How to estimate the cost of building your mobile app?
There wasn’t a single client of ours that didn’t ask the big question. “How much will it cost?”. It’s understandable, because time and money are the most crucial resources for every business. Especially for a StartUp at an early stage with no product built. But building an app is a complex process, so you must know that estimating the development costs accurately is nearly impossible. But somehow, it has to be done. Although it’s not easy, here’s what goes into the estimation and how we do it at INVO.
What Goes Into an Estimation?
It’s hard to precisely estimate the costs of building a mobile app because there are a lot of factors that influence the estimation. There’s even a lot that we can’t control. Here are the key things that go into the estimation:
The most important, and the most obvious, factor when estimating the costs is the project’s scope. If you want to develop a complex, multi-platform app, chances are it’s not going to be cheap. But if you’re just looking for adding a new feature or improving an already existing one – it shouldn’t be that expensive. Of course, the more work needs to be done the more it’s going to cost. But many people do not know what exactly they want to do at the very start of the project, they usually just have a simple vision in mind. That’s why it’s so hard to estimate the costs.
The Team and Their Know-How
Something that influences the estimation as well is who will be on the team. If you just need design services, the price will be lower than developing the whole app – the team will be smaller. What also matters is the know-how of the team or the agency that you’re working with (if you need help with choosing, we have an article on the best tips on how to pick the right UX design agency). The more experienced and skilled the team is, the quicker they will come up with solutions. That’s why it’s important to choose a great agency with an excellent portfolio, preferably with projects similar to yours. This way, you will save time (and, as a result, money) on researching the market and solutions.
Your Expectations, Needs and Your Work
What the cost will be also has to do with how quickly you need the project to be completed. It also depends on the approach you want to take (build an MVP first and then add features or go for the full version right away) and how much preparations you’ve done on your side (whether you have designs in place, some research done etc.). All this will influence the estimation. So, you need to be clear and precise in your communication with the development team and always hand them over everything you’ve prepared – specifications, design, copy – it will help the estimation be more precise.
If you thought that’s it – well, there’s more. External factors are the thing that makes it so hard to precisely estimate the project’s costs. Depending on where your team is based and, therefore, what’s the market price there, the costs will differ. It also depends on whether you decide to work with an agency, freelancers or outsourced developers. Also, if you’re located in an area where there’s not a lot of people providing such services, chances are, the costs will be higher. It is something to keep in mind while choosing your partner.
How to Make the Estimation More Accurate?
As you can see, there are many different factors that influence the estimation. It is extremely hard but if you’re seeking the most accurate estimation, there are some thing you can do on your side to help your contactor make a more precise estimation. Here, at INVO, we always ask about those things and often organize workshops for this purpose, but if you will prepare the information before contacting us – the whole process will be much quicker and smoother.
If you want a more detailed description of how to prepare for the development process of your app – download our eBook. Here, we will focus on a few of the most important question you need to have answers to during the first meeting with the team.
1. What problem does your app solve?
Each great app solves a certain problem. It doesn’t even have to be a very complicated one. If you know exactly which problem are you targeting, then the whole process will be centred around that and the chance of getting lost in different features is smaller.
2. Who will be using it?
Know your audience. It’s key to achieving success. Doing some research, asking around or interviewing your friends, all can be extremely useful when trying to target the app to a specific user group. And if you have it done beforehand it saves you time and money.
3. How will they be using it? What functionalities it needs to have?
It is important to not only know which problem you want to solve but also how you’re going to do it. Even if you don’t have a full specification with each functionality broken down into tasks, it will help the team prepare an estimation if you have at least come up with a list of key features. The functionalities will also be key to understanding your business model.
4. On which platforms and devices your users will be using it?
It is important that while getting to know your target audience, you research which platforms and devices they use. It makes no sense to develop a mobile app for iOS if you’re users prefer Android or Windows Phone. So make sure to gather as much data as possible.
5. For which platform do you want to develop first?
Depending on your target audience, the app may need to be available for various platforms. You need to decide (the team will surely help) how to approach the development of the app and what to develop first. You can either go with an MVP (Minimum Viable Product) for a single platform and just the core functionalities and then add on to it or launch only when apps for each platform are ready. This is a tough decision and it depends on your timeframes, budget and goals, but it’s worth to think about it before meeting with your contractor.
6. Who’s on your in-house team and which parts of the work you can do?
It is important that you know exactly who do you have on your in-house team and what can they do during the process. Sharing responsibility is the best way to deliver a product to the market quickly and efficiently.
7. What’s your budget?
Well, if you don’t know the cost of the development, what’s your budget for? The development team needs to know how much resources you have in order to tailor the approach to your situation. If your budget is smaller you can take the MVP route to your success, but if your budget is bigger you will be able to go for the full version (if the situation calls for it, of course).
9. What’s your deadline?
Nobody likes them but deadlines are important. And you need to know when you plan on launching your product so that when estimating the costs, the team has an idea of how fast they need to work and how many people they need on board.
Cost Estimation Methods – Time & Material vs. Fixed Price
To understand how cost estimations work, you need to know about the two most popular estimation methods. There’s Time & Material as well as Fixed Price. Here’s how both work:
Time & Material
This method doesn’t exactly estimate how much you will pay for the whole project. It is an estimation of an hourly rate. You will, therefore, just pay for the amount of work done. This one is particularly useful when the scope is unclear and it’s hard to estimate specific features. For example, if you have an idea for a product but have not specified or researched it yet, it might be better to go with Time & Material. You will have less control over budget planning and the deadlines but at least you will stay flexible and give yourself space to figure out how your idea can become a successful business.
It’s easy to guess what this method is about. In this scenario, you will get a complete estimate with a fixed price for completing the whole project. This one allows you to better plan your budget, because you know the exact price from the start. However, it makes changing the specification along the way harder. Fixed Price would be a way to go if you have a bulletproof specification and are sure what you want and what your users need.
Average Project Costs at INVO
As you know, it is extremely hard to provide you with accurate information about how much a project might cost to complete, because every project is different and there are simply too many variables to consider. However, based on our previous projects, we can provide you with a cost range for three types of apps – simple, small apps, medium apps and big apps.
Small applications can be developed in less than 3 months and usually have just a few features. They don’t typically use any integrations such as payments or outsourced APIs. The prices vary even for the simplest apps, but the costs usually closes between $14,000 – $30,000.
Medium apps take longer to develop, it can even be up to a year. These usually are more complex and besides key features they also include secondary features that improve the user’s overall experience. Building such an app with INVO is a cost ranging from $30,000 to even $100,000, depending on the complexity of your app.
And the last category are the big, complex applications. Within this category fall projects like fintech apps or cryptocurrency apps. These have a lot of features, both main and secondary and require extreme attention to detail and security. There’s also lots of integrations involved. Developing a big, complex app is a process that may take more than a year or two and the costs will be higher than $100,000+.
What to Consider When Choosing Your Business Partner
It’s important to know that there is no way to accurately estimate the project’s costs beforehand. There’s a lot of factors that will influence the price as well as several things that can go wrong along the way – and those will have an impact on the delivery time as well. That’s why it’s crucial to choose a partner who will really get your idea, your vision and your needs. When the both of you have the same goal, the chances are, your partnership will be more beneficial for both sides. If there is no trust, you will constantly wonder whether your partner’s estimations are correct. And, especially with bigger apps, this is a long-term partnership which requires great relationships between the two sides.
We can’t tell you how much it will cost to build your project in this article, because we simply do not know anything about it. If you’d like to get an estimate – contact us and our team will be more than happy to help!