Building an app for your business or enterprise makes a lot of sense as 90% of the time spent on mobile devices is spent in mobile apps. People prefer to interact with apps, and smart businesses meet people where they are. But how do you manage your budget when building an app? How much should you expect to invest, how long does it take, and when do you pay for what? While these are straight-forward questions, the answers aren’t so simple. However, we’re going to help you understand what you need to know.
How much does an app cost?
Let’s start with the first question. How much should you expect to invest when building an app? The cost to build an app can vary from thousands to hundreds of thousands and even millions in some cases. So let’s take a closer look at what determines the cost of your app.
Who is building the app?
Who you hire to build the app will determine the cost and you essentially have three options. You can build it yourself, hire freelancers to build it, or hire an agency to build it and manage the project. Each option has its pros and cons.
- You: Building it yourself requires learning everything you need to know to build an app and investing your time to do so. The person who built Instagram actually took this route. The biggest pro is the cost savings. You won’t be paying anyone to do the work. The biggest cons are the time you have to invest in learning and building with no guarantee it will work.
- Freelancers: Hiring freelancers to build an app puts you in the role of a project manager. You seek out individuals who you can hire to build the app for you. A common strategy is to find freelancers offshore with lower rates. The major advantage to this route is that you can save some money due to competitive hourly rates. The major disadvantage is that you have to invest time and energy into the project management role, hiring people, holding them accountable, and coordinating efforts.
- An agency: The third route is hiring a professional agency like Brightscout to take on your app project. When you hire an agency, you get an entire team of professionals and strategists who work together on your project. They are often experienced with working together to deliver products effectively and efficiently. The main advantage here is a professional team that manages and completes your project with high quality. The downside would be a higher cost.
Who you choose to build your app is a key determining factor of your app cost, not to mention the time you need to invest and the time it will take to complete the project. It’s also important to understand that taking on the management of the app building process requires a skillset in itself—kind of like being in charge of building a large jet if you’ve never built a plane before. If that’s the case, an agency puts an expert in the management role so you can simply share your vision and put your efforts into other parts of the business such as sales, marketing, operations, etc.
How complex is the app?
Next, the complexity of the app will be a key determining factor in the cost. We recommend starting with a minimum viable product (MVP) which is an app with the core functionalities which are identified as top priorities. Many apps began this way from Airbnb to Facebook. You build the base and then expand from there. The number of features you want to include and how complex they are are factors. Additionally, the number of users the app is supposed to serve will matter. More people means more complexity which means higher costs.
Native vs hybrid is also an important decision. Native apps take much more time but deliver a better user experience, while hybrid apps are less expensive but offer a lower quality user experience. Further, if you opt for native apps, the number of platforms you want to build for is a multiplier. All of these decisions will impact the complexity of the app and the time required to make it.
Does your app have special compliance or security needs?
If you are building an app that requires special compliance or security needs, such as a healthcare app, you will be looking at higher costs.
These are a few of the main factors that will influence the cost and they reveal why app prices can vary so greatly. If you are building a simplistic MVP yourself that is very different than hiring an agency to build a complex healthcare app for 500,000 users. In most cases, if you are looking to cut the costs, you are going to have to exchange those investments of money for investments of your time. The key to understanding what your cost will be is to plan out who will build your app and what exactly it will contain. You can do this on your own and can get quotes from different freelancers and/or agencies.
What are the average costs for app development?
If we had to nail down a number as the average cost to build an app at Brightscout, we’d say the average cost is about $150,000 and we aim to have a minimum viable product (MVP) ready within three months. When researching quotes for mobile apps in the industry, we’ve found similar numbers (albeit ours is on the lower end). Applico quoted somewhere between $100,000 and $300,000. Savvy Apps quoted between $150,000 and $450,000, and Reinvently quoted between $100,000 and $400,000. Additionally, surveys have found the price range for an enterprise mobile app often lands between $100,000 and $500,000.
How do you actually pay for an app?
Now that we’ve dug into the costs of an app, how exactly do you pay when building one? Is it all upfront? As you go? Once it’s complete? What should you expect?
If you are building the app yourself, you will be paying with your time. If you hire freelancers, you will often get a quote from them for your project. In most cases, freelancers charge on an hourly basis at an agreed-upon rate and provide you with an estimate of the time the project will take. Then, you pay them for the hours as they are worked on a weekly, bi-weekly, or monthly basis. When you hire an agency, they can vary in the way that they charge. If a project is very complex, they may use the program (or project) evaluation and review technique (PERT).
A PERT chart will provide a graphical representation of the project’s timeline along with estimate ranges from the low-end to the high-end for different parts of the project. On the other hand, less complex projects may receive a quote from the agency, based on their past projects and knowledge of the project’s scope. In this case, payments will likely be made in milestones as the project progresses.
The 3 phases of building an app you need to know
When you begin an app project, there are three key phases to understand. The tasks that happen before the app is built, the tasks that happen during app building, and the tasks that happen after the app is built. Many people focus on the steps before and during the app building process and then think the project is complete. However, the steps after an app is built often account for about 50% of the costs!
So what happens in each phase of the project?
1. Before the app is built
Before an app can be built, you have to first identify the problem, plan a solution, and set up a suitable infrastructure, servers, third-party licenses, etc.
2. During app building
Once everything is set up, you get into the process of building the app. In this phase, you are paying a team for their time to build the app or are putting in the time yourself. The process requires a range of skillsets from designers and project managers to front-end and back-end developers. Typically, you’ll at least need a UI/UX designer, a front-end developer, a back-end developer, a DevOps engineer, and a quality assurance person.
While some individuals may be able to do it all themselves, it is hard to be a master at so many different roles. Further, one person can only do one task at a time making a one-man show a more time-intensive approach. So the building portion typically involves a team of skilled professionals working to solve your problem by building the app and you being involved in the process and reviewing the progress as it moves along.
3. Post app build
Once the app is finished, the much-anticipated launch happens which is when many people pop the champagne and call it a day. But there is more. An app is never truly “finished.” Like a garden, you can plant everything but you need to water it, prune it, and keep it up for it to thrive. An app is the same way. There is ongoing maintenance, you will need to perform updates and bug fixes. You may need to update features. APIs will break because things inherently change. Plus, you’ll likely want to continue to improve, pivot, and innovate to stay relevant and competitive. Understanding this factor upfront is helpful in the process of managing your app budget. People grossly underestimate the cost after-the-fact and it’s an important part of it. No matter who builds the app, all of these phases are required for a successful app build.
Where do you start?
At the core of a mobile app is a problem. Each client has a problem they want to solve. Maybe they want to provide access to their product offerings through a user-friendly mobile app, or they need to connect with their customers more effectively so want to create an app to increase loyalty. The app-building process starts by sharing your problem with the person who can solve it. At Brightscout, we undergo a discovery process to find out what your current problem is. Then, we share our proposed solution and an estimated cost and timeline. From there, you will have a better idea of what to expect for your specific projects because, as we’ve shared above, it’s not cookie-cutter. Not all apps are the same and there are a lot of factors at play. Depending on your specific needs, requirements, and team, we will customize a mobile app solution to all of your needs. Let’s start problem-solving!
Want to hire a team dedicated to building amazing products? Drop us a line today to start the discovery process.
