This should be the first question among all of those who plan to start their software project. It’s critical to understand how much money is needed to invest in the product before taking the first step. In this article, we explain what the key factors that influence the cost of the end product are, we discuss the cost of staffing, how much software agencies charge per hour, and what additional costs you may face. We’ll also share with you our own method on how to prepare the estimates that helps to develop an app without draining the budget.
What does the development cost depend on?
Fact number one — apps are created by tech talents. Different specialists in different parts of the world charge differently for their services — that’s a fact number two.
Talents and teams they make up
• First and foremost, let’s define who make up the development team:
• Project managers, who actually manage the development process;
• UI and UX designers, who work on the way the product will look like;
• Web developers — frontend and backend, who are responsible for the product’s website and, if it’s a web app, its functionalities, databases, CMS, etc.
• iOS and/or Android developers, who actually code the app’s main features;.
• Quality assurance specialists, who test the product at each stage and make sure it’s bug-free.
For every project, it’s crucial to ensure the qualified and relevant tech specialists build the product. Here are the most important qualities to look at while looking for team members:
Industry experience. There’s a famous business quote — “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur”. Different levels of expertise in a particular area or technology often come with different prices. Hiring people without the proper experience can be a big threat to the whole project and a waste of time/money.
Budget constraints. Development companies usually have a wide price range. It’s based on their experience, knowledge of business specifics or technical solutions they provide. Prices also depend on the cooperation model, from the cheapest approach (just tech hands: outstaffing, staff augmentation), to project-based work, and up to supplying tech solutions for specific business cases.
Timeline. Team size, specific team composition, experience — all of these have an impact on the date of the project launch and the development timeline. The personnel doesn’t always have to be located in one company or even on one continent! Some companies (like Bunch Consulting) specialise in combining resources of different tech staff to form the best possible team for a particular project. It’s also crucial to use modern project management software.
The cost of your product also highly depends on the hourly rates of the tech specialists you decide to work with. “The more expensive, the better service” doesn’t always work. The prices worldwide vary a lot, and they often depend on the agency or freelancer location. Here are the average hourly rates across different world regions:
• US and Canada-based companies’ hourly rates are from $50 to $250;
• Australian companies provide their development services for $50 to $150 per hour;
• UK-based and Western European development agencies’ rates are between $90 and $170 per hour;
• Eastern European companies offer their services for $30 to $90 per hour;
• Hourly rates in India vary from $10 to $80.
We live in a global world and work in a global market. The location of the development team doesn’t guarantee the quality of their services. Therefore, the location is not the main issue. It’s more important to check what services an agency provides for what rates and what their clients say about their cooperation.
Types of apps and their timelines
As we now know what the hourly rates among different development companies are, it’s time to talk about how much time it takes to create an app from scratch.
Apps vary by their complexity. The more screens and features an app provides, the bigger the complexity of its logic. Naturally, the complexity increases the time needed to develop an app, as well as its cost.
Apps can be divided into three categories:
• A simple app includes only basic functionalities -. such apps don’t have third-party APIs integrations and may not need a backend infrastructure and network connection. Their features consist of standard UI components, ex.menu, navigation and keyboard. Such apps require approximately 400–1,000 hours to develop.
• Medium complexity apps are the ones that include custom UI features, in-app payments, integration with third-party APIs, real-time chat, tablet adaptation, and a basic backend server. It takes about 1,300 to 1,800 hours to build such an app.
• Complex time-consuming apps are the ones with advanced functionality such as audio/video processing, real-time synchronization, integrations with third-party services, complex backends with several types of database relationships, etc. The rough time frame for creating a complex app is more than 2,000 hours.
As we explained in the previous parts of the article — time is money. However, there is much more to the equation than simple multiplication of hours and hourly rate. Below, we highlight the most important items on a typical “I want to develop an app” to-do list:
Third-party services. You may need to integrate some ready-built features or services. They are useful, as your development team wouldn’t have to build each feature from scratch. However, it’s important to remember that some services are available against a fee or commission (e.g. payments, maps, analytics, etc).
Content management. If you need a user-friendly admin panel to adjust or change the content in your app, you’ll have to choose one of the CMSs. There are lots of those on the market and in some cases, the paid ones are better for your project.
Infrastructure services. These are important for any medium or high complexity app. The costs would include here data storage, servers, CDN (Content Delivery Network).
Hosting and domain. This is another additional payment that you should keep in mind especially when creating web software. The type and size of a server should match your traffic and services. The domain can also be a tricky one — sometimes it’s important to be creative with branding not to overpay for it.
Development tools and libraries used. Some features require special tools to simplify and speed up the development and you’ll need to pay for some of them.
How to prepare a rough estimate for the project?
We now have a lot of information about the factors development cost depends on. Though, how does one transform all that info into an estimate? According to a “simple-to-complex” basis, we start with a rough estimate and then discuss the details and peculiarities to provide a more accurate quote. A preliminary estimate is not a final quote, that’s just an approximate cost within a range of required functionality. Let’s see how we work on that at Bunch Consulting.
First of all, we estimate the minimum and the maximum number of hours needed to implement the required features in your product. It’s important to see that range, even if it’s a wide one, as here we start the negotiation.
Negotiation is important as we discuss the business goals of your product and your expectations of how it should work. By understanding your business goals, we can offer the best solutions for the development and build up a perfect team for you.
When estimating complex projects, we also suggest different tech solutions.. Sometimes, new technology is necessary to achieve the best results. We also check if it’s more reasonable to engage high-quality niche specialist or to estimate the time it would take to research this technology implementation.
To make sure that we can achieve the business goals and stay within the time and budget constraints, we also propose the most effective ways for each project. Sometimes, it’s better to start with an MVP or focus on a few key features rather than try to implement many complex functionalities. It’s important to discuss requirements and tweaks at the very beginning, so that we stay on the same page with the client.
Sometimes, a rough estimate doesn’t fit the client’s expectations and that’s okay. In fact, a preliminary estimate is a great start for discussing the project and opportunities that we see in our collaboration. Each estimate is made individually for each project, so we always do our best to find the best solution for your project and business needs.
It’s time to sum up. The cost of app development depends on many factors. The complexity of the software is extremely important. The tech team that is needed to build the product is key for the estimate as well as and their hourly rates that depend on the specialists’ experience and location. Additionally, there might be extra costs depending on the type of app you need and the tech solutions required for it. It’s easy to get lost between all of the numbers and factors. That’s why we always prepare a rough estimate for the project and explain how much it costs to implement different tech solutions.
At Bunch Consulting, we strive to help our clients understand how the IT market works. We build a professional team that delivers the project within the timeline and budget. Reach out to us at firstname.lastname@example.org if you’d like to develop an app and we’ll gladly prepare a rough estimate for you.