal): If a client hires you for 40h/month and you want to charge €20/hour, the easy assumption is that the price will be €800/month, right? WRONG! On top of that, you need to add the associated SEO tool costs, the proportional share of overheads to be able to work, the proportional share of self-employment contributions, income tax... The monthly fee will probably land around €1,250. With that, you'll have some margin to keep growing as a professional and not work just to cover expenses.

That's all for now. What did you think? Would you add more suggestions you consider essential when planning an SEO budget? Let us know! We'd love to hear your take!