App Development Cost: How to estimate the budget?

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So you have this neat business idea and a website to match. You know your market, your customer and updates needed on your product/service. You have it all under control. And the next natural step is to have a mobile app presence. Before you plunge into the world of software development house, you would definitely do a double take around! What with amazing features and capabilities demonstrated by competing businesses, your conflicts on cost estimation are well founded. What is the mobile app development cost? How much money do you need before you start development?

That is the question of the tech world. The digital consumer is no longer appeased by a macho website. They need to own your app! Combing through your app should happen with minimum efforts (clicks). Users need to know what you have in store at the very first glance! How is that possible, you may think. At the very first glance? How can you attract and retain your customer with your first impressions? Let us tell you that this is not only a possibility, but it is also a requirement. In this article, we share with you the reasons why you need certain features in your app and how the cost is estimated and justified.

What to consider?

Before you fret over the general app development costs, let us review with you the basic app features that make move your app up the favorites chart. A business app in general has the following features:

  • Basic controls: The button and menu options available and their organization on the mobile screen. The colors, the theme, the logo the business byline location etc. In short, the business app differentiation and identification features.
  • Data storage: How much storage space the app would need on the consumer smart phone. Remember, your app functionality determines the storage volume needed. The aim is to optimize all smart phone resources to illicit the best possible functionality.
  • 3rd party integration: This implies to the development and testing phase of the mobile app in which heterogeneous and disparate applications and systems are united to create a harmonious whole.
  • Access to enterprise data: The capability of the mobile app to access core business data, as and when updated.
  • Data encryption: Security and accessibility capability of mobile applications that have multiple user-levels defined.
  • Scalability: This helps your app to maintain its integrity. Think about these issues covered from a scalability app development perspectives: Maintain a good user experience, managing massive user traffic, efficient resource utilization, test and improve experience before users complain and finally a higher ROI.

So what’s the app development cost of an average mobile app?

Let’s get down to your burning question. We had to justify the cost before we explain the cost distribution. First things first, the fundamental cost of a mobile app is derived by the labor required to build it. Hiring a trusted, offshore software development house is cheaper than a local company. And hiring a freelancer to do the same job is definitely cheaper but may cost you a lot more in the end when your code doesn’t meet the standards. You can cut down the app development cost but if you go for the cheapest option, you will probably waste the money.

A decent estimation of a mobile app could range somewhere between $5,000 to $500,000. The price range could also be somewhere between $100,000 and $300,000, with the entire development process taking 12-20 weeks. And as the app development industry convention goes, your developer is very likely to charge 20% over budget.  Now before you lose some nerve over this hefty cost, let us tell you that you can certainly economize your spending based on the following four cost-effective factors:

1) Hire Wisely

Often software development companies lack complete personnel that make up a development team. Sometimes, these companies have some members located off-shore. While this may not be a very un-ideal situation, but knowing about your development team can help you communicate better. Request information on all team members and also ask for their past projects to evaluate. Try to determine the kind of similarities you need in your own app in these projects. Ask about the team’s development resources. An in-house engineer is ideal for a solid design phase for your app. An expert in this phase is critical to avoid problems in the future. A hybrid approach where the design team is local and the development team is off-shore may work only if the engineers and technical project planners are experienced.

2) Select a Development Cycle

There are two development cycles to choose from: Waterfall development and Agile development. A very distinct, clear and complete documentation is laid out and implemented in the Waterfall development cycle. This is done before the process begins. A complete plan is created and followed as strictly as possible. Whereas, in the Agile development, there is barely any documentation before starting development. The code is designed and developed “on the go”. It is modified to suit the requirements of the process.

A combination of these two approached is the Iterative Development cycle. The code is designed and developed in increments. Wireframes, presentations and storyboarding is used to communicate ideas periodically with the customer.

Choose a development cycle based on your needs and priorities. Flexibility in terms of design and a faster development date is an idea development cycle.

3) Decide on your Payment Options

We discuss in detail on a fixed-fee over time-based materials revenue model in more detail in the next article.  Do you want to set fixed-fee payment plan or a flexible, resource-based payment option? Before setting up a payment option with your development company, ask a few questions. Are work orders billed at the same rates? What is their hourly rate? How many of their projects have work orders? How much is the original contract versus the cost with work orders?

Note that the choice of your development cycle will also affect your payment option. An iterative cycle will require you to pay in increments. A waterfall cycle maybe related to fixed payment option. An agile development cycle may demand a time/resource-based payment.

Most people think that a fixed fee payment plan is the best option. A word of caution here: fixed payments sometimes compromise the creativity and potential of a developer.

4) Estimate Creation

Estimate creation for a project is an art. Estimates are created by software development firms. When you receive an estimate on the cost of your app, ask a few questions before agreeing.  Who made the estimate? Does that person have know what your core requirements are?  Have they worked on similar apps and used similar technologies? If the technology requirements are new for them, it is possible to estimate incorrectly.


We hope these four factors will provide you with enough confidence to plan and execute your mobile app development project. These factors will not only make you look well-informed in the eyes of a software development house, but will also help you manage your app development cost. Remember, a mobile app developed with careful cost estimation research is well worth the investment.


Don’t forget to read our previous article on what you will need before talking to a softwarehouse! Click here to read

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