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How to Price Your Project When Shopping Around For Developers

Do you have an app project in mind? If you don’t have an internal team at your disposal to work on it, you’ll need to shop around for developers.

While you’re shopping and getting quotes, you’ll likely encounter some that seem really cheap, while others seem super expensive. Is one price gouging you? Is the other one even qualified to work on your project?

You need a way to find a happy medium between the two.

There are other factors to consider as well. Should you hire a developer? Agency? Find a partner? Where do you begin pricing out your app development project?

If you’re lost, you’ve come to the right place. I’ll teach you different techniques, tips, and best practices to use while shopping around for developers.

 

What You Need For a Development Project

You’ve decided you want to build an app, and you’re looking for a developer. So you start to look around for different options.

You might consider using Upwork to find a developer and just send your idea off to them. Or maybe you’re looking for an agency, but you’re unsure if it’s worth the extra cost. You could be looking for a partner or a potential pre-existing solution. What’s the right fit for your app and development project?

The first thing that you need to understand is this; when you’re shopping around for a developer, that’s all you’re getting—a developer.

Do you need anything else besides a developer? Generally speaking, yes.

You’ll need a designer to design the app. You need a QA engineer to test if the app is working properly. Someone has to be the project manager as well to ensure that everyone is hitting their deadlines, whether that’s you or someone else.

So at the end of the day, you need a team to work on your project—not just one developer.

Without the right team in place, the quality of the solution and the quality of the final product will ultimately suffer. If you just hire a developer, this is not their fault. This person isn’t a designer or a QA engineer.

Here’s an analogy to explain what I mean.

Let’s say you’re building a house. But you only hire a painter. Then you’re upset that the kitchen wasn’t built properly and the plumbing has problems. Whose fault is that? You just hired a painter. You need a carpenter and plumber to handle those other jobs.

For app development, you must understand that there are multiple dimensions to your project, and each dimension needs to be satisfied.

Should You Hire an App Development Agency?

Agencies might seem like an appealing solution because they should provide you with a comprehensive team. From developers to QA, designers, and project management, an agency will have it all.

However, agencies are in the business of selling you man hours. Agencies sell time, so they’re going to give you lots of billable hours.

An agency will do exactly what you tell them to do. However, they may not challenge you the same way that a partner would.

Sometimes a partner looks like an agency, but they bring more consultancy into the mix.

While an agency can generally be compared to a contractor, a partner is more like a consultant. They come in and challenge your business model. Partners will give you suggestions on how to do things better, even if it’s less work for them.

That’s because a partner is invested in a long-term relationship with you. They want your company to grow so your relationship can last longer.

Fundamentally, that’s what you should be looking for when you’re shopping around. Whether it’s from an agency, a developer, or a partner, you want someone who can be more of a consultant to you.

I’ve been on both sides of this equation.

Earlier in my career, I was shopping around for developers to work on some of the projects I had. Right now, I have customers coming to my businesses asking me to develop their apps, and I need to justify my own value.

The truth of the matter is this—the common mistake that everyone makes is they just look at dollar amounts. I know this sounds difficult, but you need to look past that.

Obviously, money is the most important thing on your mind. It’s tangible, and it’s really the only metric you have to measure and compare between companies.

But let me give you another analogy to explain why you need to look past the dollar figures.

Let’s say you are comparing two vehicles. One is $5k, and the other costs $50k.

The first might get you around for six months or a year before it breaks down. But if that’s all you need, there’s nothing wrong with that. The $50k car would be overkill if you just needed a beater car for a few months.

But the more expensive car might be hybrid or fully electric. It could save you money on things like gas, maintenance, and time. Plus, there is the opportunity cost saved for every time the old car would have broken down. If your car breaks down on the way to work, you can’t get paid for the day.

When it’s all said and done, the $50k car could actually save you money in the long run.

I’m not saying one is right and one is wrong. I’m saying you need to assess what’s right for you based on your unique situation. This goes beyond the price tag.

5 Techniques to Use When Shopping Around For Developers

Now that we’ve covered some of the basics and preliminary information, I’m going to show you some actionable techniques to use while you’re shopping around.

Whether you’re dealing with agencies, developers, or potential partners, these tips will help you make the best decision for your project.

Technique #1 — Get a Quote That’s Broken Down by Line Items

Your quotes don’t need to be super detailed, but each quote should explain how the developer or agency arrived at their price. The best way to do this is with a quote that’s broken down line item by line item.

If you ask someone how much your project would cost and they say $100k, wouldn’t you be a little puzzled? That’s a very round number. $100k exactly? Not $97k or $102k? I’m sure you’d like to know how they got there.

The idea here is to make them justify the price.

If they can’t justify it, they are likely just shooting from the hips to see what sticks. They are trying to price anchor you. Here’s an example of a quote with line items.

When a quote is justified by line items, you still need to be fair. If you’re not fair with the agency’s justification of the price, it’s going to be difficult for you to find the right value. What do I mean by this? Allow me to explain using an analogy.

Let’s say you ask me to make you an omelet.

To make this omelet, you’re paying for my time, the pan I need to fry the eggs, the stove, some oil or butter, and the eggs. Simple, right?

While I’m cooking, you ask me to add bacon. The incremental cost of adding bacon is very minimal. There is some added cost for the goods and additional labor. But incrementally, it’s nothing compared to the entire piece. Then maybe you ask for cheese or something else. At each incremental step, there’s an additional cost incurred, but it’s minimal.

Now let’s say you ask me for two eggs alone, bacon alone, and grilled cheese alone. These are three individual projects that require their own setup time, separate pans, different stove burners, and an oven. You can’t compare the price for adding bacon to an omelet to a dish of bacon on its own—that’s not how it works. Bacon alone will obviously be more expensive.

There is a certain amount of setup time that will be incurred for every project, and everything above that is incremental.

So be fair to the partner, agency, or developer that you’re talking to when they break down prices “à la carte.” Understand the difference between the incremental costs of adding a feature to an existing project vs. treating every feature as a separate project.

The other thing you need to understand is scale.

Back to the omelete analogy. Let’s say you ask me to make an omelet for you, your wife, and two kids. I already have everything out. I can add a few more eggs, more bacon, more cheese, and easily feed all four people.

But what about two families? I could use all four burners on the stove, with four pans going at once. No problem.

How about ten families? I can do it, but people will probably have to wait. Not everything will be ready at once. Some people might have hot food while other people might have cold food.

What about 1,000 families? 10,000 families?

As you can see, you’ll face different problems logistically at scale.

It’s no longer a question of how many eggs we need or how many pans are going. One person can’t manage all of this on their own. Customers will be waiting, and a backlog of orders will be coming in. These are bigger problems logistically.

So when you get a proposed solution from a developer, partner, or agency, make sure that it fits the context at the scale you’re looking for.

You don’t want a hypothetical scale. If you aim to small you could outgrow your project in a few months after the launch. You want to make sure the project has a shelf life that will last so you can reap the benefits and reinvest.

Technique #2 — Compare Quotes Side by Side

After you get quotes from multiple people, it’s important for you to compare each one side by side.

Look at each line item individually on every quote, so you’re comparing apples to apples.

Figure out if an estimate is able to scale with your business. Factor in any ancillary services that need to be added.

For example, you’ll need to factor in hosting costs for your backend data. There are push notification servers, analytics servers, servers for user notifications, and user authentication.

All of these services will be added on top and may not be included in your initial quote.

Remember, whenever you’re talking to an agency or a developer, they have the tendency to quote out only what you asked for—not what you need.

Technically, they’re not necessarily at fault for this because the quote includes everything you asked them to do. But once you’re neck-deep involved in development, how will you react when you need more stuff? I’m sure you won’t back out of the project; you’ll keep investing.

That’s why a partner is a better solution for the long run.

Partners will help you determine what’s missing in your initial ask from the beginning. That way, there won’t be as many surprises down the road.

Technique #3 — Be Methodical When Comparing Line Items

Make sure that you’re very methodical in how you compare line items together. What do I mean by this? Allow me to explain.

You received multiple quotes from different developers or agencies. Everything is broken down exactly how you asked. You’re comparing everything line item by line item. Are you with me so far?

Now, you need to put a weighted value on every feature that’s critical to your business. This will allow you to make a data-driven decision as opposed to an emotionally driven decision.

For example, one salesman might have been a bit more charismatic than the other. But that’s no reason to choose an agency; you’re letting your emotions get in the way and cloud your judgment.

Make a simple 0-5 scale for different categories like:

  • Longevity
  • Time to market
  • Number of features

Just find any way to have weighted values for everything that matters surrounding the launch and completion of your project. Only then can you be more data-driven with your decision and not just be swayed by the final dollar amount.

Again, the final price could end up costing you more at the very end if it undercuts your entire project. Trying to save $10k now could cost you $50k or $100k in two years.

Technique #4 — Products vs. Solutions

Ask yourself this—are you buying a product, or are you buying a solution?

A product is generally some type of widget that you’re purchasing. It could be software or something physical. When you’re buying, you can assess the cost of the item plus some margins. This will work fine if that’s the size of your problem.

But with larger problems that exist within companies, you’re not necessarily looking for a product to solve your problem; you need a solution.

Let’s refer back to one of our previous analogies comparing a consultant to a contractor.

The consultant will evolve with the problem as it changes shape. At the time I’m writing this guide, we are in the middle of the COVID-19 global pandemic. For business owners out there, you’ll need to find ways to think and strategize for the coming 6-12+ months on what to do with your investment.

These problems are hard to anticipate at the time of inception. But if you have a partner, they can help you evolve and adapt to changing markets. A partner can help you strategize on your minimum viable product (MVP).

You might need a new strategy to get to market. Here’s a visual example to show you what I mean.

If something changes in the market, you want to make sure that you can still release a functional product. A contractor won’t be able to strategize with you, but a consultant will have ideas.

Maybe you need to cut back on some features to get to market sooner? Or maybe you should wait three or six months later than you anticipated, so you have the opportunity to grow feature sets in your project.

Or maybe you need to reshape the feature sets based on the growing needs of the market.

The idea here is that you should be looking for a solution instead of a product. Solutions are better when they come with a consultant that can evolve with emerging changes or problems that you’re faced with.

Technique #5 — Challenge the Quote

Challenging your quotes is the best way to get a better sense of the agency or developer’s intentions.

Ask them what they would do differently if you were able to invest another $100k or $200k in a year?

They might say that your servers don’t have any security right now, so they recommend securing them with encrypted data. Or maybe they recommend scaling up the servers so your app can accommodate more than just a few thousand users.

A developer or agency could unknowingly start to uncover all of the weaknesses in the quote that they initially gave you.

So listen carefully. Are they adding new features? Or are they trying to fix weaknesses that were already baked into the quote?

Another way to challenge the quote is by doing the opposite. Now find out what they would do if you have less money. If they had to cut three things from the quote, what would be eliminated?

By asking the agency or developer to reevaluate their initial quote, you can see if any “fat” needs to be trimmed.

Is every feature mission-critical for the product to get to market? Is it the MVP? This is the way you should be thinking.

If right away, they come up with three or four things that can be cut out, you know that there is probably a lot of fat in the quote. But if they only offer to slightly modify or adjust things, you know that the fat is minimal.

Challenge the quote both ways. First, see if greed comes out and skeletons are exposed if you offer more money. Then see what would happen if your budget was less than you initially offered.

Conclusion

All of these techniques will help you better assess the kinds of quotes that you’re getting.

Whether you’re dealing with agencies, developers, or partners, you’ll be equipped with a lot more tools and metrics to make your decision. This will help you find the best solution without just looking at the dollar amount and final cost.

I hope that you found this guide helpful for pricing your app development project and shopping around for developers.

Let me know if you have any other questions or need assistance. Good luck!

5 Hidden Costs of Software You Need to Anticipate AFTER You Launch

After months of hard work, your software is finally up and running.

But as you’re going through your finances, you notice that your monthly expenses haven’t gone down—if anything, they’re going up. What’s going on?

There are hidden costs of software that you need to anticipate after you launch your project.

Honestly, this is something that I always have to remind my clients whenever they’re developing new software. They assume that once the project has been developed, the expenses are going down to zero and they’re done paying.

That’s not the case at all, and it couldn’t be further from the truth.

Here’s an analogy to explain the situation. Let’s say you upgrade from renting an apartment to buying a house. Would you assume that after the down payment, your mortgage will be your only expense as a homeowner? No.

Look at your expenses. Your water bill, gas bill, electric bill, and everything else will go up because your house is bigger than your apartment. You might have other expenses creep up on you that you’ve never had before, like a gardener or a landscaper to maintain your property.

Software development is the same.

Whenever you scale up from a small project to a bigger project, there are certain expenses that you’ll incur on an ongoing basis. Everyone is so busy determining the development rates, they forget about the post-launch hidden development costs.

In this guide, I’ll explain the top five hidden costs of software you must anticipate after you launch.

Hidden Cost #1: Maintaining Your Staff

Who developed your software? The app development team will continue to maintain your software even after you launch.

Your software is going to evolve with the market as new opportunities present themselves. The vision will also evolve based on customer demand.

You always need to remember one thing—stagnant technology is dead technology.

Look at companies like Facebook, Google, Twitter, and all of the other global giants out there. They’ve done a pretty good job at developing software, wouldn’t you agree? Everything you can possibly think of has been developed. So why do they have an army of engineers working behind them? Software development is never finished.

Between maintenance, new features, customer demand, and just scaling the platform, you’ll always need your staff to maintain this.

On average, look at how often mobile apps are updated and enhanced.

Roughly 30% of apps are updated at least once per month. An additional 53% of apps are updated every six months.

So you can’t plan to let your development staff go after the launch date. The team members who developed the app will continue to stay on board.

The truth of the matter is this; if you get rid of people, your software will slowly die.

Remember, to maintain a competitive edge in this crowded market, you must constantly evolve. The software you started with needs to change and adapt over time.

You might have some wiggle room with the capacity of staff that you need to keep. For example, maybe hired five engineers during development. But now you just need two or three. Your team will still be comprised of engineers, a QA professional, DevOps, a designer, project manager, etc.

These post-launch development costs must be taken into consideration and planned for ahead of time.

Hidden Cost #2: Hosting Expenses

You must anticipate hosting costs in your initial budget.

These costs are incurred from hosting the servers for your software. You’ll have email servers, push notification servers, analytics servers, integration servers, and other servers depending on the type of app you’re developing.

Most likely, you’re dealing with a company that delivers you a product or SaaS that you’ll pay a monthly fee for. Or you’re hosting the software somewhere in the cloud with a company like Amazon Web Services. There will be a monthly fee for this type of hosting as well.

Not only will you incur these expenses post-launch, but the costs will rise as your company scales.

It’s very important that you prepare for this from a budget standpoint. There will be ongoing hosting costs to maintain those hosts. If your servers are hosted in the cloud, you’ll still need a staff member on your team to deal with those servers. This brings us back to our first point about needing to continue paying your staff.

Hidden Cost #3: Maintenance

Before your launch, I’m sure you’ve gone through the technology to make sure that everything was working properly. All the bugs were found, fixed, and you’re done—right?

That’s not necessarily true, especially in the mobile app space.

While you might have fixed the bugs for certain devices or specific operating systems, devices evolve over time. When this happens, your technology or application could regress.

Take a look at the average cost to maintain an app in the first year after launch.

Some of you probably know why software development is expensive. But why is it so costly to maintain? What are companies spending $10k-$25k+ per year on?

As new demands come from Apple or Google, your compliance levels might downgrade.

New legislation comes into effect for the quality of your app, the security of your app, or the privacy of your app. All of these things could change.

I’m referring to things like:

  • GDPR compliance in Europe
  • CCPA compliance in California
  • ADA compliance across the US
  • International compliances
  • PCI compliance
  • HIPAA compliance

The list goes on and on. Your technology needs to evolve as all of these things change.

Refactoring

Refactoring is another side of maintenance that’s worth highlighting on its own.

The idea behind refactoring is that you write code that’s just good enough to pass basic testing, compliance, limitations, or something else. Then you go back and clean it up at a later time. Here’s a simple visual explanation of how refactoring works.

Some of your code that was put in during development might have been “good enough” at the time. But as you scale, it must be rewritten to manage the new traffic load as your business grows.

To be honest, these are good problems to have. It means that your app is growing. But you still need to anticipate the costs ahead of time to be fully prepared.

Here’s another analogy. Let’s say you have a commercial printing press company. Your main printer is currently printing 5,000 flyers per day. It starts to malfunction, so you fix it with a “band-aid” solution. You know that your fix will get the machine back in action to continue producing 5,000 flyers per day. But if you ramp up to 10,000 flyers, the band-aid won’t be sufficient.

Well, that’s a great problem to have. When you get to that number, your daily business just doubled. But it comes with added maintenance costs that you need to plan for.

Hidden Cost #4: Training

Training is the most underestimated expense in terms of hidden software costs.

The biggest mistake that people make is assuming that their staff who is maintaining the app is going to stay with them forever. But that’s not going to happen.

In reality, some of your staff will make career decisions and leave you. You’ll be unhappy with other team members, and you’re going to fire them. This is just standard procedure when it comes to running a business.

There will always be turnover in personnel.

What happens when you lose someone with crucial domain knowledge? Don’t assume that whoever you hire will be able to replace that person immediately.

Just because someone is a good developer or a good engineer, it doesn’t mean that they understand your software. They are a good engineer for the software that they’ve developed—not necessarily what you’ve developed.

So it takes time for them to understand your business model, technical depth, infrastructure, and other components of your software.

The average cost to recruit, hire, and train a new employee is $4,000.


In the tech industry, you can expect these costs to be even higher.

I know some of you might think that engineers are a dime a dozen, and you can find them anywhere. But even if someone is a blackbelt and an expert, they will not be an effective part of your team as soon as they come in. This takes time.

So how can you avoid these expensive training costs? The idea here is to avoid single points of failure with human beings.

You wouldn’t want a single server to run your entire mobile app, right? If the server dies, the app dies with it. The same thing can be applied to people.

If you have one person with so much domain knowledge—what if that person gets hit by a bus? Can you and your business actually continue without them?

You need to cross-train people. Make sure that your capacity isn’t at a bare minimum.

Always have at least one spare person. If you only need two people at a minimum, then you should probably hire a third person. So if one person leaves, you’ll still have enough to operate. When that happens, you can always hire someone else as that “spare tire.”

Let’s say you have a retail store. You only need two people at the counter per shift—two in the morning and two in the afternoon. Would you only hire four people? No. If someone quits, gets fired, goes on vacation, or calls out sick, you’ll be short-staffed.

So even if you only need two people to operate the store per shift, having three fully-trained employees available is a safer option.

This analogy is magnified in the software development world if the person who leaves takes all of the knowledge with them. Training a new person could be near impossible if nobody has the information to provide.

Hidden Cost #5: Strategic Costs

Strategic costs are incurred whenever your business sees a new market opportunity. You need to shift gears quickly to make sure that you can actually address the market need.

Lots of times, market needs are time-sensitive. So if you wait six months to take action, it might be too late. In terms of technology, just 34% of companies seek to get first-mover advantage.

If you fall into this category, it can give your software a significant edge over the competition. Strategic costs will creep up on your technology and force you to shift gears in terms of your priorities.

You might even need to hire a few extra people to make sure you hit your target on time. So the anticipation of these hidden costs is so important.

Sometimes you need to hard-code certain elements to hit that timeline. You’re essentially “hacking your way” to a solution that needs to be brought to market as soon as possible.

But after the software gets to market, you’ve incurred what we like to call “technical debt.” You need to go back and reassess the platform to make sure that it scales with the growing needs of your company. All of this falls into the category of strategic costs.

You knew going into this venture that you were essentially developing a technological house of cards to get to market. But that house of cards won’t be secure forever. It can easily collapse.

Now you need to take a step back and actually rebuild or refactor, as we mentioned earlier when discussing software maintenance costs.

The reason why strategic costs are so important to anticipate is because it gives you leverage. If you plan ahead, you can actually pounce on that opportunity as soon as it presents itself. You don’t want money to be an issue here.

Pro Tips and Best Practices to Prepare For Hidden Software Costs

Now that you’ve seen the top five hidden costs of software post-launch, it’s time to share some tips that will help you plan accordingly to anticipate those costs.

Spending money after your launch is inevitable, but you don’t need to break the bank. These tips can help you save some money if you plan accordingly.

Develop Your Staff

We already established that you need to maintain your staff. But to help keep costs low, you need to develop them using the golden ratio, which is something I’ve discussed in previous posts and videos.

Here’s the idea. Use local and remote resources enough, so the combination is in the correct balance for your business. This type of staff development will allow you to scale up efficiently without breaking the bank.

Servers vs. Maintenance

We’ve also talked about the hosting costs and maintenance costs, separately. However, these two hidden expenses are actually interconnected.

Sometimes it makes more sense to pay more for hosting fees, so you won’t have to maintain as much on your own.

For example, let’s say it costs you $1,000 for a fully-managed host. That’s nothing compared to the cost of having a staff member maintain a cloud hosting solution on their own.

So go ahead and pay for it without thinking twice. It’s cheaper and becomes a headache for someone else to deal with—not you. You won’t need a staff member that constantly has to deal with server maintenance. So try to find a hosting provider that will cover these things.

While the initial price tag for this service might seem expensive, you should always weigh it against the cost of having an individual from your staff working on it. The hosting cost will always be cheaper in the long run than maintaining it on your own.

Strategic Partnerships

It’s crucial that you have a partner who understands your technology.

This could be your host, an outsourced agency that you’re working with, or a platform that you’re integrating with. Whoever it is, make sure that they understand your vision. It’s important that they have the ability to help with the big picture during changing times.

Opportunity costs and the costs of making mistakes is extremely expensive.

A strategic partner can save you time if they are an expert in a particular field. Or maybe they’ve been through this before and already made mistakes that you can learn from.

Your strategic partner is highly valuable and can save you a ton of money over time.

Anticipate Today, Solve Tomorrow

It’s obvious that you need to anticipate future problems and opportunities. We’ve been talking about this throughout the entire guide.

Anticipate those problems today, but solve them tomorrow.

Not all of today’s problems do not need to be solved today. You might be developing something right now that’s good enough to get to market without hiring two or three new developers. That’s fine. But you need to anticipate the delayed costs that you’re going to pay for later.

This is especially crucial for new businesses. A dollar today is much more valuable than a dollar tomorrow.

Be strategic with the debt you incur so that you’re in a good position to address the problems when they eventually come up.

For example, let’s say that you know that your server will fail when you pass 100k users. That doesn’t mean you should pay for that capacity on day one when you have zero users. The money could be better used elsewhere.

But when you finally reach 100k users, it’s a good problem to have. By now, you probably have a successful business that will allow you to pay for the added costs.

However, if you’re paying for that infrastructure today, you’re burning through precious dollars now on a hypothetical problem that might not happen for another year or two.

 

Conclusion

The costs associated with software development do not end after you launch. If you’re building an app, you must anticipate the five hidden costs that I’ve outlined in this guide:

  1. Maintaining your staff
  2. Hosting expenses
  3. Maintenance
  4. Training
  5. Strategic costs

Anticipating these ahead of time will ensure that you have enough money in the budget to be successful. Otherwise, the quality of your software will suffer. Keep my pro tips and best practices in mind as well to help save money on software development.

I hope this guide was helpful. Use it to anticipate future costs whenever you’re developing new technology.

Why is Software Development Expensive?

Do you ever wonder why software development always seems to be so expensive?

“Expensive” is obviously a relative term. What I think is expensive might be very different from what you consider to be costly.

But generally speaking, software development is expensive. I don’t care who you are. When you’re talking about spending tens or even hundreds of thousands of dollars on something, nobody will consider that to be cheap.

Fortunately, software development does not have to be so high-priced.

In this guide, I’ll explain why the cost of app development has traditionally been so high. You’ll also learn some alternative ways to keep your software development costs as low as possible.

App Development Cost by the Numbers

Taking the time to evaluate each component of the development process will help open your eyes up to the complexities involved.

The easiest way to explain software development costs is by using an example with real numbers. We’re going to do some math to calculate development rates. But don’t freak out—I’ll keep this simple, so it’s easy to follow along.

When you first consult with a development agency, they’ll send you an invoice or an estimate. Here’s an example of what the line items on a sample invoice could look like.

Keep in mind; this is the development cost for one month only. As you can see, the price adds up pretty quickly.

Don’t worry—as I said before, I’ll show you how to dramatically reduce this monthly cost as you continue reading. The overall cost of your project doesn’t have to be as high as you initially thought.

Let’s break down each line item of this sample invoice and explain where these numbers came from:

Developers

Any time you’re referring to software development for mobile apps, the people building it want the app available on iOS and Android devices (generally speaking). This will essentially make their app available to the entire planet.

So on the invoice, there are developers for each platform; one for iOS and one for Android. That’s because the app must be built in two separate languages for each operating system.

Where did we come up with 173.3 hours for the month?

Assuming a developer works 40 hours per week, that translates to 2,080 hours per year. I just divided 2,080 by 12 months to calculate how many hours each developer will work per month.

In the sample invoice, I used $60 per hour for all developers—iOS, Android, and web.

For those of you wondering where the $60 figure came from, allow me to explain.

I used Upwork, which is a popular platform for finding developers, designers, agencies, and other professional services around the world. If you run a quick search for “software developer” on here, you’ll see a wide range of prices based on the developer’s location, qualifications, and other factors. Some range as high as $300+ per hour.

But if you turn off the “US only” toggle, you’ll see more reasonable prices from developers in other countries.

If you scroll through the options on Upwork, you’ll see that $60 is actually a modest estimate that falls on the lower end of the spectrum.

$60 per hour multiplied by 173.3 hours per month costs roughly $10,400 per month per developer. Simple math.

I’m sure some of you are wondering why a web developer is listed on the invoice for app development. Especially considering the rate of $10k+ per month, is that really necessary?

In some cases, you will not need a web developer to build an app. But only under rare circumstances. The vast majority of the time, a web developer is absolutely required.

Let’s say you’re building an app that has usernames and passwords for user profiles.

Where did you authenticate that user from? Both the username and password must both be checked against a database, somewhere in the cloud, set up by a web developer. This has to happen to ensure the user and password are both valid.

When a user logs in to their profile and sees specific information intended for them. Where did that come from? Again, it’s information saved in the cloud and managed by web developers. A web developer creates the backend system for your app.

QA Manager

The quality assurance manager is in charge of checking everyone else’s work.

This person is responsible for making sure the developers are doing a good job. They check for bugs, errors, or everything else to ensure the app runs smoothly.

Generally speaking, the QA manager rate is roughly 75% of the developer’s price. So that’s where I got $45 per hour. They can also do their job in about 75% of the time as a developer (130 hours on the invoice).

Designer

There are two types of designers.

Some work ahead of the developers. They design everything out and then pass it to the developers for implementing it. Other designers can actually implement the design themselves.

Whether they create the design or inherit the design from someone else, it’s the designer’s job to make the UI of your app beautiful.

In terms of an hourly rate, designers make about 90% of what a developer makes and complete their work in about 75% of the time. That’s where $54 per hour for 130 hours per month came from on the sample invoice.

Project Manager

This role is pretty self-explanatory. The project manager is in charge of everyone else.

They make sure everyone shows up on time, does the work that they’re supposed to do, and ensures nobody is slacking off. The project manager keeps the schedule on track to guarantee deadlines are met.

Project managers work a full 40 hours per week for a rate that’s about 80% of the developer’s rate. So for this example, I have the project manager making $48 per hour.

Again, these numbers aren’t exact for every agency or developer. But it’s a good ballpark estimate for you to follow and see where the development costs are coming from.

Factors That Impact Development Costs

So far, we’ve been able to establish the rates for each person building the app. We used those rates to determine how much software development costs per month.

But that’s just one variable. To find out the total price of your development project, you need to figure out how long the development process takes.

How many months does it take to develop your software?

Here’s an example to help you figure it out. Check out this UX flowchart I found on Leanplum.

Everyone building an app should create a user flow chart like this one.

It’s very simple and easy to follow. Regardless of what your app does, you’ll be able to relate to this and how it works.

This flowchart starts with the log-in screen and goes to the home page. If a user doesn’t have log-in credentials, they’ll need to sign up. From the home page, users can access the side menu for navigating to top features and pages. The flow chart includes a settings page and app dashboard as well. Your app will likely have all of these.

The bottom of the flow chart contains the features. In this case, there’s a feature for news, calendar, messaging, and user profile.

If you’re creating a flow chart for your specific app, you can just call these Feature A, Feature B, Feature C, Feature D, etc. if that’s easier for you. Even if your features are different, you can see how this works.

For simplicity’s sake, let’s say there are ten custom screens that we need to build an app (based on the flow chart). While this isn’t fully comprehensive to accomplish your task, it’s good for our example.

To figure out how long it takes for each component of development, I created a spreadsheet template that we can plug numbers into.

As I adjust the quantity column for each line item, the number of weeks for each position will change to calculate the total price of development.

To reiterate, I have this spreadsheet programmed to calculate the total price based on developers charging $60 per hour. All of the other positions rates stem from there, as we previously explained.

Here’s a breakdown of each line item on the spreadsheet:

Custom Screens

As I said before, we’re going to say that we need to create ten custom screens based on the flow chart. Each screen will likely take one developer week.

Realistically, some will take more, and some will take less. But using a 1:1 ratio is a good estimate for this purpose.

The designer weeks and QA manager weeks will be roughly 20-25% of the development weeks for custom screens.
Backend Admin Screens
Password reset screens and user blocking are both two examples of backend admin screens.

It’s whatever backend dynamic content you need to create for your backend system. It requires a web portal for you to manipulate the information, which is set up by a web developer.

To keep it simple, let’s say we need three backend admin screens. I’ll plug this into the spreadsheet and show you the final results at the end.

Custom Reports

The custom reports could really be for anything.

It all depends on what your app does and what type of information you need. Common reports are related to things like user behaviour, revenue, engagement, and more.

For our example, we’ll say you just need two custom reports and plug that into the spreadsheet template.

Integrations

Let’s say you want an app to integrate with something like Google Maps.

Or maybe the app needs to integrate with a mail server, payment system, analytics solution, or any other third-party platform.

To continue keeping it simple, we’ll say our example app needs just one custom integration.

Margin of Error

Things happen during app development.

So in case something were to run over schedule or over budget, I padded everything by 5% to account for that.

Here’s an updated look at our spreadsheet based on all of those numbers we just discussed.

Everything should be self-explanatory and easy to follow on the sheet, but here’s a quick recap:

  • Custom screens — 10
  • Backend admin screens — 3
  • Custom reports — 2
  • Integrations — 1

Based on these estimations (including a 5% margin of error), the entire project will take 23.2 weeks. As a result, this will cost you roughly $12k per week.

Where did I get that from?

It’s simple. Refer back to our initial sample invoice of $52,390 per month. I multiplied that by 12 months and divided that total by 52 weeks in the year to get $12,090 per week.

At roughly 23.2 weeks of development, the total project will cost over $280k.

Other Examples

I know what some of you are thinking. All of this is based on developers charging $60 per hour. Each factor stems from that initial estimate.

Maybe you want to outsource development to India or the Philippines for a cheaper rate. Here are a couple of other examples to show the total cost based on lower rates.

I adjusted the sample invoice and spreadsheet accordingly for each one.

Developer — $40 per hour

Here’s what the monthly invoice would look like if you browsed Upwork (or another similar platform) for a developer that charges $40 per hour instead of $60.

As you can see, the cost for the QA manager, designer, and project manager have all been adjusted accordingly based on the ratios I described earlier.

This brings the total monthly cost to just under $35k, which is roughly $8,060 per week.

If it takes 23.2 weeks to build, your total cost will still be about $187k, which is about $93k cheaper than our first example. That’s definitely cheaper, but it’s still expensive.

Developer — $20 per hour

What if you find someone even cheaper?

If you go as low as $20 per hour, you’re really scraping the bottom of the barrel now. Remember, our initial example using a developer charging $60 per hour was already a modest estimate for an overseas developer.

But just to show you what this would look like, here’s that same invoice adjusted for the new rate.

Even at $20 per hour, it’s still going to cost you over $17k per month.

If you apply this number using our calculations for the timeline, it’s going to cost you about $4,030 per week for 23.2 weeks for a total project cost of roughly $93k.

Inexpensive Ways to Develop an App

Earlier I promised that I’d give you some tips for reducing the cost of software development. Remember, there are two main variables that impact the cost of development.

  1. Price per hour
  2. Timeline

You could seek a lower price per hour (as I did with the additional examples above). However, this will almost always affect the quality of the project.

It’s a cliche saying, but in many cases, you get what you pay for. A developer willing to build your app for $20 per hour will not put out the same quality as a $60 or $80 per hour developer.

Once you’re neck-deep in with a low-quality agency, what do you do?

If your app isn’t delivered on time, you’ll either cut your losses and start over or keep sinking more money in as the timeline continues longer than expected. As a result, you could end up spending double, triple, or even quadruple the initial estimate.

This defeats the purpose of choosing a lower hourly rate, and you’re still not happy with the final product. So looking for a cheaper developer is not the best way to develop software for a lower cost.

Best Way to Build an App For Less Money

Partner with a system that has most of what you need pre-built.

Do you need a mail server or custom feature? Don’t create one from scratch; just integrate it.

Refer back to the UX flowchart we talked about earlier. A platform like BuildFire already has log-in capabilities, sign-up screens, home pages, side menus, settings, profiles, in-app messaging, calendar features, news features, and more.

So instead of needing ten custom screens, you might just need one or two.

If you pay a premium rate for developers, you want to know that they’re going to create a beautiful and highly functional app. It’s better to put your resources into getting something done well as opposed to reinventing the entire wheel.

The hourly rate might even go up in this case. But the overall project cost will be significantly reduced.

You’ll just be focusing on bridging the gap for your particular app by leveraging all of the pre-built functionality. You can even build this incrementally because there is an existing system in place.

There’s also a backend system for analytics, push notifications, user authentication, CMS, etc. An app building platform will have a massive amount of infrastructure on the backend that you can just inherit.

Conclusion

I hope this guide helped you better understand why software development can be so expensive.

After looking at all of these examples, I tried to help you appreciate the costs associated with the backend of development and show you what it takes to build software.

Use this information to keep you informed with your next endeavor. If you need help, you can always reach out to our team here at BuildFire.

Software development doesn’t need to be so expensive if you use the right platform.

Researching Mobile App Agencies? Ask About These Hidden Costs

So you’ve finally decided that you’re ready to build a mobile app. That’s exciting news! Maybe the app is for your e-commerce shop or intended to improve your internal business communications.  Who knows? Maybe you have a great idea for an app and want it to become the next Snapchat.

Regardless of your scenario, you need to figure out exactly how you’re going to develop your app. Finding a mobile app development agency is a logical place to start.

There’s just one problem. You’ll likely find hundreds of different agencies to choose from. How can you possibly know which one is the best for your app?

Fortunately, you’ll be able to eliminate some options right away based on things like their location or reputation. But once you start narrowing your choices down, the cost of your app will likely play a major role in your decision-making process.

Unfortunately, not every agency is always transparent about their pricing. 

If you don’t know what questions to ask an agency, then you could end up building an app that costs double or triple the amount that you initially thought. 

Don’t get me wrong; this is not necessarily because agencies are trying to deceive you. While there are certainly some bad apples out there, this won’t be the case for the most part. 

Some important mobile app development factors just might not be included in your initial bid from a developer.  So it’s in your best interest to get all of this information clarified from the beginning to avoid unpleasant surprises down the road. 

So use this guide to help you get a more accurate bid from the mobile app agencies you’re considering for your app development project.

Here are some of the most common hidden costs you need to ask about: 

Pre-Launch Hidden Costs

The simplest way to break down hidden costs is by pre-launch and post-launch. So the first thing we’ll do is cover the questions you need to ask an agency related to the development process. 

What Platforms Are Covered?

There are two platforms for mobile app development; iOS and Android. The total cost to develop an app for each platform will vary, with Android development being slightly more expensive than iOS development. 

So this question is simple. When you’re consulting with a development agency, just ask if the bid includes iOS, Android, or both.  Assuming you’ll want your app exposed to the widest possible audience, you want to find a bid that includes development for both platforms.

If you don’t ask, your final product may only be half of what you expected, and the additional costs could ultimately double to deliver what you need.

You should also inquire about the type of development the agency is going to use when building your app for each platform. If they are planning to build a traditional native app, then they will have to build two separate versions for each platform.

This development process will add unnecessary costs to your bid. 

Look for a development agency that can build hybrid apps. In this case, you can build for iOS and Android simultaneously, without having to develop two separate apps. 

Finding out if your prospective developer offers hybrid development can save you from a significant amount of hidden costs as well. 

What Technology is Required?

According to a recent study, the average cost of a mobile app ranges from $38,000 to $171,000. 

Obviously, there is a huge difference from the bottom of this price range to the top. That’s because all apps are not created equally. 

As you can see from the graph, a huge portion of that price is related to features and infrastructure. Both of these factors are related to the technology needed to make your app work.

It’s like asking about the average cost of a house. If you want to buy a one-bedroom house with 500 square feet in the middle of nowhere, it will cost significantly less than a six-bedroom, 4,000 square foot house by the ocean.

Apps are the same way. The price will depend on the features you want, and the technology required to meet those needs. 

All too often, I see people who want to build an app focus all of their attention on app features. There’s nothing wrong with this, but you need to understand the technology behind those features as well, and how that technology will impact the cost.

For example, if you want to save user information, make sure your bid includes a database server. If you want to conduct user analytics, make sure your bid includes an analytics server.

An app that allows users to log in will need an authentication server and an app that sends push notifications will require a push notification server.

The list goes on and on. Each new feature will require a supporting piece of technology, which ultimately increases the cost. 

So ask your development agency if all of the technology is included in the bid. Otherwise, you could be surprised to see some hefty upcharges when everything is complete. 

How Long Will it Take to Build?

Depending on the agency, your development timeline could impact your final cost. It all depends on how they set up your bid.

For example, if they’re charging you a fixed monthly rate until the development is finished, your app could end up becoming much more expensive than anticipated if they fall behind schedule.

Here’s a look at some different steps in the development process.

mobile app

As you can imagine, there is no one-size-fits-all answer to how long it takes to build an app. 

We’ve previously published a guide on mobile app development timelines. During our research, we discovered:

  • 24% of apps take 1-3 months to build
  • 48% of apps take 4-6 months to build
  • 16% of apps take 7-9 months to build
  • 12% of apps take 10 or more months to build

So for the most part, there’s a good chance that you can build an app in six months or less. 

If an app development agency is telling you that this process will take longer, make sure to ask if the bid is related to the time frame. You want to make sure that the price is fixed, regardless of how long it takes to develop. 

How Will the App Be Secured?

While it may not be the first thing that comes to mind when you’re thinking about app development, security is certainly one of the most important features to consider. 

But again, not every development agency will include this pricing in their bid. So you need to ask if your quote covers all of the necessary firewalls and encryptions. 

Security is not something that you can overlook. Here’s why.

Let’s say you’ve budgeted $20,000 to spend on an app. However, you realize after it’s been built that the bid didn’t include security. But you’ve already maxed out your budget. Now what?

You can’t launch an app without the proper security elements. So if you can’t find a way to come up with the additional cash, you’re stuck.

In addition to asking about the cost of security features, ask your agency to be specific about the type of technology they will use to keep your app safe. If they are only using basic security, you may need to come out of pocket down the road for advanced protection, which is a scenario that you’d obviously like to avoid. 

Hidden Costs Once Your App is Live

Developing a mobile app is like owning a house. If you only think about the initial purchase price, then you’ll be disappointed to learn that you have to pay for insurance, utilities, and regular maintenance. 

The cost of building an app doesn’t stop once it’s live. So talk to your development agency about the prices associated with the situations below. 

Making Changes

Even the best and most popular apps on the market come out with updates on a regular basis. 

Sometimes this is because you intentionally decide to build it out in stages.  Other times, it’s just because you find ways to optimize it over time by improving the user experience.  Or if you have an e-commerce mobile app, these changes could be related to reducing friction in the checkout process to increase sales. 

And don’t forget updates that will inevitably be needed in order to keep up with the latest technology, such as new OS released by the mobile platform

The bottom line is this—your app is going to need changes.  So how much will these changes cost?

Ask your development agency.  Find out if the quote includes updates. Will you be charged per update? Do they charge you a monthly or hourly rate to be on call?

At the end of the day, these costs are unavoidable. So try to find a development agency that gives you fair and transparent pricing for updates so you can plan accordingly. 

Scalability

While it may not be something that you’re dealing with all of the time, your mobile app is going to have traffic spikes from time to time. Don’t worry; this is a good thing.

It means that people are using your app. However, this traffic increase can overwhelm your capacity, causing servers to go down. Unfortunately, this is one of those things that just happens.

That’s why you need to understand how your app is supported by a load balancing and auto-scaling perspective

Auto-scaling ultimately reduces costs because it will always adjust the number of required resources based on the current workload of your app. 

You don’t want to cut corners when it comes to the pricing here. Otherwise, there could be instances where your app is crashing or unavailable. That’s obviously something you want to avoid.

But with that said, you don’t want to overpay for resources that you’re never going to use or only going to use on rare occasions. 

So talk about your scalability options with your mobile app developer. Ask specifically about the workload and costs associated with scaling. See if they have a cost-effective option, such as the load balancing and auto-scaling described above. 

Support

Will your app development agency continue to maintain the app for you after it’s been built? Who do you call when stuff happens? How much will this cost?

These are important questions to ask as well.

Ideally, you want to find a mobile app developer that’s able to maintain your app and infrastructure post-launch. That’s going to make things easier for you in the long-run.

However, make sure you get a quote for how much this will cost. 

In most instances, there will be a fixed monthly fee associated with supporting your app. Just ask about it ahead of time so you’re not surprised by the bill down the road. Compare this cost to the rates offered by other developers you’re vetting as well. 

Conclusions

When you’re narrowing down your choice of mobile app developers, just make sure you take a close look at your bids to make sure that you won’t be surprised by hidden costs down the road. 

At first glance, you may think that one agency is significantly cheaper than the other. However, upon further inspection, it might be because they didn’t include the costs related to technology, security, or support.

Being able to distinguish between pre-launch and post-launch costs is crucial from a budget standpoint as well. 

When you’re shopping around for a developer, just be sure to ask these questions. So use this guide as a reference for figuring out which questions to ask. 

 

App Development Costs: How Much Does it Cost to Make an App?

How much does it cost to make an app? There’s not a fixed price for building a mobile application.

Think about some of the most recent products or services that you’ve bought. Whether it’s a car, cell phone, or cleaning service, there are different price points depending on certain elements.

The same goes for your mobile app. So how much does it cost to make an app? The app cost is going to depend on what you’re trying to accomplish.

Just like most things in life, you get what you pay for. You can’t expect to build an amazing app for just a few dollars. But at the same time, spending a ton doesn’t automatically translate to success.

Here’s an analogy that you can probably relate to.

Spending a fortune on kitchen supplies won’t make you a professional chef if you don’t know how to cook. You’ve got to know what you’re doing to be successful.

So just because you want to spend as much money as possible to develop your app, won’t make it an automatic hit if you don’t know how to run a business.

App Development Cost Breakdown

What’s the average cost to make an app? You’ve got to take quite a bit into consideration when you’re looking at different price tiers for app development.

Here are a few of the main factors that affect the app development cost:

  • who builds your app
  • how your app gets built
  • what you need your app to do
  • your app budget
  • mobile app design
  • maintenance cost
  • app complexity
  • operating system (Android and iOS apps)

Each of these points will impact how much you’re going to pay. I’ll discuss these factors in greater detail throughout this guide.

You can use this article as a reference to help determine the major differences between spending $1,000, $100,000, or somewhere in the middle for your app idea.

Here’s what you need to know about app cost:

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How Much Does It Cost to Build a Mobile App? (You’ll be surprised!)

LAST UPDATED: December 4, 2017

The mobile revolution has ushered in an exciting era for business.

Websites and social media platforms are no longer the only way to build brand equity and generate sales.

Building custom mobile apps is now the new money move for businesses.

And it’s no surprise.

In 2017, there have been 197 BILLION app downloads. That number will explode by a factor of three in a couple of years.

Exciting stuff? You bet.

Chances are, you may still be relying on your website to fulfill your business goals.

Perhaps the seemingly hefty time and money investment of an app have kept you back.

The truth is, you can easily catch up. A mobile app can be built without too much hassle these days.

This brings us to the critical question:

Just how much money will a custom app set you back?

I’ll tell you right off the bat. There’s no magic formula to determine the cost of building an app.

Platform matters. Complexity matters. Talent matters.

And so do a dozen other factors.

In this article, I’ll get into all the variables that will affect the cost and some exact figures. This way, you’ll know exactly what you’re getting into.

But first…

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How Much Does Mobile App Development Really Cost?

Today it seems like everyone has an idea for a mobile application.

This isn’t surprising.

The mobile industry is trending upward from both the consumer and business perspectives.

But before you dive in head first and start development, you’ve got to do some research.

Find out what types of apps make the most money if you think your idea might be the next big hit like Instagram or Snapchat.

If you’re trying to improve your existing company, you’ll need to crunch some numbers to figure out if it’s worth it to build a mobile app for your business.

But most importantly, how much does it cost to make an app?

I get this question all of the time.

If you ask 10 people this question, you’ll get 10 different answers.

The reality is – it depends.

That may not be the answer you were looking for, but let me give you an analogy you that can relate to.

How much does it cost to buy a car?

There isn’t a one size fits all answer.

It depends on lots of different factors.

Well, same goes for mobile app development.

These numbers aren’t set in stone, but they give you an idea of vast price range.

There is no “out the door” price either.

Your app will continue to cost you money even after development is completed.

Think back to the car analogy. You’ve got to put gas in it, oil, get regular maintenance, change the tires, brakes, and much more.

As an industry expert who has lots of experience building mobile apps, I can help clarify some of the pricing for you.

Continue reading “How Much Does Mobile App Development Really Cost?”

Hiring Mobile App Developers: How Much Does it Cost to Hire an App Developer?

So you’ve finally decided that it’s time to create a mobile application.

Now what?

Whether you’re creating an app from scratch or launching one for your existing company, the first step is figuring out how you’re going to develop it.

You’ve got a few options to consider.

You can learn how to become a mobile app developer on your own, but that’s not necessarily realistic for everyone.

Do you know how to write code for apps?

I’m willing to bet that’s not part of your current skillset.

Don’t get me wrong – it’s not impossible to learn how to code.

But do you really have the time for that?

If you’re currently running a business, I’m sure that takes enough time out of your day as it is. I don’t want to discourage you from learning a new programming languages for software development, but I’m just trying to be realistic. As an expert in this industry, I know how much time and effort it takes to learn how to code.

My experience has taught me that the first app someone builds after learning to code isn’t going to be flawless.

If your app has bugs, glitches, or other problems it can increase the chances of user abandonment.

You don’t want to fall into that category.

So now that we’ve ruled learning to code out of the equation, I’ll give you the most reasonable option. Hire an app developer.

If you start to shop around, you’ll learn that there are so many different options and price ranges.

It’s overwhelming.

You may be tempted to just go with the cheapest option, but you don’t want to sacrifice on the quality.

On the flip side, you don’t want to necessarily pick the most expensive choice.

You’ll quickly realize that the priciest developers can cost upward of $1 million.

budget

So, now you’re asking yourself – how much should hiring an app developer actually cost?

It’s a fair question.

While I can’t give you an exact number, I tell you what to look out for to help narrow your choices.

Here’s everything you need to know before you get started.

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App Development Cost: 10 Hidden Costs of Mobile Apps & How to Handle Them

Traditional mobile app development can be costly, slow and frustrating. How much does it cost to build an app? A single app development and deployment may cost anywhere between $50,000 and $1,000,000 and it can take from half a year to upward of a year to be completed.

The core issue here is that app development itself is just the tip of the iceberg. The app development process consists of development, deployment and app maintenance. Most people only focus on app development, so the cost of the latter two phases surprises them. This causes app developers to go above their initial app development budget.

Some studies estimate these ongoing costs of app development:

  • In the first two years of a typical mobile app, app development only represents 35% of the total cost (source)
  • The ongoing app maintenance cost for medium-sized enterprise app ranges from $5,000 to $11,000 per month (source)
  • Annual legacy costs can be up to 50% of the original app development costs. This means that if you spent $300,000 on your traditional app development, support and maintenance will cost your up to $150,000 per year!

The key is to understand how mobile apps are built and maintained and what is the relative cost, benefit and downfall of each option.

We want to introduce you to more efficient methodologies and tools to give you control, reduce risks and save you tens or even hundreds of thousands of dollars! We want to enable you to evaluate all your options and find the best app development solution for you.

How much does mobile app development cost? Let’s dive into the details so we can show you how to reduce your app development cost by up to 90%!

Use the BuildFire free app cost calculator to get an accurate estimate of how much your app will cost
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App Development Cost: Hidden Categories in the App Development Process

Before we get into the biggest hidden costs of app development, it’s important that you understand the mobile app architecture.

This is critical when you are looking for a vendor or talking to your IT department for help in developing, hosting and supporting your app. This way, you will understand what they are and aren’t providing.

Keep in mind that for most traditional custom app solutions, the majority of these services need to be purchased and assembled separately. They can be divided into four categories:

  • Functional services (SMS, Push Notifications, etc.)
  • Administrative services (to make updates to your app, manage users, etc.)
  • Infrastructure services (servers, CDN, etc.)
  • IT support services (updates to your app, bug fixes, etc.)

How can we estimate app development cost? Let’s drill deeper into each of these to see which individual roles they play in your mobile app costs. 

Functional Services

Functional services are those needed to execute the functionalities and features of your app.

While your developer may provide you with a certain functionality, it will not work unless you subscribe to a service that will provide a delivery mechanism. These services may cost hundreds and even thousands of dollars per month, and the number of such services you may need is almost endless.

Here are some most common examples of app development cost based on real features and services. You can use this information to help estimate the cost of your own app development project.

Push notifications. It’s hard to imagine an app that does not utilize this essential mobile capability. Push notifications increase your users’ engagement with your app and encourage the desired action, such as a purchase. If you want push services, you will need a service like UrbanAirship or PushWoosh.

Annual cost: $2,400

Social and chat. You will want to use these services to encourage sharing and upvoting your content through social media. If you want social interaction in your app, you will likely require a subscription to a service like one-to-one chat, group chat and bot integration, provided by Applozic and SendBird.

Annual cost: $1,200

SMS. To integrate SMS messaging into your mobile app, you will have to use a service like Twilio.

Annual cost: $500

Email. To integrate email feature with your mobile app, you will need a service like Mailgun or Sendgrid.

Annual cost: $1,000

Administrative Services

Plain and simple: you need an intuitive, powerful, accessible and user-friendly administration dashboard.

As a creative professional, you want to be in control and avoid calling the IT department every time you want to access your data or update content.

These costs are the most difficult to anticipate as they will largely depend and differ based on each individual app. However, just like with all the other app costs – they do add up and you will incur them on an ongoing basis. The traditional app development solution doesn’t offer a way to save up on these costs. Simply not including these in your app management isn’t an option as it would take away your control over the content, users and data.

Luckily, this isn’t the only way to develop and maintain an app, and we’ll cover the method to prevent these costs further below.

How much does it cost to build an app? Consider the following essential dashboard features:

Content management. Changing content should be as easy as click and edit. If you can edit a Word document, you should be able to edit your app content – this capability is a must for your dashboard.

Dashboard emulator. You will definitely want to see how changes you make look on the app before pushing them out live to the user community. A previewer app is a must!

Functional services management. Separate dashboards for each of your services are very impractical. Capabilities like monitoring social behavior and sending push notifications, emails and SMS are vital for your app, and routine tasks of managing these services should all be available from a single dashboard.

Dynamic updates. if you are like most app owners, there will be constant updates – it’s the nature of business! Some apps require an elaborate resubmission process every time a simple content change is made. Ensure you build in a dynamic update process whereby a simple click of a button on the app dashboard pushes out the content changes to all apps automatically.

User profiles. You’ll need a way to manage your users’ profiles. Details like password reset forms get easily lost in the design process – a good designer won’t let it happen!

Analytics/event collector. Do you want to be able to understand your users’ in-app behavior, like the activities taking place in the app, the number of downloads, which users access which screens, and more? This information should be easily accessible.

Access controls. It is unlikely all administrators or users will be the same. You will want to control roles and permissions to manage who can access and change what within the app. This also includes what users can access; what screens they see, their private user information and/or access to premium content.

Data segmentation. You will want to classify users into different categories based upon activity, profile and other parameters. This is useful for messaging and push notifications to users based on a segment they fall into.

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Infrastructure Services

These services include infrastructural components such as where the app is hosted, where data is stored and how the data is delivered. All of these also need redundancies and load balancers for backup and security servers, which add both the cost and complexities.

Servers. These are the basics – servers are where will the app be hosted. Unless you are with the largest of enterprises, you will want to outsource hosting to the likes of Amazon, Google and Azure.

Annual cost: $12,000

Data storage. Data is king, and your app will collect and contain a lot of it. It is crucial that you understand how and where the data will be stored.

Annual cost: $3,600

CDN. A content delivery network (CDN) is a system of distributed servers that deliver content to the app based on the geographic locations of the user, the origin of the content and a content delivery server. In short: if you have users all over the world and they have to keep coming back to one far off location to access content, the app will perform poorly. CDN services are provided by companies like Akamai, CloudFront and Dyn. These aren’t app development companies, but still provide crucial services that impact your development costs.

Annual cost: $3,600

Images data. Most apps use a lot of images. You will need to have a place to download, process (resize, crop, etc.), and deliver images. Such services are provided by companies like CloudImage.io, Google and ImageX.

Annual cost: $4,800

App development tools, libraries and support. If you’re using paid deployment tools like IBM MobileFirst, Kinvey, Kony or Appcelerator to develop your apps on, you will need to subscribe to it over the life of your app.

Annual cost: $1,200-100k+

IT Support Services

While these services aren’t an actual part of the app architecture, ongoing technical support is the critical component of any app deployment and it may account for large costs over time.

Your resources should always enable you to address the following:

iOS and Android updates. Both platforms constantly release updates, each requiring maintenance; sometimes significant.

Annual cost: $10,000

App update submissions. Even if you have a dynamic update process, there will be times when updates require resubmission. This is not trivial.

Annual cost: $2,400

APIs. Every app usually has multiple third party APIs they interact with, especially at the enterprise level. Changes to any of these applications will require periodic app maintenance of your APIs. For example, Facebook updated their API version 4 times in 2016; if you integrated with Facebook, you would need to update your app to accommodate those changes. Additionally, over the lifetime of the app, most enterprises will expand the number of applications an app interferes with over time.

Annual cost: $5,000

Bugs. Every app has them; sometimes they go undiscovered for months or even years. User communities are not kind to apps that are slow to address the issues they report.

Annual cost: 10-20% of total app development budget.

Maintenance costs (Dev Ops). We’re talking about IT-specific maintenance costs for infrastructure: servers, data storage, CDN and image data will all require some level of monitoring and maintenance.

Annual cost: 20%+ of total app development budget.

10 Biggest Hidden Costs of Mobile App Development

You now know the components of app development and the average cost of each. Let’s look at the ten most expensive ones!

10: Social & chat integrations – $1,200/year

9: App development tools, libraries and support – $1,200/year (minimum!)

8: App update submissions – $2,400/year

7: Push notifications – $2,400/year

6: Data storage – $3,600/year

5: CDN – $3,600/year

4: Images data – $4,800/year

3: APIs – $5,000/year

2: iOS and Android updates – $10,000/year

1: Servers – $12,000/year

Does your plan to develop and maintain a mobile app include these costs? Do you have the budget to cover for these? Do you have the extra budget to ensure you can cover any unforeseen bug fixes and developer hours?

These costs can also grow exponentially based on the growth of your app, the integrations you add over time, the increased data requirements and additional features.

Your growth will keep costing you more, and it will get more difficult to predict your app’s expenses and plan your budget. You can’t help but ask – is there an easier way?

Other App Development Costs

Beyond the hidden mobile app development costs discussed above, there are lots of other factors that need to be accounted for to calculate your total app cost. Some of these are associated with the mobile app development process, while others go beyond the scope of the basic app development stages.

How much does it cost develop a mobile app? Here’s what else you need to know about developing mobile applications:

  • Who is building the app? (professional app developers, app development companies, freelance app developers, in-house development team, third-party app development team, etc.)
  • What platform and app stores will the mobile app be available on? (Android app, iOS apps, etc.)
  • How much app maintenance is required for your app post-launch? Will you handle app maintenance on your own? Or will app maintenance costs be handled by a third party?
  • The development cost of a complex app will be more expensive than the app cost of a simple app.
  • The app cost of an internal app for business use will be different than the mobile app cost of consumer apps. If other app users will be downloading the app and it’s competing with popular apps on the app stores, your app cost will increase as well.

How to handle hidden costs of app development

The key issue with mobile app development cost is the amount of individual components you need to assemble. Each of them costs hundreds or thousands of dollars a year, and these costs will continue throughout the life of your app.

This is what prevents so many businesses from developing an app that will help them do their work better, and it’s the exact problem we want to solve.

Remember: agencies and developers will quote you the full cost of the mobile app development, but this will exclude the ongoing support or software costs.

You’ve seen in our mobile app development cost breakdown that these costs grow into the most expensive items in your mobile app budget, continuing for as long as your app is available.

Enter your only way to reduce these hidden costs: a mobile app building platform.

How BuildFire reduces your app development cost by up to 90%

The overarching advantage of building your mobile app with BuildFire: we incur all the above costs for you. You only pay us a fixed monthly subscription, which gives you access to all the features and abilities to develop, deploy and maintain your mobile app from a single dashboard. You won’t get this benefit with a traditional app development company or a freelance mobile app developer.

What does this mean for you? It simply means you will never have to pay the high costs of infrastructure and code maintenance, analytics, or expensive developer hours for a simple code fix. With a monthly subscription, you will always know your monthly app expenses without the fear of high additional cost for changes and updates.

And this is just the beginning! Let’s look at some more benefits that will allow you to grow, scale and stay ahead in your business.

Use of any of our many pre-built plugins (app features).

Our plugins are fully functional features that you can simply plug-and-play into your app. They contain functionalities and integrations that allow most of our customers to build 90% of their app without any custom code!

Our plugins are also open source, so you can customize them as much as you need to adjust them to your needs and use cases. You’ll never need to compromise in order to fulfill your app’s purpose.

All devices are covered.

As opposed to native app development, you will only need a single app to work across iPhone  Android phones, as well as iPads and tablets. Not only does it costs less, it is also incredibly less time-consuming to develop and maintain one app over two or three different versions.

As a creative professional, you are in full control.

Accessing data and updating content shouldn’t require a constant contact with your IT department or expensive developer hours.

With BuildFire’s intuitive, powerful dashboard, you can easily manage your content, preview any changes you make, manage all functional services, access analytics and user profiles, segment data, and so much more.

You can scale infinitely.

In traditional mobile app development, each new app you want requires an entirely new project, budget, and many months. You will again incur those same infrastructural costs, and you will essentially need to go through the entire process again (and again, if you need even more apps!).

With BuildFire, you can use the same platform to maintain multiple apps. No extra infrastructure or legacy costs, and no support nightmares.

And if you want to replicate an existing app you built on BuildFire? It is as easy as a couple of clicks. A great example of this is creating an event app and wanting to use it for multiple events, or an HR app that you want to use across multiple divisions of your company. The scalability opportunities are endless!

Final Thoughts on App Development Cost

So how much does it cost to make an app? There’s no single answer to this question.

App cost varies based on things like app complexity, the scope of your app idea, app design, app functionality, app development timeline, building on multiple platforms, and more. Are you using an in-house development team or hiring a custom software development company? Are you building Android and iOS apps? Or just an iOS app? Native apps might cost more than a hybrid app. Complex apps cost more than a basic app.

Are you going to hire a project manager for your software development project? How big is your app development team?

There are other factors that must be taken into consideration for your app development cost estimate as well. This goes beyond app development and includes things like new features, in app purchases, app analytics, app marketing to attract app users, app testing, and more. All of this impacts the cost to make an app.

Fortunately, there is no app that can’t be built on BuildFire. Unlike a basic mobile app development company, BuildFire has everything you need to develop an app on your own. 

Whether you’re looking to create a mobile app to improve your business internally, provide a resource for your audience or clients, grow your brand awareness or increase your revenue, BuildFire simply makes more sense from a cost, scalability, and convenience perspective, both immediately and in the long run.

The best thing? You can start building your app today and try our builder completely free. Get creative!