How Much Does it Cost to Make an App for your Business in 2022

If you’ve never developed an app before, the idea of building an app can be scary and daunting, full of unknowns. The cost of making an app can vary dramatically based on many factors. This article provides a guide of what drives the cost of an app. Here are 5  considerations:

• Features and Requirements of the App
• The Approach of Building the App ( Build vs Buy)
• Where and Who develops the App
• Special Skills Required
• Other costs not directly related to making the app

Features and Requirements of Your App

One of the biggest drivers of cost are the requirements. That is natural since, the more requirements there are, the more work goes into making the app. One of the most important things that will contain the cost of any project is to fully flesh out the scope of the work and lock down the requirements. If you don’t have a clear idea of what the app will do in great detail, that can lead to a lot of confusion, ambiguity and result in back and forth between you and the agency or team you are hiring. 

Good agencies can help flesh out the requirements if that’s not something you have nailed down. Oftentimes, that’s a must have, especially if you are serious about building an app and have a general idea of the cost.

Another cost driver is the different types of users this app is for. For example Airbnb actually serves two types of users: the guest and the host and although there is only one app, the app must be able to serve two distinctly different users with different needs, thus needing two sets of features. Another example is Uber, the ride sharing app. It serves the consumer, but the driver also needs an app to be able to take rides and pick up passengers. They’ve actually even gone as far as creating an app just for the driver. Thus there are at least two apps to be made in a business like Uber.

Finally, the last type of user that many businesses don’t even consider is the business itself. For example, Uber needs to onboard drivers, review their performance, and be able to pay them. Similarly, Airbnb needs to onboard hosts, respond to guest concerns, pay hosts, refund guests etc. An “app” for the business operations and the back office is usually required.

When most people say they want an app, they usually mean a platform. Youtube is not just an app. It exists in web, mobile, tablet, and even smart tv formats. This means that there are servers somewhere storing all the videos uploaded as well as all the user information, thumbnails, comments that users of the site post and all that is available on different platforms. 

Compare that to a simple calculator app. The calculator app is a standalone app that doesn’t communicate with the internet, has no notion of a user profile and doesn’t save any information to a database. You can see that building a platform like Facebook, Uber or Airbnb can be much more expensive than a calculator app.

How Much to Build vs Buy

Creating an app today isn’t like it was 20 or 30 years ago. There are so many software-as-a-service (SaaS) platforms that perform various features of apps that building them from scratch doesn’t make much sense today. For example, building an ecommerce website today could be as simple as starting a Shopify site for $29/month. Unless your app needs are so custom that existing platforms cannot address, we highly recommend you seriously consider searching and seeing if there’s something already out there that does what you need. Building an app from scratch will cost orders of magnitude more than licensing an existing SaaS solution. For example, if your customer data is stored in Salesforce, perhaps building a Salesforce app will make more sense than building an app from scratch that integrates with Salesforce.

Another advantage of building an app in 2022 is that so many features of modern day apps are already made available by many software companies. For example if you needed to build a chat app, or send SMS as part of one-time-password (OTP) verification, you can use a communication-platform-as-a-service (CPaaS) such as Twilio, MessageBird, or Nexmo. Features such as push notifications, video, authentication, payments, analytics are all available as software to be licensed. That doesn’t mean the cost of using them is zero. There is a cost associated with integrating or installing those services and instead of paying a huge upfront cost to build those features from scratch, typically you are paying a usage or monthly license fee.

Where is the Software Being Developed

One of the biggest cost drivers is WHO does the work? An agency with engineers based in San Francisco, California is going to cost much more than a consultancy in Bangalore, India simply because the cost of living is much more and the developers are paid more. 

The size of the organization can also have an impact on the cost. A larger organization will have more operational costs (in-house counsel, finance, marketing, etc) than a solo freelancer. A big consulting firm like Accenture is going to cost more than a small 5 person agency. 

Finally the reputation and maturity of an agency can affect cost. A more reputable firm that’s been around longer (and has more experience) will typically cost more than a new firm with no reputation or history.

Special Skills Required

If a certain skill is more in demand then it will cost more for that skill. Thus the cost of the app can also depend on what skills are required to build that app. Niche technical skills like Salesforce, Google Cloud, or Twilio can cost more because they require specialized knowledge of those platforms. Niche domain skills like cryptocurrency, blockchain, Artificial-Intelligence (AI), or Machine Learning (ML) can also command higher rates because a general app developer may not have those skills. It is important that any agency you hire has the requisite skills for the kind of app that you are trying to build.

Other Costs

Aside from the raw building costs (we include the planning, project management, design and development), there are a few other costs to keep in mind when budgeting for making an app.

Quality Assurance and Testing

Just like cars and machinery need to be tested before they leave the factory floor, software needs to be tested thoroughly before going live. Software needs to be tested in order to ensure that it is as free of bugs and defects as possible. Sometimes this is factored into the costs of development, but it’s good to make sure that it is included or budgeted for.

Software Costs

Think of software costs as the costs of raw materials in a construction project. The development can be thought of as the labor costs, but modern software is often built on top of other software. Data is often stored on Amazon Web Services, Google Cloud or Microsoft Azure. Depending on what you are storing, storage costs may also vary. For example, video takes a lot more storage space compared to text and the more videos users upload to your platform, the more it can cost. Services such as SMS messages (typically used for password verification, password reset, and delivery services), and push notifications also have associated costs based on usage. Other software such as analytics tools may have a monthly fee. Businesses often try to drive down software costs. However, it's just about trying to find a good balance between quality and quantity.

Ongoing Maintenance

Just like a building or a car cannot run indefinitely without problems, a mobile application will need ongoing maintenance or support. Software vendors might update their software development kit (SDK), necessitating your app to be updated. Platforms like Apple and Google might update how their operating system (OS) works requiring companies to update their apps accordingly. This happens all the time which is why you see popular apps like Facebook, Instagram, Whatsapp update their apps every so often. It’s best to allocate a budget of app development spend to ongoing maintenance. 

New Insights and New Features

When you are building a new app or software product, it’s important to realize that you will not know ahead of time all the features that a customer may want. It is only once they start using the product that they realize that this might be a good feature or that might be a good idea. Even the business owner might have a few of their own ideas once they start seeing the product take shape. Popular apps constantly release new features to keep their users sticky but also to keep up with the competition.

Conclusion

The app development cost can be a factor of many variables. Generally speaking, the more defined it is, the more planning that goes into the app, and the more you can document before engaging with a firm, the better it is in terms of getting an idea of cost. Figure out what software services you will need for your app. Factors like quality, reputation, geography, specialization will also highly impact the cost of your app. It’s also not a bad idea to get quotes from multiple firms.

If you need help finding the right team for your mobile app development needs, we can help you by matching and recommending partners from our network based on your needs.