How Much Does It Cost to Make an App for Your Business?

App development costs are always among the top concerns of app builders, whether they make an app in-house or outsource it. How much does it cost to make an app? Is the figure fixed or variable on different projects? In this blog post, we’ll help you envisage how to calculate app development costs and how to optimize spending on app building.

When it comes to the cost of building an app for your business, there are many factors to consider. The cost of your app will depend on a number of factors, including the features you want, the complexity of the app, the time you want to take to build it, and the size of your business. 

It’s important to consider everything you need in order to make the app successful. This includes how much money you’ll need to complete the project, how much your time is worth, what the benefits are to building an app, and how much the app development cost requires.

So how much does it cost to develop an app for your business? Find out with this handy guide.

Benefits of Building an App for Your Business

Building an app can help you reach a much wider audience, grow your customer base, and provide more opportunities for growth. The benefits of developing an app for your business are endless, and here are some of the reasons why you should be considering creating an app for your business:

Increased brand awareness: Your app will increase brand awareness, and this will create more opportunities for you to market your business.

Growth in the product: With the creation of an app, your company can create its own service or product, like in-app purchasing, or offer a service or product on a subscription basis. This means you’ll be able to expand the number of services you offer to customers, thereby creating more business and revenue opportunities for your business.

Benchmarks of App Development Cost

The price to develop an app can range from $38,000 up to $300,000+, depending on the type, number, and complexity of functionality and design. At 40$/hour, the typical cost is around $38,000. 

How is App Development Cost Estimated?

Depending on the project you are trying to complete, you will want to budget accordingly.

An app for a chain of businesses might take up to two weeks to develop. But, for an app for a local business, it can take up to a month and a half.

Some businesses do not want to bother with the work that goes into building an app. If this is the case for you, then you might want to look at hiring professionals to help you out.

Identify What Type of App You’re Building

Before you begin the development process, you need to figure out which kind of app you’re creating for your business.

If you’re building an app to run through your mobile device’s app store, then you need to look at app market prices from major app stores like Google Play, Apple App Store, and Amazon App Store. If your app is a utility application, then it’s a different story. These apps are usually free and most people don’t even think about the cost to develop a utility app.

When it comes to utility apps, there’s no one-size-fits-all type of development. This is why you’ll need to think about your options and how much money you can afford to invest in the app development process.

Recommended reading: Mobile Web App Development: 2 Things You Must Consider First

What Influences the Cost to Develop an App?

There are many criteria influencing an app’s cost. First of all, an app itself constitutes multiple software and hardware features, thus little wonder that its expense will be under profound impacts of designing and developing these functions:

• Type of app (e.g. eCommerce, social networking, or video streaming);
• Visual design and objects such as 2D or 3D graphics, animation, or wireframes;
• App functionality like user profile, push notifications, social media sharing, third-party integration, or data security;
• Supported platforms (i.e. iOS or Android), devices, and other hardware components (e.g. the phone’s camera).

However, the real app development process isn’t only limited to such components. The total cost accordingly extends to other crucial factors including:

• Problem detection and solution;
• Maintenance and upgrades;
• Industry maturity and business scale;
• Those involved in the development team – normally a business analyst, a project manager, UX/UI designers, programmers, and test engineers;
• Internal or external hiring and hourly rates by region;
• Marketing and advertising after the product launch;
• License for software used to build an app;
• App store fees.

Each deliverable consists of unique attributes, hence accompanying different costs. To answer the question of how much your company must pay for an app, you need to determine which properties your app includes.

The Factors that Influence the Cost of App Development

The price of developing an app is determined by many factors, such as the features and complexity of the app, the time required for development, the business model that you want to follow, and the size of your business.

Most app developers are in the software development field for one reason: to make a lot of money. To reach their goal, developers will have to make decisions that cost money. One of the most common costs you might incur is for developers to work on an app when it’s idle.

This cost might be based on the amount of time a developer spends working on an idle app project.

1. Native vs Hybrid

Native app development is a term used to describe apps that use code that is written specifically for an app. This means that you’ll need to purchase the app development software or product, and it’s an integrated approach that generally requires less coding than a hybrid app. This means that many experts believe that native apps tend to be easier to develop and are cheaper to develop, but that hybrid apps are more flexible.

Hybrid app development, on the other hand, refers to apps that use a mix of native code and HTML.

2. Android vs IOS

When it comes to the cost of app development cost, there are certain things that will matter more than others. When it comes to developing an app for an iPhone, Android, or iPad, the app developer usually takes the biggest cut. However, as we are all used to the iOS vs Android debate, let’s dig a little deeper into the differences.

3. Outsourcing vs In-House App Development

One of the main factors to consider is the size and complexity of your business. A smaller business will require a lower cost to build an app than a larger business. However, the time you will spend making the app will also differ. On average, it will take your business 1-3 months to create a quality app with little risk.

By comparison, a large company with a higher production value will take 2-3 months and, once the app is launched, will take the company time to recoup the costs.

As such, the cost to build an app for your business can be much higher for a small business.

4. Other Budget Things to Consider

There are also other factors that can impact the cost of building an app, such as the size of your team, the complexity of the app, and how much support you want or need.

Recommended reading: How Can Outsourcing Developers Help Your Business?

An Overview of the Average Cost of an App

Before calculating the average cost of creating an app, you should determine who conducts the app development project (i.e. in-house employees, outsourced developers, or both). Inevitably, provided the internal workforce has sufficient experience to handle a whole project, you will save more money from full outsourcing.

In case you outsource the app project, the average cost can be estimated based on which pricing model you prefer and how much of the development procedure your team can tackle. There are some common options in the outsourcing market as follows:

• Fixed price: Before the project is underway, you will determine app development costs. This pricing structure is accordingly suitable for small-scale projects within a specific development time. The total cost is often based on your company’s requirements and estimated timeline. 

• Time & material: Following this model, your business has to make a payment based on hourly rates. Therefore, it best suits complicated projects whose criteria are hard to identify at the beginning and possibly modified during the process. The total hours of each development stage will be estimated and then multiplied with an hourly charge. 

Even when your company augments some external employees or freelancers to handle some parts of a project, the same payment method is also applied. Besides, the cost of hiring a developer will vary across countries as illustrated below.

Moreover, you should count marketing costs and other expenses incurred out of a negotiated contract when calculating the total app cost.

How Much Does It Cost to Make an App?

Business of Apps, the leading news and analysis website for the app industry, collected data from numerous companies about how much their customer projects need. The estimated range of spending on app development below is based on the complexity of projects:

• Simple app development project: US$40,000 to 60,000;
• Averagely complex app development project: US$61,000 – 120,000;
• Highly complex app development project: US$120,000 at a minimum.

These findings, however, are not the same in many other companies. According to the 2015 Clutch survey, the total app development cost for complex functionality might reach US$727,500 provided the average hourly rate was $150. Meanwhile, other firms report that a large project with complex app development, design, and support for at least two platforms may be at least US$300,000. 

Inevitably, it’s hard to conclude an exact figure because how much your app project truly costs depends on the mentioned criteria. The given figures are just approximate for your company to have an objective view of app development costs in the market now. 

The Cost per Stage of Mobile App Development

To clarify how the given figures are gauged, we need to break down the big question “How much does it cost to make an app?” into smaller questions. Particularly, the app development process includes various important phases (i.e. Planning, Design, Development, Testing and launching, and Maintenance and upgrade); understanding how to charge different components in each stage will help you have a ballpark calculation of your potential app cost. 

1. Planning Stage

In this phase, both your company and an app developer will define project complexity, scope, and other unknown criteria such as client-owned APIs. Even when you have no experience with app development, it’ll take more time to do market research on your own or with the support of the vendor. This helps your company determine whether an app can be a good vehicle to reach your goals. Apparently, those factors act as major determinants of the app planning cost.

According to the 2017 Clutch survey, the average cost of this phase was no more than US$25,000. Of which, over half of the surveyed companies said that they spent less than US$5,000 on discovery and research components.

2. Design Stage

This app development phase involves designing an app’s visual architecture. This can be done through the following major tasks:

• Identify your app’s platform based on whether you prefer a native or hybrid app. The former is separately designed for either iOS or Android, while the latter incorporates components working well on both operating systems;
• Focus on UX/UI design that both meets user demands and complies with App Store or Google Play’s guidelines;
• Determining the number of pages and screens where your app will be displayed;
• Building the app’s wireframe that draws up the app layout.

This phase proves important because it’ll decide how attractive your app design may be to end-user retention and usage rates. The design cost depends on the project’s complexity and your design’s flexibility as well as aesthetics. 

Below is an average range of the app design cost accumulated by Clutch:

3. Development Stage

Major drivers behind the app development cost are often the number of developers engaging in coding tasks and functionality in terms of its complexity, type, and quantity. Apart from fundamental features such as user login or user engagement, advanced functionality as follows also contributes to pushing the development cost up:

• Payment systems;

• App management such as performance monitoring and data analytics; 
• Infrastructure components include data storage, data encryption, third-party API integration, cross-platform sync, scalability, and more;
• AI or ML technologies.

The more advanced components are integrated into your app, the longer this stage lasts and the higher the development cost is charged. 

4. Testing and Deployment Stage

After the development phase, quality analyses will be manually or automatically conducted to detect and correct faults. The duration of testing mostly hinges on the app’s complexity and large amount of functionality. Accordingly, highly secured apps or interactive games require more time, hence accompanying higher costs. 

Once your team has completed testing, an app will be ready for uploading to the App Store or Google Play. Normally, those stores also offer a licensing service to help you limit unauthorized or inappropriate access to your app. This will undoubtedly come with additional fees.

You should distinguish this licensing cost from the one you must pay for technologies or tools used during the design and development process. 

5. Marketing and Maintenance Stage

No app is perfect with its first version, regardless of a huge investment in the initial project. Therefore, frequent updates and maintenance are essential to keep users engaged in the app and attract new customers. The maintenance cost may relate to hosting servers and even analytic tools. 

Marketing is needed as well to make your app renowned by the public. Cost Per Install (CPI) is among the most popular means to advertise the app. Accordingly, developers will put an advert on different media channels at certain prices to drive new installations. For example, placing an ad on iOS games costs US$4.3 per install whereas this figure is only US$1.15 on Android games. 

The 7 Tips That Will Save You Money on Your App

Optimizing costs on an app yet guaranteeing its efficient performance and appeal to end-users are always the ultimate goal of any company. Here are some common tips to help your company save money in app development:

1. Determine how much of the development process to conduct internally

Instead of full outsourcing, many business owners let their internal team handle several pieces they excel at, for example, planning and design, to keep the costs down. 

2. Choose a dedicated developer

Whether your app involves a short-term or long-term development process, you always need a dedicated team that is willing to support the deliverable even after its launch. Lack of assistance from the developer will come with additional costs, especially when your app has problems like running sluggishly. 

3. Grasp your business needs

No app developer may read your mind, hence struggle to build proper solutions unless you give a vendor detailed requirements and specs about a potential app. To do so, you should understand your company’s existing problems, end-user demands, and even competitors’ digitalization strategies. 

4. Keep your app simple

It’s more advisable to focus on several core functions that bring your users the most value and make your brand stand out.

5. Consider the responsive design and cross-platform functionality

The responsive design facilitates smooth app performance across devices of all sizes. Meanwhile, cross-platform apps can be compatible with both iOS and Android. So these solutions prove more economical than developing apps separately for each operating system.

6. Communicate with the team

Frequent interactions between your company and the outsourcing team are necessary to avoid misunderstandings that delay the whole work and incur extra costs. 

7. Test your deliverable thoroughly

End-user dissatisfaction with faulty products may directly affect your company’s revenues and even reputation. Also, debugging afterward costs you more. Therefore, testing should be done carefully before the product launch. 

Conclusion

At first glance, it can appear that the amount of money needed to develop an app for your business doesn’t add up. But when you break it down and look at the more holistic view, it becomes clear that it is possible to create a successful business app for as little as $10,000.

We hope that this post will help you create the perfect business app.

How much does it cost to make an app? The answer relies much on a wide range of components that arise in different app development phases. The mentioned figures in this article are only for reference. So you should work closely with an IT service provider to produce a more precise estimate.

With this latest technology now available, it is a much better option for you to switch to Designveloper. We offer all of the services needed for any size business and more – from web development to mobile application design, and consulting. We are here waiting for your call! Give us a call today if you want an estimate or just some advice on how we can help your company with these new developments in technology!