4min read

The price of a mobile app in 2021: how to evaluate the budget realistically

Asking the right questions is a time-, cost- and effort-saving skill. Instead of looking for the answer to the cliched query on how much it costs to make an app, try analyzing what shapes the price.

Placing a bold question concerning the total price of an app is like asking about the cost of vacation. It always depends. What is your destination? Any accommodation you want to book? Travelling by plane or by bus? Need a guide tour? Planning to go on excursions? Anything to think of before going to exotic locations? And that is the tip of an iceberg.

Surely, when it comes to developing apps, the price-quality ratio is the supreme rule. However, the question remains why budget limits vary enormously between $5,000 and more than $700,000 (according to the Clutch survey). In this article we’ll uncover what makes this discrepancy. We will also explain what budget-forming rules, factors and processes are the basis for calculation and what this price includes once you engage outsourcing services.

Factors that shape the cost

Logically, the first question is about the actual “ingredients” forming the final cost figure. Putting a price tag on your dream project is possible once you realize or study precisely what it should act, look and feel like. As puzzling it may seem, we’ll throw a curveball by defining a number of criteria that help to frame the cost of a custom software:

  • App type and functionality (number and complexity of its features and where it should be used: e-commerce, social, real estate search etc.)
  • Platforms and devices to be supported (iOS/Android native or hybrid, web/mobile, adjusting for certain device specifications, screen sizes and resolutions)

NB! To decide for yourself if you need a hybrid app, read more about the pros and cons of cross-platform development in our article.

  • Integration with third-party apps
  • Visual design complexity (basic, custom or animated elements, layouts and style)
  • Application of the smartphone hardware features (if your app will use the camera, motion tracker, GPS navigation or other features a phone or a tablet offers)
  • Type of vendor ( a freelancer/a software development agency), its location (country or region) and the hourly rate (see the cost breakdown map to compare the fees)
  • App development team composition (basic or extended: the number of developers, UI/UX designers and QA experts may vary, while the presence of a business analyst or a project manager is crucial)

outsourcing rates

NB! Yes, testing IS vital to any app development to make sure it meets your requirements as works exactly as you imagined it to perform.

  • Maintenance. Post-release technical support is required to make your app alive and thriving. However, it is definitely more than fixing bugs or adding new functions. In fact, a recent Clutch survey shows that on average $5,000-$10,000 is spent on maintenance. NB! At LinkUp Studio we offer a 2-month period of support service as a part of the package deal to make sure your product operates in the best possible way. Once it is over, you can switch either to a full-time or on-demand support plan.

Of course, the general idea is: the simpler the solution, the more standard tools are engaged, the less hours and workforce is needed. Developing a basic software project for a local delivery company with user login/registration and a chat function performed by a freelancer from India will certainly cost less than assigning a Ukrainian software development team to build an advanced cross-platform app for booking holiday destinations that integrates with Google Maps, has an intricate search filter and backend infrastructure.

Another crucial issue to bear in mind is the pricing strategy you choose. Basically, there are two options to pick from.

  • The fixed price model implies directly how much you will spend to create your app and how long it will take to release it. In this case, the project is delivered according to the details provided by the client. It is most suitable for small projects with clear specifications. What clients most appreciate in this model is setting a precise budget upfront.
  • The time and material model is tied to the hours and materials necessary for the project completion. Its first and foremost advantage is flexibility, especially, in terms of business process outsourcing. Activities, costs and project duration are defined but can be adjusted if necessary. Thus, complex projects benefit more from this strategy. Here, customers value the opportunity to pay for the actual work done and track the progress on request.

Check out more points to think of while comparing both models.

Fixed-price Time and material
Pros
  • Clear plan
  • Strict deadlines
  • Predictable budget
  • Easy monitoring of the process
  • Detailed specifications
  • Agile approach
  • No risk of the overpayment
  • Quick start of the development
Cons
  • Rarely integrates new ideas in the course of development
  • May face quality compromise if the initial estimates were not precise enough
  • Fairly accurate estimate
  • the necessity to monitor the Budget on a regularly basis
Works best for
  • Short-term projects (less than 300 hours)
  • Projects with a clear and unchangeable final scope
  • Projects that have undergone thorough estimation procedure
  • Projects with limited budgets and strict deadlines
  • MVPs
  • Long-term projects
  • Projects with dynamic requirements or indefinite scope
  • Solutions to be released on the dynamic market

No doubt, the fixed price model seems quite appealing. It provides the client with a clear vision of what will be charged. And we do recommend this strategy for short-time projects. Yet, it is difficult, sometimes impossible, to foresee all the factors that influence the scope. Also, fixing your budget shackles the team from introducing vital changes to make an app better. So, what seems to be the way to financial security turns into causing the risk of building the wrong product.

When it comes to the time and material model, you may feel anxious about “too much flexibility”. But the latter is the key to success. What if you still lack the final vision of the project, exact requirements or testing to modify your idea. Sometimes, your market may (and in a COVID-driven era, is sure to) change overnight and you need to adjust in the snap of a finger. With the initial estimation and the potential to change the scope you get to control the expenses and create an app that people will want to use. After all, this is the ultimate task.

Building a solid budget: what it takes not to mess up

No wonder that such a list of things to consider may confuse even the experienced businesses, especially when it comes to remote-work. And that is what we as an outsourcing agency are for. To deliver your dream product in a flexible and risk-free mode we take the following steps to provide your business with new value.

  1. Initial assessment. At this point we add up all the requirements and specifications of your future app to provide a free-of-charge ballpark estimate of the mobile app cost as well as an accurate price of the discovery stage.
  2. Discovery stage. Processing initial data now transforms into a full-scale business analysis. If you still doubt that a thorough discovery stage is a must-have, check out our article to understand its role in shaping your most realistic budget. YES, this phase may cost somewhere between $2,000 and $10,000. And NO, it is not an option to skip it and use rough estimates. Superficial approaches lead to faulty solutions.

    After all, this is like going on a trip with very little knowledge of all the stuff you’ll face. You may prefer spontaneous trips. But when it comes to long-term journeys, package holidays are the crackerjacks. They do cost more but make you feel safe that an expert has already studied (and included!) the price of entry tickets, transportation, proper guidance and booking. Thus, a discovery stage is like a package deal offering you to lower your risks, increase the chances to form an exact budget and ensure a successful first release.

    The final actions at this stage are presenting the ultimate project concept (system models, requirements specification document, UX design (wireframes), UI design (clickable prototype), UI kit documentation, development plan and budget calculation, recommendation regarding technological perspectives). Only such detailed study can give you:

    1. full understanding of what your app will look like and what it will take financially and time-wise
    2. equip you with a great tool to engage investors and explore your idea further.

          Cost estimation: total numbers

          Surely, building the budget that doesn’t simply fit in with your finances but allows you to create a valuable product is quite an adventure. However, there are two ground rules you need to follow:

          Rule 1: No professional outsourcing agency can tell you the price of your app at once.
          Rule 2: All the calculators or budget planners you can find online are just marketing traps.

          Once you choose to ignore these guidelines, you will come up with no more than a rather obscure budget estimation and faulty project assessment. What’s more, you will be quite lucky if you avoid cost and timeline overruns.

          Still, we would like to give you at least rough figures to ensure conscious budget estimation. Thus, we will explain what different types of apps may cost depending on the functionality and expertise involved. Here are some vivid examples of apps you have probably heard of or use on a daily basis.

          famous apps

          It’s true that when it comes to planning your budget, there are no short-cuts. You still have to involve a range of experts, discuss key issues in detail and form a reasonable strategy. Thus, to ensure adequate cost estimation you need to remember:

          1. Precise pricing = accurate specifications + a scrupulous discovery stage.
          2. The budget of your application always depends on a range of technical and workforce factors as well as the pricing strategy you choose.
          3. Underestimating not-so-obvious cost drivers like maintenance or testing may be crucial to building a successful app.
          4. The cost to build an app cannot be calculated by putting ticks on quick-fix online checklists: budgeting is a process, not an event.
          5. The most influential factor is selecting the right team i.e. a professional company that has both the expertise and a strategic approach towards creating mobile solutions.

          Yes, shaping the cost of your future app on your own is nothing like a vacation. But we are ready to turn it into an enjoyable journey. Contact us to know more about estimating your dream app development.

          Share

          The result that matters!

          Feel like making your digital idea a reality?

          How can we help?

          We'd love to hear what you are working on. Drop us a note here and we'll get back to you in 24 hours, or you can chat with us live using the bubble at the bottom right of your screen.