How much does it cost to develop an app?

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First things first: what kind of app do you need?

If your idea is “the next Facebook”, and you want to start from scratch, its development will take long months and quite a budget. And success is likely only possible if that development is carried out by an experienced team, with clearly defined business goals and stakeholders who have a clear vision of what they want to achieve. Moreover: it can be more expensive than initially estimated; only very rarely is it less expensive.

However: everything is relative. If you need a simple ecommerce website for your small store, you can also do it without spending a fortune. How? There are solutions that offer out-of-the-box products that can be easily adapted for most businesses for no more than $100 per month, depending on the features. There’s actually no need for any development at all in this case, because such platforms tend to offer a good level of technical support and can guide their customers through installation and maintenance.

This table shows how versatile the market for out-of-the-box platforms is. If your needs can’t be fulfilled using one of the above mentioned solutions, then it would be smart to look for something custom-made.

Similarly, if you want to create a webpage for a magazine, community website or personal webpage, you can do really great stuff with a budget as low as $100, or less. There are plenty of platforms like WordPress that offer a decent quality and great value for this kind of budget. You can start a business website for €25, and this price already includes server space and 24/7 support. Again - in this case you don’t need any development team.

But if you can’t do it using the methods mentioned, then you may need help from a software development company. So, let’s start from the beginning.

Do you have a budget?

Let’s kick off with some harsh but realistic statements: if you don’t have a budget or have no idea how to find the funds, it’s very unlikely that you will be able to create an application or a more complex and visually interesting website.

Maybe you have secured funds but they are not enough to develop your digital product? Don’t worry - from a business perspective it’s still worth working on the idea, maybe with slightly different assumptions. Sometimes it’s better to start humble than lose funds trying to do something unexecutable in the longer perspective. In such cases, you can spend the budget in a slightly different way - for example by creating a digital prototype that can be used to pitch investors for a more appropriate budget for further development.

So, the first step of building a digital product is always securing funds. And if you’ve already done that, you’re probably asking: why is this so costly?

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Why is software development expensive?

The answer is quite obvious: software engineers are among the best paid specialists on the job market. Furthermore, software development is a team sport - to create a meaningful, efficient, beautiful and user-friendly product, you need other experts as well: UX/UI designers, devops engineers, quality assurance specialists (QA), business analysts, copywriters. Not all of them will need to be involved during the entire development process, but each is significant at some stage in the process.

What influences developers’ salary the most? Surprisingly for some, not the technology they specialize in, but their experience. Every product owner would like to have senior software developers with 10 years of experience working on their digital product. The reality is less optimistic - there are not enough great senior developers for each product! Most digital products are made by developers with significant-but-medium experience being led by some excellent, experienced colleagues. Also junior developers have to learn their craft somewhere, and as long as they can do it under the eye of real experts, it’s done without any harm to the product.

Just to summarize this topic: software development is expensive because it’s based on a very specific knowledge and skill set, and the developer’s experience.

What else influences app development cost?

For a start, **the methodologies and frameworks used by the software development company! Even if a company invests heavily in amazingly skilled and experienced engineers, their work can be ineffective if they use an obsolete methodology, like waterfall.

A methodology aligned with a framework should help to create software according to efficient processes. The right methodology influences the way developers approach software development, helps to set positive work standards, and find practical solutions to the most common issues. Here at Boldare, we work according to Agile principles and the Scrum framework. Why do we prefer this set of methodologies? Because they help to cut software development costs for our customers by providing applications better suited to users’ needs, faster.

Need more evidence? Choosing an agile framework (like Scrum) can give you more certainty about finishing the product as planned. Agile has a higher project success rate in comparison to waterfall. Only 9% of agile projects fail. This number is significantly higher in waterfall, at 29%.

How does the methodology influence the app development cost? The employees of a company have to learn how to work with it, so the organization needs to invest heavily in training for employees and hire experts, like agile coaches and scrum masters who guide development teams in building the software. This means that choosing an agile-powered company to build your product might be more expensive. Yet - it can save your project from long delays or a complete fiasco caused by unsound methodology.

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Also: I can’t stress enough how communication is important, yet very often it’s treated dismissively. Poor communication lengthens processes, negatively influences decision making and creates conflicts. If you look for a good partner, pay attention to their communication style: responsiveness (including how quickly they answer your questions), transparency (can you access all team members and task management software?) and style (do they treat you as a partner, or like a younger colleague?). Good communication helps to work seamlessly and prevents costly delays.

Companies that are investing not only in experienced employees, but also into knowing how to work and communicate better are less likely to miss deadlines or interrupt the process because of the internal issues. the approach pays off with better results.

What are the hidden costs of software development?

The shortest, yet entirely accurate answer is: it’s the knowledge you don’t have. The more information you miss in your plan, and the more the product development company needs to research or provide, the more they need to invest their time. Among many other quite obvious things, such as software developers’ salaries, profit margin, office costs, etc., there’s quite a big group of software development costs that are somehow “hidden” (in most cases not with bad intent!). Let me name some of them:

• Knowledge about the market and target persons. If you don’t know too much about it, the company will have to spend their time doing research.
• Ability and skills in building proper user tests and validating business hypotheses.
• Setting up the infrastructure for the app. At Boldare, we usually suggest matching infrastructure to business goals - a simple infrastructure may be all that’s necessary for an MVP app used only to validate business hypotheses quickly. You can develop something more complex later, as necessary. Greater complexity generates more cost because it’s necessary to prepare the infrastructure for a wider range of events and scenarios.
• Vendor lock-in – Some development companies would rather have you dependent on them for your app’s ongoing operation and build that into the development contract. Thus, while making a shortlist of potential partners, make sure to check if the company is trying to insist on you using their services after the application has been released to market. Also, find out if you have access to the source code and all the materials during the whole development process. If not, this might be a signal that your contractor will play unfair.
• Support & maintenance – Any software or digital product needs continuous supervision and maintenance if it’s to continue functioning as designed. Sometimes, it’s covered by the company who’s ordering the app, sometimes it’s provided by the development company. It’s up to the stakeholder plan.
• Marketing – You have your app and it’s both beautiful and efficient, but how do you bring it to your target users’ attention? Advertising? A dedicated landing page? A marketing campaign targeting its users? And if you want your product to feature in the Apple Store, Google Play, or Amazon, be prepared to pay a fee.
• Extra services - if you plan to fill your amazing website with great copy and catchy calls to action, remember that it’s not really the web developer’s responsibility. This has to be done by other experts - copywriters or UX/UI designers - who are sometimes not included in the development team.
• Last but not least - subscriptions, licenses, and other ‘function-related’ costs, such as photos, graphic designs, etc. Depending on your app’s features and functions (and how they are implemented) you may need to pay a fee or subscription for usage (e.g. for SMS or push notifications, or to access particular SDKs or libraries).

Each of these points influences the final app development costs in various ways.

How much does it cost to develop an app at Boldare?

As mentioned, it’s really difficult to say how much it will cost to develop the digital product you need, without a complex interview and research. Building a digital product that is aligned with your business goals requires more than just linking a bunch of features together. Thus, I would be very careful with using some online cost calculators that focus on selecting features and technologies, like adding items to a basket in some kind of online store.

From our perspective, and this is what we always try to highlight to every of our customers, the vision and business goal are crucial for every app and more important than any list of features that you might already have in mind. If you don’t know what the business goals are for your product, don’t worry, we have tools that can help you firm things up - not least the Product Discovery Workshop or Product Vision Workshop.

If you want to know average cost to develop an app, and want to have an overview of our process, use our app costs calculator - it’s a simple, 5-question test.

Please, bear in mind that the tool only shows approximate costs. You can obviously contact us for a more accurate estimate for your product, if you’re OK with the budget range.

How do we estimate the costs of app development?

Who decides that your new mobile application, SaaS website or a new feature added to an existing one, will cost $60k and not $5k? And how? There are various approaches to this topic and each company does it slightly differently. We usually create estimates for our clients twice. First at the beginning of the process, after so-called needs analysis research, to see if there’s common ground when it comes to budget size.

The second time is a result of the product discovery workshops, when we gather and explore the business goals and other requirements in more detail. Sometimes, if the client has trouble giving us the necessary details during needs analysis, we suggest starting the collaboration with the product workshops, before we propose a price range.

How accurate are our estimations? Well, it depends - the more we know about business goals of our partner, the more clarity we have and the more accurate the initial cost calculations. The graph below shows how the accuracy grows with the amount of information we have about the product.

Our estimations are made by frontend and backend developers who have appropriate experience in working with similar products. They start their work by getting as much information about the product as they can get, and this is one of the main goals of the Needs analysis research. All information is helpful, and even at this stage we try to figure out if we are talking about a prototype, MVP or other type of product. It’s important, because we choose different solutions for different kinds of products.

The next step is to divide each feature described by the client into smaller parts, down to the smallest possible piece. Next, going through all the listed features, each part or element of the application is costed. This way, all of the dependencies and connections between features are clear and it’s easier to spot potential issues. Finally, the time required is summarized, and this overall is the basis of our costs proposal.

We don’t choose any particular technology at this point of the process, unless it’s justified somehow.

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How does the choice of technology influence software development costs?

Some companies will vary their prices depending on the technology they (or you) would like to use in the product. At first sight, this seems quite reasonable - various technologies should be priced in various ways. But in reality, differences between the salaries (and this is the most important factor when it comes to software development prices) of a web developer and a mobile developer can be quite vague, and what really influences their salaries is their seniority.

At Boldare, we don’t focus on any particular technology at the early stages of cost estimation, because it rarely impacts the price of the product. Of course, some types of products are possible to create without using particular technologies, and mobile applications will be built with a slightly different team to that needed for desktop software.

Instead, we would rather focus on solving business problems than on the means necessary for the process. When there’s such a need we can, obviously, suggest the best technology for a particular product. For example, mobile apps are usually created with React Native while a web based e-commerce platform can be developed using PHP.

Additionally, we can adjust the proposed solution to your business goals. If one of the main requirements of the stakeholders is quick time to market, we usually suggest building the application with pre-built components and out-of-the-box solutions to save time. On the other hand, If we know that the product already exists and will be continually developed for many years (in case of scaling for example) we can suggest an architecture based on microservices or DDD (Domain-Driven Design). To make such a decision we need to know more about the product, its vision and business goals.

So, how much would it cost to create an app with us?

What are the factors influencing the cost of software development in the US, Europe and Asia?

If you already know the budget range, you can start looking for a contractor. For many reasons, mainly economical, many decision makers decide to look for a partner abroad. Different economies equals different costs - that’s the reason. The conditions of the software development market in each country will differ and so will the prices. The base factors are:

• Cost of living
• Level of education and qualification of developers
• Infrastructure quality and security.

Of these, maybe the most basic determinant of rates and salaries for developers is the local cost of living, as measured by the Consumer Price Index, or CPI. In the following comparison of three very different countries known for software development, we can see that developer salaries broadly follow the CPI:

This explains a lot in terms of why many European or North American companies are looking for a software development company in India, or another country with a lower CPI indicator. The differences are even more visible if we dive into the details of average software development salaries by region:

• The average software developer salary – Tells you how this skill set is valued in each region. (Source: Glassdoor)
• The average hourly rate for a software development company – A key component of the overall cost of the services provided. (Source: Clutch.co; taken as the average of the top five ranked software development companies from the Clutch regional listings)
• The average minimum project size in terms of cost – (Source: Clutch.co; as above)

While price often broadly reflects quality, it should be apparent by now that there are many other factors involved. Put simply, there are probably some companies in India that will do an excellent job, and it’s perfectly possible to find unprofessional companies in the US or Western Europe. However, collaboration with a company from Asia brings some risks, such as different approaches to work culture, poor knowledge of software development methodologies, infrastructure issues, or lack of control over product development.

Should you hire a freelancer instead of a software development company?

Sometimes it’s better to hire a freelancer, instead of looking for a software development company. When is it better to look for an independent expert?

• If your budget is too small to hire more than one software developer,
• When you don’t need a team of experienced developers, product designers and QAs. In other words, if your product is very simple - it’s a straightforward one-page website or it can be built using out-of-the-box solutions,
• If the work that has to be done can be done in 2-3 days by a single person,
• If you need someone to simply write code, and you don’t need any business-related support,
• if you can provide a continuity to the process and support the development process, when somebody calls a sick day, or wants to go for a 3-week holiday.

How much does it cost to hire a freelance app developer?

The basic costs can certainly be attractive:

But while the price tag might look good, and working with an individual can be a flexible experience, there are other factors to take into account:

• Yours is not the only project they are working on – a company can give you a team dedicated solely to the development of your app; a freelancer usually cannot promise the same focus and oftenly they are working on two or more projects at the same time.
• Limited expertise – a freelancer may be the world’s best developer, but how are they on UI or UX design? Or quality assurance? Or business analysis? Will they review their own code? How secure is it?
• Lone wolf – the other downside of dealing with a small operation is that unrelated setbacks (e.g. sickness) can stall your project; a larger company has the resources to fill such gaps seamlessly.
• Quality verification - it can be really difficult to check a freelancer’s experience and skills, especially if you’re not ‘fluent’ in the technology yourself.

Working with a freelancer will definitely be the best choice in some conditions, especially with smaller and simpler products. But for most digital products, it brings so many risks on so many levels that the results risk being disastrous.

Conclusions

Let’s try to summarize the article briefly:

• Business goals for the app are everything - make sure yours are clear and executable. Build the product around them, not around your opinions.
• Software development is expensive and its cost depends on dozens of factors - not only developers’ salaries.
• Software development methodology and frameworks are crucial. Agile and scrum are practical and effective.
• If your budget is rather frugal, try to look for out-of-the-box solutions that don’t involve any development. Alternatively, invest in a digital prototype and look for investors.
• The less you know about the product you want to build, the more you will pay for it. Look for a partner who will help you to discover the missing pieces together.
• Technology matters, but mostly when it comes to the practical aspects of development. It shouldn’t overly influence the cost of your digital product.
• Don’t think about your app as a jigsaw puzzle with various features as pieces to be put together. Instead, it’s like building with a particular purpose, that needs proper materials, solid foundations and… a corresponding budget.

If you still have questions about your app development cost - let us know!