“How much does app development cost?”

This is a question we often get asked by small-to-medium businesses (SMB) who are dipping their toe into software development, in an attempt to create a competitive advantage in the market, or simply just keep up with trends.

The growth of app development for small businesses has been rapid in recent years, especially when it comes to mobile apps. According to a study conducted by ComScore  ‘mobile minutes spent online’ significantly surpass those spent on desktop in a large portion of developed countries around the world:

ComScore's mobile minutes spent online Screenshoot

This trend towards a more mobile and technology driven society creates new expectations for business. It also provides great opportunity.

People expect your business to be available beyond the typical 9-to-5 office hours. They want information, and they want that information immediately with the comfort and ease of a few clicks on a smartphone or web browser.

So whether your business wants to develop a new customer-facing smartphone application, a piece of enterprise integration software, or a custom web application, the benefits of apps for SMBs are undeniable.

But is it achievable with a modest budget?

As little as 10 or 20 years ago, app development was incredibly expensive. Most SMBs could not afford to hire internal developers or outsource app development to an agency in order to create something of value.

But all of this has changed. Today, modern technology and development techniques have made app development more affordable than ever for SMB’s.

In this article, we will examine the process of app development for small-to-medium sized businesses. We’ll discuss the typical costs of a project – and where that money goes – as well as the steps you can take to reduce your costs and ensure that your app gets off the ground on time and within budget.

Why Should You Consider Developing An App?

Building a custom application for your business can have a wide variety of benefits.

Let’s have a look at a few of the primary reasons you should consider developing an app:

  • You own the software. When you develop a custom application, it becomes your property in a way that you can gain an edge that no other competitor has, and they’d have to develop their own application in order to catch up.
  • You don’t have to rely on a third-party software vendor for support – or worry about your software vendor going out of business, and losing the ability to use your software.
  • It can be tailor-made to your needs. You don’t have to use a piece of off-the-shelf software – instead, you can custom-build a specialized application that’s more efficient and powerful than any other third-party software.
  • It can help you change the way you do business. Whether you develop a mobile application that lets customers shop from their phones, or a business intelligence application that helps you gain valuable insights, the right application can totally revolutionize your company.

So then, now to the real question on your mind...

How Much Will App Development Cost?

The cost of an app can vary dramatically depending on features, timeframe, and the expected development platform. But if you want just a general, ballpark estimate, you’re probably looking at a cost of anywhere between $20,000 and $200,000.

Ok that is a pretty broad price range. So what factors affect the actual cost of developing an app?

Let’s break it down:

  • Market Research and Validation Costs – Market research is absolutely critical for a successful app. You have to understand what your competitors are doing, and ensure that the app you’re developing has a clear purpose and audience, and will deliver a solid ROI for your business. You also want to make sure that the potential users of your app are actively seeking a solution to the problem your app solves.
  • Planning/Roadmapping Costs – Planning and roadmapping a new application is basically a full-time job, usually performed by a project manager. The planning and roadmapping process will likely take several weeks or even months, and your project will need to be managed closely to ensure it’s on schedule.

Example Project Plan Template

  • Type Of App (Mobile, Web, Desktop, Etc.) – A major factor affecting the price of an app is the type of app you want to develop. A simple, AngularJS web-based application may cost as little as $20,000-$35,000 – but a fully-featured mobile application that requires many additional features will require a much higher budget.
  • App Platform (Development Language and Frameworks) – The particular app platform you choose to use for development will be a huge factor in the cost. For example, a desktop application programmed in C++ is going to be more complex than a web application built on JavaScript. If you want to lower the costs of development, the best approach is to build your app on an already established framework, which reduces the development complexity and increases your speed to market.
  • Design Costs – Development can’t even begin until you’ve designed your app. Whether you’re using in-house or outsourced UI/UX designers, this must be factored into the cost of developing your app.
  • Development/Engineering Costs – This is where most of your budget will go. You’re going to be paying developers to develop your actual app, and the standard development cycle can range from just a few weeks to several months.
  • Data Integration Complexity and Costs – Data integration can be incredibly complex, especially if you’re creating a custom app that connects to multiple databases or pieces of software. You may need a specialized consultant to help with data integration – and this can be pricey.
  • Data Storage and Management Costs – Your new application will need its own infrastructure. Whether it shares virtual server space with another application, or is run on its own dedicated infrastructure, these costs should be factored into your development plan.
  • Data Security Costs – You must budget for security audits when developing a new piece of software. Security breaches can be incredibly costly – IBM estimates  that the cost of a data breach is $144 per lost record – so factor security costs into your initial plan.
  • Costs of Deployment/Training – Deploying the new application and training personnel will have related staffing costs. So consider these as well.

As you can see, there are a number of different costs you need to consider when developing your own app. The best approach is to start with research, validation and planning. That way, you can be confident that you know exactly what you need to build, how you will build it, and estimate more accurately how much it is going to cost.

In-House Vs. Outsourced Development

This is a common question that SMB executives have about app development. While in-house development is great for larger companies, the costs associated with in-house development usually make it unfeasible for SMBs.

According to Indeed , the average developer salaries range from $70,000 per year for a Web Developer, to over $110,000 per year for a Senior Software Engineer.

Indeed's average developer Salaries Range Screenshot

And that is just for one person. It’s very likely that you will need multiple developers, as well as other skilled employees in design and project management, to successfully execute on your app development project. Those staffing costs add up.

Hiring an internal development team can also pose other risks. For example, depending on their experience, they may have limited exposure to the framework, or complex data integration required for your unique application. Often you won’t find this out until it’s too late, and you may need to start from scratch again.

For these reasons, most SMBs turn to outsourced developers in order to build custom business applications. The primary benefit of hiring an outsourced solution, is that you can field proposals from multiple development teams, assess their previous work, and truly pick the most appropriate partner. Of course, development agencies come with their quirks, but for an SMB looking to minimize risk and reduce cost, this approach seems to be the most appropriate.

Regardless of whether you keep things in-house, or work with an external agency, there are several things you can do to keep costs under control.

How Can You Reduce Costs of App Development?

If you’re interested in reducing the costs associated with your project, here are a few ways you can do so.

  • Hire an Experienced Development Partner – When selecting an outsourced or in-house development partner, this is critical. An experienced, professional development team will help you create a realistic budget and timeframe – and they’ll be able to quickly overcome any unexpected project hurdles. Speak to their previous clients or employers, check out their work, and do your due diligence to ensure you pick the right option.
  • Create a Strict Project Timeline – Scope creep and timeline creep can be incredibly costly during an app development project. Work with your development partner to create a strict, comprehensive project timeline, and you’ll be able to minimize the costs associated with these problems.
  • Build with an Established Framework and Language – When developing an app for your SMB, it’s best to start with an established development framework, and a well-known software language. Many businesses have similar needs – so usually, your development partner will be able to recommend a framework that satisfies many of your needs ‘out-of-the-box’ – dramatically reducing development time and cost.
  • Use an MVP (Minimum Viable Product) Strategy – Using an MVP strategy, you can reduce development times by streamlining your application. By building your app with only its most important features, so you can get fast feedback from users, it’s easy to cut costs – and you can always add more advanced features later on, after the initial product has been released and validated. Eric Ries discusses this concept in his book The Lean Startup, “The first step is figuring out the problem that needs to be solved and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible. Once the MVP is established, a startup can work on tuning the engine.This will involve measurement and learning and must include actionable metrics.” Here is a high-level visual of the process he is describing:

MVP (Minimum Viable Product) Strategy Graphic

  • Utilize Cross-Platform Development – SMBs usually can’t afford to create two different apps for different software ecosystems. The cost of developing an individual app for separate operating systems is simply too high. So consider investing in a project using cross-platform development. This will allow you to maximize your ROI, and ensure that you don’t waste money creating the same application twice.

With these simple tips, it’s easy to reduce the costs of SMB app development, and ensure that you maximize your investment – and minimize waste.

A Final Word

Despite the relatively high cost of developing an app for your small business, it’s well worth the investment.

If you choose the right development partner, follow these best practices, and understand where to spend your money  when developing your application - you’re sure to succeed.

Want to learn more? We specialize in app development for SMBs, offer reasonable rates, and years of software development experience. Get in touch today to talk about your app development project.

About Andrew Rachunok

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