Understanding the Real Costs of Mobile App Development

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.

Factors that influence app development

It’s important to know what you want before you get started.

I wouldn’t recommend jumping into the development stages without a clear plan, strategy, and goal for your app.

Here are some things to consider to get you started in the right direction.

• What’s the primary function of your app?
• What is your budget?
• How do you plan on building it?
• What kind of time frame do you envision from production start to launch?

You’ll also want to consider your launch strategy, so you can get downloads and even come up with a way to get ranked in the App Store.

So start writing a complete business plan for your app development.

This plan should recognize that there are different stages for developing your app.

You’ve got to plan and budget accordingly for each stage.

In order to make sure you’ve got enough money to pay for each stage, you’ll need to consider where your funds are coming from.

The last thing you want is to run out of money halfway through the project due to poor budgeting.

Then you’ve got a partially developed app that’s worth nothing and no way to get your money back.

If you own an existing business it may be easier for you to secure funding.

You can use money from your company’s checking account to pay for this.

You’ll also have more luck going to a bank for a loan and borrowing against the business to secure a line of credit.

For those of you that are planning to develop a new app as a startup company, you’ll likely need to raise money from investors unless you’re independently wealthy.

Jason Calacanis, a successful entrepreneur, and angel investor, recommends raising $750,000 to get started.

Don’t get thrown off by that number.

That’s not necessarily how much it will cost you to develop an app (although it might be).

Jason factors in paying for a small team to work on the startup company and other fees associated with operating a business, in addition to paying for development.

We’ll discuss the cost of paying employees shortly.

I’ve come up with a guide that breaks down the factors impacting the cost of mobile app development into six major categories.

• Overhead
• Complexity
• Server hosting
• Operation system
• Who builds it
• Type of App

I’ll go through each one of these factors and explain everything you need to know to get a better understanding of how much development will cost for your own unique situation.

Overhead

By definition, overhead consists of the indirect or fixed costs over running a business.

As I said earlier, your app is a business, so you’ve got to treat it as such.

I want to double back and finish the thought that we previously discussed regarding the payment of employees.

If you have an existing company and infrastructure in place, you may not need to hire anyone else to help you with your app.

You can work with your marketing team or IT department.

However, if you’re starting a business from scratch and launching an app with it, you’ll probably need some help.

The majority of startup companies have 5 employees or less.

So take that into consideration if you’re planning to hire people to help you with this process.

You’re going to have to pay these people.

Nobody is going to come help you for free unless they have some sort of equity stake in the company.

You’re also going to have to pay people to perform general maintenance on the app even after it launches.

The cost will depend on how much time and effort you’re expecting this person or these people to put into it.

Maintenance may very well be at least one full time position.

In order to build a successful app, you’re going to constantly make changes and improvements along the way.

Nobody’s app is perfect.

Even the highest performing mobile apps in the world have bugs and glitches that need to be worked out.

Your business won’t be immune to this.

Marketing and promotional costs would also fall under the overhead category.

What’s your company’s marketing budget for app promotion?

This is an absolute necessity.

Your app won’t get any downloads or make any money if nobody knows about it.

For those of you that already have an existing business, the promotion will be a little bit easier.

You’ve already got marketing channels set in place such as email, your website, and social media platforms.

Using those methods will help keep marketing costs down, but it won’t be completely free.

Promoting a brand new app from scratch without an existing business in place will be more expensive.

Complexity

How complex is your app?

Your answer will impact the cost.

This graphic displays how complexity can also impact the length of development in addition to the cost.

I think the graph is a little bit modest as well.

Some apps can even run up to a $1 million.

So how do you know if your app is simple, moderate, or complex?

Here are some basic differences.

App Complexit

y Features Estimated Cost Simple Basic features like email subscription, social media login, calendars Up to $40,000 Moderate Customized UI, payment acceptance, API integration, adaptable for headsets and tablets, back-end server Roughly $80,000 Complex Third party integration, multiple languages, customized animations, complex back-end, real-time results $150,000+

So take a look at the structure, features, and functionality of your app.

See what category it falls into.

If you’re just looking for something super basic with minimal features, you can get develop it at a low rate.

But for those of you that have a more intricate design, the complexity is going to be more expensive.

Server and data hosting location

We briefly touched on this topic in the last section, but it’s worth going into a greater discussion about it.

Operating system to develop on

The operating system also factors into the price.

There are pros and cons to both hybrid and native app development.

Aspect	Native Apps	Hybrid Apps
User Experience	Optimized for performance	Not as optimal
Cost	More expensive	Less expensive
Platform Support	Better for single platform	Better for multiple platforms
App Store Visibility	Easier to find	Varies
Examples	Entertainment, Educational, Business apps	Lifestyle, Communication apps, Simple games

Native apps focus more on the user experience.

They work fast and are optimized for performance.

You can also process lots of features at the same time if you have a native app.

Depending on how many different platforms you want to support, native apps will be more expensive.

Native apps are also easier to find in the App Store and Google Play Store.

Some examples of different types of native apps include:

• Apps for entertainment
• Educational apps
• Business apps

Hybrid apps are better for multiple platforms and devices.

They use the same code for each platform, so generally, it’s less expensive to launch a hybrid app.

The user experience isn’t as optimal for hybrid development.

If you have a small or medium sized lifestyle application, communication app, or simple game, you may want to consider developing a hybrid app.

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