App development costs are very similar to a standard software project. In app development, costs comprise both fixed and ongoing expenses, which you can pay monthly, quarterly, or annually. You may spread these costs evenly throughout the app development project or pay more at certain times than others, depending on the approach you choose to build your app.
This article aims to provide a breakdown of the types of costs found in an app development project and the nature of these costs. You can read this article if you are looking to find out how much it costs to build an app.
Introduction
Anyone looking to build an app is keen to know how much it costs to build an app.
Simply knowing this provides you with a significant total cost without necessarily revealing its composition. What are the constituent costs that make up the larger whole? How do you incur these costs? When do you pay for them? What is the nature of these costs? These are some of the questions that this article looks to answer.
App Development Cost Classifications
When we take on clients to build an app for a lot of times they tend to think that they have to pay the total cost of building the app at once or over 2 or 3 payments. We carry out app development in phases and the output of each phase serves as the input for the next. Similarly, we break down the total cost of building an app into parts to align with each phase. It is also worthy of mentioning that within each phase there are milestones which means that costs are further broken down into smaller parts. This simply means that the cost of building an app is further broken down into smaller chucks and spread across the app development period.
The classification of our app development costs follows our app development approach of Imagine. Engineer. Create. Here is a classification of app development costs based on our approach of building apps:
App Prototype
Here we get the client’s idea out of their head and documented in detail.We also design the backend architecture and construct a prototype of the app, allowing the client to experience its look and feel before we proceed to build the final version. You can expect to spend about 15% of the total cost of building an app here. This phase falls under our Imagine and Engineer phase.
Development
The costs here directly correlate with building the app and are allocated towards the services provided by a skilled app development team. We adopt an Agile approach to app development, breaking down the costs associated with the process into smaller milestones, each with its corresponding expenses. This means that the 50% of total costs linked to this phase is further spread into smaller chunks and not paid for at once. This falls under our Create phase.
Support
Approximately 10 – 20% of the total cost is dedicated to supporting the app on an ongoing basis after it is built and released to the public. This may optionally include marketing costs as well. Clients make payments for this on a monthly, quarterly, or annual basis. So unless you decide to pay for this annually, the cost for support can be further spread over a period of time hence resulting in smaller payments.
Infrastructure
You may spend about 10 – 15% of the total cost on infrastructure. Infrastructure simply means the servers and services your app requires to run. Typically an app would require two sets of infrastructure. One to support the development process and another for running live supporting real users. Please note that infrastructure costs may constitute a larger percentage depending on the infrastructure requirements of the app.
Common Constituents of App Development Costs
When you receive the total cost estimate for building an app, it comprises various types of costs with differing weights and payment structures. Below is a list of common cost items that constitute the total cost of app development:
Development
- Development team
- Description: The skilled team that designs and builds and tests your app
- Type: Fixed or Ongoing
- Nature: Milestone-based to time-based
Infrastructure
- Hosting – Website
- Description: A public facing website about your business, product, service. Would typically point visitors to download the app.
- Type: Ongoing
- Nature: Monthly/Annually
- Hosting – App Administration Console
- Description: A web application to allow for app content management. Such as settings, content moderation, dispute resolution. Also used for data dashboards and reports.
- Type: Ongoing
- Nature: Monthly/Annually
- Hosting – App Backend Services
- Description: Software components that enforce the business rules of your app platform
- Type: Ongoing
- Nature: Monthly/Annually
- Apple App Store
- Description: Used to make your app available to Apple devices.
- Type: Ongoing
- Nature: Annually
- Google Play Store
- Description: Used to make your app available to Android devices
- Type: One-off
- Nature: One-off
- Third-party services: Software services that are typically integrated into your app. These services are not built from scratch. Some examples are:
- Messaging
- Email
- Description: Trigger email messages to app users based on specific events within the app platform
- Type: Ongoing (free tiers commonly available)
- Nature: Monthly/Annually
- SMS
- Description: Trigger email messages to app users based on specific events within the app platform.
- Type: Per number of text messages
- Nature: Pay-as-you-go, Discounted SMS bundles
- Email
- Image storage
- Description: Used to store user generated images such as profile photos etc.
- Type: Ongoing
- Nature: Monthly/Annually
- Messaging
Support
- App support
- Description: Technical expertise provided by a support team to keep your app running.
- Type: Ongoing
- Nature: Monthly/Quarterly/Annually
- Marketing and Promotion
- Description: Get the word out about your new app. May not be initially required If you have a strong community of existing customers.
- Type: One-off, ongoing
- Nature: Campaign-based
Payment Structure
Payment structure would depend on whether you are building your app in-house or outsourcing it. And if you are outsourcing it, it heavily depends on the approach taken by the outsourcing company. Answers provided here would be based on how we approach app development.
Let’s take an example of a business looking to build an app that lets their customers book services and earn redeemable loyalty points. For the sake of this example let’s say it would cost ￡1,000 to build the app.
App Prototype (￡30 | 30% of total costs | 4 to 6 weeks)
We would need to understand their idea a bit more and capture all the details so we can create a prototype that lets them experience the app without building the final app. Costs here are further broken down into the following:
- Requirements specification (￡20)
- ￡10 – paid at the start of the requirements specification process
- ￡10 – paid at the end of the requirements specification process
- UI/UX design (￡10)
- ￡5 – paid at the start of the design process
- ￡5 – paid at the end of the design process
App Development (￡50 | 50% of total costs | 8 to 16 weeks)
Further broken down into the following:
- ￡10 – Milestone 1 – Customer account creation
- ￡15 – Milestone 2 – Service booking
- ￡15 – Milestone 3 – Loyalty point redemption
- ￡10 – Milestone 4 – Profile management
App Support (￡10 | 10% of total costs | 52 weeks)
App Infrastructure (￡10 | 10% of total costs | 52 weeks)
Factors Influencing App Development Costs
When estimating the costs of app development, it’s crucial to consider the multitude of factors that can influence the overall expenses. By understanding these factors, businesses can make more informed decisions and budget effectively for their app development projects.
Complexity of Features
The complexity of the app’s features plays a significant role in determining development costs. Apps with basic functionalities will naturally require less time and resources to develop compared to those with advanced features such as real-time messaging, geolocation services, or machine learning algorithms. As the complexity increases, so does the development time and consequently, the overall cost.
Platform(s) Selection
Another factor influencing app development costs is the choice of platform(s) for which the app will be developed. Developing an app for multiple platforms, such as iOS, Android, and web, will inherently increase development costs as each platform requires unique coding and design considerations. Additionally, optimising the app for different screen sizes and resolutions adds to the complexity and cost of development.
Level of Customisation
The level of customisation required for the app also impacts development costs. Custom designs, user interfaces, and functionalities tailored to specific business requirements often entail higher development costs compared to using pre-built templates or standard design elements. While customisation can enhance the user experience and brand identity, it comes with an associated cost that businesses must consider.
Integration with Third-Party Services
Many apps rely on integrating third-party services such as payment gateways, social media APIs, or analytics tools to enhance functionality and user experience. While leveraging these services can save development time and effort, they may come with licensing fees or usage charges, adding to the overall cost of app development. Moreover, integrating and maintaining compatibility with third-party services requires ongoing effort, which should be factored into the budget.
Ongoing Maintenance and Updates
App development costs extend beyond the initial build phase to include ongoing maintenance and updates. Once the app is launched, it requires regular updates to fix bugs, address security vulnerabilities, and introduce new features to remain competitive in the market. Businesses should budget for ongoing maintenance costs, which may vary depending on the app’s complexity and the frequency of updates required.
Understanding these factors allows businesses to make informed decisions when planning and budgeting for app development projects. By assessing the complexity of features, platform requirements, customisation needs, integration with third-party services, and ongoing maintenance considerations, businesses can develop more accurate cost estimates and allocate resources efficiently.
Other Factors To Consider
The cost breakdown provided in this article are not definitive. This is because each app project is different and its costs may be weighted differently from a similar project. For example, a booking service app may require less image storage than a social media app and therefore the social media app would have higher image hosting costs.
The approach used to build an app also heavily influences the nature of its costs. The cost of building an app in-house would be different when compared to outsourcing the development of the same app. In a similar way, different outsourcing companies may charge differently and have different payment plans. So it is helpful to understand the constituent costs of building app but note that the actual amounts and nature and payment plans would vary from project to project.
App support costs and app infrastructure costs would continue to run as long as the app in use by end-users. In addition to these, there may be additional costs associated with adding new features to the app.
Strategies for Cost Optimisation
While app development costs can vary based on a multitude of factors, there are several strategies businesses can employ to optimise expenses and maximise the return on investment (ROI) from their app development projects.
Prioritise Features
Begin by identifying the core features essential for your app’s functionality and user experience. Focus on developing these features first and consider additional functionalities as future updates. By prioritising features, you can streamline development efforts and allocate resources more efficiently.
Use Cross-Platform Development Tools
Leverage cross-platform development frameworks and tools such as Flutter to build apps that run seamlessly on multiple platforms with a single codebase. This approach can significantly reduce development time and costs associated with maintaining separate codebases for each platform.
Outsource Non-Core Activities
Consider outsourcing non-core activities such as UI/UX design, quality assurance testing, or backend infrastructure management to specialised service providers or freelance professionals. Outsourcing allows you to access expertise on-demand, reducing overhead costs associated with hiring full-time employees.
Iterative Development Approach
Adopt an iterative development approach, where the app is developed and released in stages, with regular feedback and updates based on user testing and market validation. This iterative process allows for incremental improvements and reduces the risk of costly rework later in the development cycle.
Optimise Resource Utilisation
Optimise resource utilisation by implementing agile project management methodologies, conducting regular code reviews, and ensuring effective communication and collaboration among team members. By optimizing resource allocation and workflow efficiency, you can minimise wastage and maximise productivity.
Explore Open-Source Solutions
Explore open-source libraries, frameworks, and tools to leverage existing solutions and accelerate development efforts. Open-source technologies offer cost-effective alternatives to proprietary software and can be customised to meet specific project requirements.
Negotiate Vendor Contracts
When integrating third-party services or purchasing software licenses, negotiate pricing terms and explore volume discounts or flexible payment options. By negotiating vendor contracts effectively, you can lower procurement costs and achieve better value for money.
Monitor and Analyse Costs
Continuously monitor and analyse project costs throughout the development lifecycle. Implement cost-tracking mechanisms and budgeting tools to track expenses, identify cost overruns or inefficiencies, and make timely adjustments to stay within budget.
By implementing these cost optimisation strategies, businesses can mitigate risks, streamline development processes, and achieve greater cost-efficiency in their app development initiatives. You can download a PDF that provides tips to business leaders on how to get the best outcomes from app and software development projects.
Summary
App development costs can get complicated depending on the type of app being built. a large part of the app development costs are attributed to the app development team while the rest of the costs are spread across prototyping, infrastructure and support.
App development costs do not need to be incurred all at once but can be easily spread over the duration of app development. This helps businesses avoid high upfront costs when starting out.
Because app development is basically the same as software development, it suffers the same risks involved with custom software development. App development projects can easily go over budget and estimated timelines but there are proven things that can be done to minimise the chances of such occurring.
If you can looking to get an app built and need help figuring it out then get in touch and lets talk.