Are you a business owner or a department manager and are uncertain if your business would benefit from having an app? Or you already have a rough idea for an app but are not sure how much it would cost to develop it? We have the answers to all of your questions concerning the benefits and the costs of developing an app.
Here is what we will be covering:
1. Does your business need an app?
2. What is the average cost of app development?
3. How are app development costs estimated?
4. What influences the app cost estimations?
5. Additional and hidden costs of app development
6. 6 tips for reducing the app development costs
Does your business need an app?
From all the experience and insights we gathered over the years, it is a clear yes, but let us look at some facts. Mobile business apps have become a necessary part of all businesses, regardless of their industry or company size.
By using apps in your business, you can be more productive, have more engaged employees, and generate more revenue.
Here are some of the reasons why your B2B company might need an app:
- To manage internal processes more efficiently and coordinate your business in a centralized way (think of a management app)
- To speed up production or optimize performance
- To equip employees with the right tools and information (employee disengagement with software results in a $550 billion cost of lost productivity in the US alone!)
- The app can be a solution for a problem you have been experiencing in your business
- To help you stand out from your competitors
- To help you engage with your customers and stakeholders in order to drive sales and build your brand and a customer base (this might be as simple as a communication app for your customers to book appointments instead of calling you etc.)
- For monetizing the appin order to get additional revenue
As you can see, apps are not limited to B2C anymore.
According to some reports (Business of Apps), the average company today has more than 10 internal and customer-facing apps. Also, 78% of B2B companies believe mobile apps to be the future of their industry.
This shows that digital transformation is crucial for staying competitive and making sure you do not lose customers to more digitalized competitors.
What is the average cost of app development?
By now, you probably realized that you need an app and how it would benefit your business, but now you want to know how much this might cost.
Giving an answer to this question is extremely hard because an app cost estimate depends on multiple factors and they all impact the final price.
These factors are the time needed for development, type of the app, app functionalities, implementation costs, and maintenance costs.
According to Clutch (2017), the minimum cost of app development is between €5000 to €10,000. However, this is really the minimum price and the typical costs are often higher.
Goodfirms (2018) investigated the average time and costs of building some successful apps and came up with the following estimations:
- Simple app (MVP version of Tinder): €35,000 to €50,000
- Medium-complexity app (QuizUp): €50,000 to €56,000
- Complex app (Uber, excluding routing algorithms and size): €57,000 to €85,000
- Enterprise app development: around €115,000
As for the app development timeline, over 80% of mobile apps take 3 or more months to get developed, while 40% of apps are done in 6 or more months.
As you can see, the prices and the time it takes to develop an app vary according to the size and the complexity of the app.
These numbers represent rough estimates and the best way to find out how much your app development will cost is to ask your tech vendor for an estimate.
If you would like to get a free estimate, along with design, technology, and project management advice, as well as next steps for your project, book a free team call with UHP’s experts and let us discuss your project idea together.
How are app development costs estimated?
Here is the basic formula used for calculating the costs:
Hours of work x Price per hour = Total project costs
What impacts the development time?
You are surely wondering what exactly impacts these hours of work, so let us explain it.
The main app cost driver is the number of features you would like to implement and their complexity. So, these two factors decide how many hours it will take the project team to develop your app.
If you are building a small app or an MVP with must-have features only such as login, product list, etc. it will take the developers less time to build it, while features such as custom UI components, tablet support, API’s and integrations, and maintenance require more hours of work.
And what impacts the price per hour?
The two most-often used models of pricing are Fixed Price and Time&Material.
If you choose the first one, you agree on a fixed price for the project. This sum is not usually adjustable and it works well for small projects.
However, when it comes to larger or more complex projects, this option might not be the best one to choose since a fixed price means that additional features and introducing the often-needed changes is not preferable.
The time&material is most often a better option since you are charged for the actual number of hours spent on the project.
This model then allows flexibility, changing requirements, and is suitable for dynamic projects with a larger scope.
Even though this formula seems simple, there are many factors that influence the development price and make it more complex to determine the price.
As already mentioned, the average development price can be anywhere from €20,000 up to €85,000+.
We will now give you a complete breakdown of all the factors that influence the app development cost, so that you are aware of how all of these influence the final cost.
What influences the app cost estimations?
Here are the most important factors that influence the cost of app development.
1. Type of an app according to its use:
Most of the apps serve one of these three purposes:
- Production/process apps: developed for a specific purpose on a special operating system and mostly used by company employees (e.g. app for tablets for scanning merchandise or products)
- Internal company apps: used to optimize, simplify, or upgrade some internal company processes and are also often developed only for a specific operating system (e.g. sales app for sales teams; app for uploading data to a database, etc.)
- Consumer apps: apps intended for wider audiences for downloading on smartphones, programmed for all operating systems like iOS and Android (Facebook, Twitter, Whatsapp, etc.)
2. Type of an app according to development approach:
This is one of the factors that will also influence the final development cost.
There are a couple of options to choose from, depending on your needs:
- Native app: If your app follows the guidelines of one specific operating system (iOS or Android), it is called a native app. However, if you need the app for both iOS and Android platforms, then you will need two separate apps - one for each platform which in turn increases the development costs since you need two separate codes.
- Hybrid app: hybrid or cross-platform apps work across different operating systems, meaning one code works for all platforms (and that in turn saves you money). However, they are less optimized and are lacking access to certain native APIs, so most of the software development vendors recommend the native approach. Flutter and React Native are examples of hybrid development approach.
- Web apps: Slack, Trello, Google Docs...these are all web apps. Web applications are accessed through a web browser and are usually developed to solve a number of tasks and complex problems.
- PWA web apps: A progressive web application (PWA) is a type of an application software delivered through the web and built using common web technologies. These types of apps can reach anyone, anywhere, on any device with a single codebase.
3. Platform type:
Is there a difference in cost based on the platform?
If you are aiming at developing your app for only one platform, there is no major difference in the cost or the time needed to develop it.
iOS apps used to be more expensive but recently, the costs, as well as the timeline, for both iOS and Android platforms have become almost the same.
However, it is important to know your audience before deciding on a platform. Are they more likely to use iOS? Or are they mostly Android users?
Based on your audience’s preferences, choose the approach that will suit you the most.
4. The number and the complexity of features and functionalities
Features and functionalities are the properties and tasks your app should have or fulfil.
The more features and the more complex they are, the higher the price of the development.
Simple features such as e-mail sign-up buttons, push notifications, and detecting the user’s location require less effort and therefore fewer developers’ hours.
More complex features such as logging through social media networks, payment-related features, streaming and broadcasting features, custom dashboards, complex workflows, and audio and video calls require anywhere from 60 - 360 hours of work and can cost can vary, depending on the hourly rates.
5. UX/UI (User Experience / User Interface) design complexity
Did you know that, according to Forbes, every $1 invested in UX bring $100 in return? And that 75% of people will judge an app or a website according to its design?
That is why UX/UI should never be disregarded or underestimated. Be it customers or employees that will use your app, they need to be the focus when developing an app and not your own wishes.
For example, if you are building an in-house app, its UX needs to be aligned with your employees’ needs so that they can complete their tasks faster, minimize errors, and be satisfied with the app.
When this fails to happen, employees are forced to look for workarounds which makes them less efficient and engaged.
Research (Intechnic) showed that companies whose employees are highly engaged outperform their competitors by 147% in earnings! Also, 70% of projects fail due to lack of user acceptance because of poor UX/UI!
Let us be clear, investing in design may seem to increase the final cost, as well as the hours invested, but these hours (ranging from 20-200+ hours of work) are very much needed.
If there is no design there are no rules, the are constant changes, and the project can go on without a clear end. This then incurs additional development costs, moreover, we do not have the ability to test the idea on users before implementation.
6. Software development vendors and their location
The location of your vendor can significantly influence the price because the average hourly rates differ from one country to another but also from one vendor to another (think quality and reputation here).
The range is pretty wide, too, from 25 to 250 Euro per hour, depending on the location and the quality of the production team in a certain company.
However, keep in mind that the higher price does not always mean better quality and you definitely need to do your due diligence here.
To get an idea of how to get started with this research and how to choose the best software development vendor, let us help you here.
Additional and hidden costs of app development
The development part is only one part of the app development process. People often overlook other additional development stages and requirements that also amount to the final cost.
Here are some of the additional costs that might not be obvious at first but should not be overlooked:
The discovery phase is probably the most important step in the development of any new product because planning and analysis are key for avoiding unnecessary costs.
The purpose of Discovery Workshops is to define project goals, features, target audience, budgets, and timeline, as well as minimize costs and potential risks.
The discovery process varies in length, according to your project size. Same goes for the price but the average price of this phase is between €4000 - €8500.
It usually takes us 3-5 days for the discovery phase here at UHP, depending on the complexity of the project, previously determined. We make each discovery phase tailor-made to fit your specific needs.
To learn more about this custom discovery process that we are proud of, keep reading here.
Deployment and app release:
After the development phase is over, it is time for launching and/or releasing the app in the market.
If the app is to be released in Apple Store or Google Play, here are the current prices:
- Google Play: $25 (one-time fee)
- Apple Store: $99 (annually)
- Apple Store - for an internal company app: $299 annually
If the development team is releasing the app, then you need to keep in mind the extra hours that will take them to release the app to production.
Maintenance and support:
Even if you are not planning on upgrading your app with new features, this is still a mandatory service that will require additional expenses.
This concerns future updates, bug fixes, code optimization, performance improvements, adding new features, and available expert team within SLAs.
App maintenance costs can amount to approx. 18-22% of the development cost. Usually, you can expect the maintenance costs to range from €4000 to €20,000 per year.
Also, it is worth mentioning that the maintenance cost is usually not included in the app development estimations. Rather, you can agree on this service at a later stage.
The costs of servers, libraries, APIs:
The cost of servers where the app will be hosted (storing content served to mobile application users), as well as the data storage costs can range anywhere from a couple of hundreds of euros up to a couple of thousands of euros, depending on the amount of data.
There can also be other additional costs other than the above stated ones (app updates, content management tools, image data, etc).
Keep in mind that the cost mostly depends on the number of components needed for developing an app and the number of functionalities it needs to have.
6 tips for reducing the app development costs
Here are some important tips that will help you save money and decrease development time:
- Start small - invest in an MVP, first to validate your project idea
- Choose a reliable software development vendor who has similar work in their portfolio
- Decide on one OS to start with or consider the promising Flutter technology if it fits with the requirements
- Find a vendor that uses the SCRUM framework and has an agile approach
- Have both design and the development done by the same vendor
- Focus on the newer devices, avoiding legacy devices, operating systems and browsers
This guide highlighted some of the most important aspects to consider when planning to develop an app.
Keep in mind that every app has custom requirements and that is why it is hard to give an accurate price estimation. In addition, the timeline to build an app also varies anywhere from 1-9+ months.
The total cost is mostly based on:
- Development approach and platform
- Number and the complexity of features
- UX/UI complexity
- Software development vendor’s rates and location
- Discovery phase
- Maintenance and support
After learning about all the factors that influence the final app development cost, you are probably wondering if getting an estimate for your project is even possible.
It is! We have designed a specific, risk-free 2-step process where you can get answers to everything concerning your project, from the idea validation to the cost estimate.
Contact us for a free team call with our experts or book a discovery workshop to kickstart your project development.
LIMITED OFFER: We are currently giving away 5 free 1-day discovery workshops (usual worth $4000). Contact us to secure yours today.24 Feb 2021