How much does it cost to build an app? And how can you know if you’re paying the right price for app development? In this article we’re going to cover some of the factors that can drive your cost up or down and talk about realistic expectations for the price tag. Let’s get started.
App Development Cost Breakdown
There are a few different things that can drive the total cost of your app up.
First is the complexity of your app. The crazier you decide to go with your features, the higher the price will be. And while more features means more money, it doesn’t necessarily mean more value for the user. Sometimes, less is more. Keeping your features to a minimum will also mean paying less money and going to market sooner.
Second, come value added services. When you’re working with a software development company, they likely will provide services beside the actual development of your app, for example, design, testing/QA, operations and infrastructure, project management, and communication. When you’re trying to cut costs working with an offshore team, these services and skills make a big difference. So, don’t discount the value your vendor is adding. That value is worth paying for. Speaking from personal experience, these will make your life a lot easier, not only during your initial development process, but later, as your app moves into operations and improvement.
Third, the components and integration. Here we need to look at the architecture of your app. How many front end clients will you need? For example, the code running on your phone vs the one running on the web browser are each different clients. Plus if you decide to build using the native languages of iOS and Android, then you’ll have two clients instead of just one. Or you can keep your costs down by building a single hybrid client that will run on both iOS and Android. How many back-end integrations will be needed? For example, are you going to integrate with a third party like Auth0 to manage all the user data and passwords? Are you going to integrate with a third-party payment gateway like Authorize.net so users can make purchases in the app? And based on the answers the cost of your app development will change.
Fourth, back-end services. How complex is the logic that runs on the server? For example, we had a customer who wanted to create a translation service. The app would not only translate the document, but also return the translated document in the same format in which it was originally submitted. The back-end services that we build to support this were really complex. Most of that complexity was only visible beneath the surface.
With these factors in mind, there are two general ways that you can reduce the cost of app development that you can consider as well. First is looking at geography. Where around the world are the developers located? Are they in foreign labor markets where the price of labor is different from the United States? Our developers are in eastern Europe. We feel like that’s a good mix of value, price, quality, and communication ability. The second way to help reduce the cost is through sweat. How much of your own time and labor are you willing to put into the app? If you already have a set of skills, take UX design in this case, then you won’t need to hire someone to do that because you can do it yourself.
What to Look for in App Development Quotes?
When you talk to different tech companies to develop your app, you will want to know what to look for so that you don’t end up paying more than you need to. Here are some suggestions.
You want to make sure the company is doing their due diligence. Are they asking questions about your app? Are they trying to ingest your vision and really understand it? Or are they slapping you with a quote as soon as they hear a little bit of information? How they react to your app and idea will tell you a lot about the kind of company you are engaging with. You want to work with someone who is genuinely interested in your app and can see its potential.
Another plus is contracting in multiple phases or stages. This means that the overall app development process will be broken up into an initial “mini-project,” followed by another, and then another. The outcome of the first mini-project informs the price or the direction of the second. This process of going from phase to phase and informing the following phase with outcomes from the preceding phase is called “progressive elaboration.” Contracting in phases will make it easier for you and the vendor to agree to fixed price bids. That reduces the risk of unexpected cost increases. Plus if something is going wrong, it’s easier to just finish one phase rather than terminate a large contract and then leave a bloody mess behind.
Going off of the point above, you want to make sure they can show you the roll-up of features and services into the final cost. In other words, you want to make sure that you understand why you are being charged a certain amount.
And lastly, how much of a partner will your vendor be? Are they going to take on an expanded role to suggest and advise? Or are they just taking your order and requiring you to make all the decisions?
What to Look OUT for in App Development Quotes?
There are things you want to look out FOR in the actual quotation. Here are a few red flags:
The first flag is receiving an early quote. Like what I said earlier, you want to know that they understand what they are getting themselves into. If all you have told them is the app idea, what it can do, and some general features of the app and they start giving you a quotation, it’s better not to trust them. They are just trying to close the sale at the risk of underestimating your app effort. You want an app development company that gets curious and treats your app like their own.
The second flag is to look for tricky clauses in contracts and quotations. What I mean by this is that sometimes, they will give you a contract, and somewhere, in size four font, it says that the price they give you is subject to change, without giving any solid reasoning. That is not good. You want a fixed quote. Changing the price should be the very last thing the company does. And if they do need to change the price, the reasons why should be fair and mutually agreeable.
Flag number three has two parts: really low quotes and really high quotes. If they are charging you $20k, they just want you to sign so they can start working. Then, as soon as they encounter a problem with the design or code they will charge you more to fix it. On the other hand, if they are charging you $250k they are treating you as if you were an established SaaS company, instead of the bootstrapping software entrepreneur that you are (which is not a bad thing, we all need to start somewhere). They’re probably including a lot of advanced stuff you don’t need.
The sweet spot you should expect to pay for a well-functioning MVP is anywhere from $50k to $90k.
Here at AppCreative we believe that through apps we can make a difference, and so we say, “Build apps. Change the world.” One important part of that is being able to manage the finances in regards to app development. Now you have some ideas to help you do just that. So go build your app, and help change the world.
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