How Much Will It Cost to Develop a Custom Application?

When you’re about to start a new chapter in your business, automate your corporate processes with an app, or build a digital startup, a tough question may get in the way of your success:

How much does it cost to build an app?

Here’s the quick answer: The price of a custom app may start at $20,000 and reach hundreds of millions of dollars. But this answer doesn’t really help you understand how much your mobile app will cost, right?

To find out your app development cost, you need to understand factors that impact it. That’s why more important questions when you’re starting out would be: What cost factors should I consider when building an app? and How can I calculate an app’s cost? Knowing the answers to these questions, you can calculate the approximate cost of your app.

Can you define the exact cost of custom app development?

There are numerous factors that may impact app development prices, and you’ll learn about them in our article. But before we jump into calculations, there’s a significant fact you should be aware of: software development is not a finite process. If you want your app to succeed, you need to constantly work on improving it and invest time, effort, and money in coding, testing, maintaining, and promoting your app.

This is what industry leaders do.

• Uber was launched in 2009. Since then, it has raised more than $25 billion in investments, and more than 20,000 employees now work at the company. Uber still invests a huge amount of resources in software applications.
• Facebook is another proof that software development is a never-ending process. In 2004, Mark Zuckerberg was the only engineer. In 2022, according to LinkedIn, there were more than 21,000 software engineers working on Meta’s products. Facebook’s development budget is vast.
• Coursera was started in 2012 by two Stanford professors who created the platform to teach Stanford students. Since then, Coursera has raised over $440 million in funding and held one of the most successful IPOs in 2021. The company continues to invest in platform development to ensure a great learning experience.

Every tech giant was just a small website years ago. Persistence, effort, and massive financial investments have taken them to leading positions. Successful startups and established enterprises invest millions of dollars in engineering monthly. The expenses grow swiftly, and it’s impossible to calculate exactly how much Uber or Facebook have already invested in their software products.

Asking about the precise cost of custom application development from the very beginning is not the right approach. Not a single development agency in the world can provide you with a definite answer before they know your expectations.

But we’ll get you as close as possible to an accurate estimate.

5 key app development cost factors

The cost to develop an app fully depends on your requirements and expectations. There are many possible ways to turn an idea into a working application. Your development timeframe, cooperation model, and development team structure as well as your app’s complexity and functionality are only a few of the cost factors.

Let’s clarify the importance and impact of each factor:

Cooperation model

Who develops your application can greatly impact the cost of custom app development. Usually, you can choose from two main cooperation models:

• In-house development. You hire app developers and other specialists and manage all development processes in-house.
• Software development outsourcing. You cooperate with an app development company that takes care of building your app and managing the process.

What is the cost difference between these models? It’s hard to say, as everything depends on the specific situation. Let’s consider the pros and cons of outsourcing software development and building your app in-house.

In-house development

Developing apps with an in-house team requires both investments in maintaining your team and actual work on your project. It can be beneficial if you already have an in-house team and your specialists have enough expertise to build the app you want. You can also extend your team by hiring dedicated developers to fill skills gaps.

In-house development is also a great choice if you’re sure of your idea’s feasibility and value and you plan to hire a team for long-term cooperation. However, if you don’t have an in-house team yet or any proof that your idea can succeed, you should consider outsourcing your custom app development.

Software development outsourcing

When outsourcing, you don’t need to invest in recruiting, onboarding, retaining, and managing specialists to start working on your project. You pay for a result. You can first focus on developing a minimum viable product (MVP) to see how your app performs in real life and whether it’s worth developing a full-featured app. Of course, you can build an MVP in-house as well. But if it fails to provide real value to users and you terminate the project, you will need to dissolve your team, and therefore your investments in the in-house team won’t bring you any profit.

Outsourcing developers also have wide expertise and know the specifics of building different types of apps, which can help to ensure a smooth development process. Moreover, you can choose between outsourcing software development to specialists in Ukraine, Canada, the UK, India, or any other country to increase your chances of finding skilled app development partners whose experience perfectly fits your needs.

The mobile app development cost for a given project may be the same whether you build the app in-house or with outsourcing, but the key difference is how much effort you need to put into management and organization to get the desired result. Read our article on staff augmentation vs managed services to better understand which option better suits your situation.

Development team size and composition

To develop an app, you may need specialists in design, frontend and backend development, software testing, and other areas. Your software development team structure can be the following:

• Project manager
• Business analyst
• UI/UX designer
• Software engineer
• QA engineer

The more complex the solution you want to build, the more specialists you may need on your team. And the number of specialists you hire for your project impacts its cost.

If you want to build a simple enterprise resource planning (ERP) system for your company, you may need a project manager, a software designer, one or two mobile app developers, and a test engineer. But if you’re aiming to build a full-featured online marketplace platform, you’ll need to add a business analyst and several more developers to the team.

Scope variability across development stages

Custom app development includes several stages. At each stage, you get a defined deliverable: app documentation with an architectural approach, a prototype, a minimum viable product (MVP), and a full-featured app. The scope of work at each stage is different, and it directly impacts the cost. Creating an app prototype is cheaper than building a full-featured app from scratch.

In this section, we look at four stages of custom application development. Read about them and find out what your budget should be for each stage.

Project discovery

• Duration: 2–3 months
• Result: Project documentation and proof of concept
• Cost: $12,000+

The statements “I would like to build a photo sharing app” and “I would like to build an app like Instagram for local art college students, integrate it with Google accounts, and enhance it with digital well-being features” could describe the same app.

However, the first statement is vague, while the second precisely describes the idea. Still, neither provides enough information to engineers to start work on this mobile app development project.

The project discovery phase helps you pave the way to a clear vision of your app, its requirements, and the development process. During this phase, the project discovery team analyzes the target market and helps you find out if your app is feasible and worth investing your resources in.

Deliverables of the discovery phase can differ depending on your needs. For example, a project discovery team can help you:

• Create a lean canvas and a precise business plan for your startup
• Turn your idea into detailed software requirements documentation with functional and non-functional requirements
• Choose a technology stack
• Decide on your web application architecture and create a high-level architecture diagram
• Make initial development cost estimates
• Define the delivery approach and acceptance criteria
• Create a proof of concept in the form of a piece of functionality, feasibility study, pilot project, or other small-scale demonstration
• Create a startup product roadmap

Basically, running a discovery phase is the cheapest — and fastest — way to validate your app idea and pivot if needed.

App prototyping

• Duration: Up to 1 month
• Result: Product prototype
• Cost: $4,500+

If you have an in-depth vision of your project requirements and plans, you may want to start with prototyping.

A prototype is the initial version of your mobile application. It is not a functional app that you can launch but designed app screens that you can interact with to test your app idea and user flow. Its main purpose is to show you what your app screens will look like, what components and features the app will include, and how users can interact with it.

With a prototype, you can get a feel for the product, click on buttons and look at screens, reveal inconveniences in user flows, or come up with ideas on how to improve core functionality. It’s another way to make sure the project you plan to build will be in demand, easy to use, and intuitive.

In general, the prototype demonstrates several main app screens and the relations between them. For example, in the case of a photo sharing app, the prototype may include these main screens:

• Login
• User profile
• Add image
• Feed

The more screens you’d like to test within a prototype, the more time and money you will need to invest. But we believe building a clickable prototype worth the investments. While the cost to build an app prototype is relatively low, a prototype allows you to reach your first users and ask for their feedback. This feedback may help you decide how to move on with custom mobile app development.

MVP development

• Duration: 3+ months
• Result: Minimum viable product
• Cost: $100,000+

After you know that your idea is potentially profitable and you have initial user feedback on your prototype, you may start MVP development.

Your MVP is an extended and improved prototype. It includes all the app’s essential features and is the perfect basis for further product growth. While a prototype only demonstrates your app design and basic functionality, the MVP implements key features. This is the initial version of your app that you can beta test and use.

With MVP development for your startup, you can start marketing and business development, meet investors, and assure them that your idea is worth their money.

At the initial stage of custom app development, you probably have to invest your own money. Your budget may be limited, and you can’t invest everything only in mobile application development — you still have business and marketing operations and multiple other tasks that need a piece of the budget.

Following the lean startup methodology, start with a proof of concept and build an MVP. A minimum viable product, which is much simpler and cheaper than a full-featured product, will help you raise funds for further development. Besides, if your app provides real value, you can start to monetize it as well. As funds grow, you can invest more and more in product growth.

It makes no sense to invest $500,000+ in app development if you have no real proof that your app is going to thrive. Think of mobile application development as an iterative process: the more funds you raise, or the higher the revenue from your product, the more you can invest in upgrading functionality, the more funding you can attract, and so on. Thus, we recommend you start slowly, raise money for your startup, and invest it in a full-featured product.

Further growth and maintenance

• Duration: As long as the app is on the market
• Result: Continuous app enhancement
• Cost: Depends on the functionality

The software product development lifecycle repeats as long as you continue to work on your app, and it requires new investments. If your MVP is successful, you can improve it: fix defects, add new app features, and slowly turn it into a full-featured product. App maintenance and further development require new investments, so the original development cost will increase. A profitable project is the result of time, ideas, effort, meetings, and tons of code.

Unfortunately, it’s impossible to precisely answer the question How much does app development cost? Your ambitions and your app’s success may be the only limiting factors.

App requirements

What exactly do you need to know to calculate the approximate cost for an MVP? Every app has specific requirements that determine what it will look like, how it will perform, and what you need to build it. Considering your app requirements will help you to identify hidden costs and make accurate app development cost estimates. Here are five main things you need to pay attention to.

Deployment platform

If you plan native app development, what platform would you like to target? Use a data-driven approach to find out which devices your target audience uses.

• Your development team may use the Java or Kotlin programming language to build a native mobile app for Android.
• Native iOS app development requires expertise in Objective-C or Swift.

Instead of building separate Android and iOS apps, you may opt for cross-platform development. It allows you to create a single codebase for multiple platforms, reducing both cost and development time.

Still, cross-platform app development has its own peculiarities. Slight platform-specific modifications are required to give an app a native look and feel and to access smartphone hardware. For your next project, you may consider React Native — the most popular cross-platform development tool — or Ionic, another frequently used framework for building cross-platform apps. They both have their pros and cons, so we recommend consulting with your technical specialists on the right choice for your app.

You may also opt to build a web-based application — an app that users access via a browser instead of downloading on a mobile device. It can be a single-page application (like Google services or Twitter), a multi-page application (like Amazon or Wikipedia ), or a progressive web app that can work offline.

Web app development helps you target users on all mobile platforms, provide a native-like experience, and save money, as you don’t need to invest in developing separate apps for different operating systems. The web app development cost will mostly depend on your app’s requirements and complexity. If you want to find out more details on web app development costs, take a look at our article on how much it costs to build a web application from scratch,

Design complexity

Overall aesthetics, a minimalist design, and a catchy color scheme may make a positive impression on users. A good-looking app may win users’ attention and outrun competitors. At the same time, an app that is confusing, frustrating, too bright, or too dark and that has a poor user journey will drive away users.

When working on a unique project, you should take care to create a unique design and a well-thought-out user experience. To create this user experience, you need to be ready to invest time, effort, and money. And the more complex the mobile app design you would like to create, the more you will need to pay. Why? Because turning a complex design idea into a functional app will take your developers more time and effort than coding a simple interface with minimal components, animations, and screens.

As an alternative, you can consider ready-made templates. Using templates will result in a lower app development cost, but take into account that templates may not align with your specific needs. To adjust your app’s functionality with a template, engineers may need to invest time in redesigning. Still, the result won’t be as good as the work of a skilled designer.

App features

If you start with a project discovery phase, you’ll get a detailed work breakdown structure describing your app’s features and the approximate time needed to build them. This document will help you understand the cost of each feature and create an entire app development cost breakdown.

You can use third-party integrations to make development faster and cheaper, and at the same time provide users with desired app functionality. For example, let’s say you would like to integrate a chat feature in your photo sharing app. There are two ways you might approach this:

• Your team can use third-party services and embed chat functionality in your mobile app
• Your team can build chat functionality from scratch

At the first stages of your business growth, using third-party services may be quite beneficial. For example, Twilio offers its messaging API from $0.05 per user and charges a minimum fee for systems with up to 200 users. So while you grow your app and its user base, chat functionality won’t cost you a fortune.

How much does it cost to develop an app if integrating third-party services? Pricing plans for services vary widely, so your choice of service will impact the overall app cost. You may find cheaper options during the project discovery phase. Our main point is that there’s no need to reinvent the wheel or invest a few weeks to develop a single feature. If you see that you can integrate a third-party service with no harm to your app’s quality, then do it.

Data migration

Do you have a legacy database you need to use in your app?

For example, if you run an offline retail business and plan to extend your business to the digital space, you may want to have all your products from old and messy Excel files uploaded to your app’s database.

Depending on the types of data you collect, the system you use to store it, and the way you plan to use this data in the future, your development team can suggest how to migrate to another database or build your cloud infrastructure. Still, these tasks may be time-consuming and complicate your app development process.

Consult with an app development agency or your internal IT professionals to find out how much time you may need to invest in migration and how much it may cost.

Timeframe

In a highly competitive market, you either launch your mobile app as fast as possible or watch luckier competitors take your market share. But at the same time, it is important to ensure the quality of your app. How can you find the right balance between quality and delivery time? The answer is by increasing or reducing expenses.

Let’s say you have a development team. Like all humans, they have limited capabilities and can cope with a limited scope of work in a certain amount of time. They can build an app in six months, but if you ask them to deliver it in four months, they will have to neglect some steps in the development process, such as proper testing. In this case, you will be able to reduce time to market, but at the expense of quality.

How can you both launch in four months and at the same time ensure your app’s quality? Two possible ways are by extending your team with more specialists or making your team work overtime. Both will increase the app’s cost, as you will need to pay for new team members or pay existing team members at an overtime rate. Thus, your development timeframe is important for calculating the custom app development cost.

As you can see, all these factors are strongly connected. No consultant can provide you with an average cost to develop an app or estimate your app’s cost without a deep understanding and clear vision of each of these factors and your own expectations.

In conclusion

How much does it cost to create your own app?

Now you know this is not quite the question you should be asking. In short, there are different stages of custom app development with different costs:

• Project discovery phase: $12,000+
• App prototype: $4,500+
• MVP development: $100,000+

However, it is impossible to precisely estimate how much it will cost to develop an app without knowing five critical factors that may impact a software project’s cost:

• Scope variability
• Project requirements
• Team size
• Cooperation model
• Timeframes

We can assume that back in 2004, when Mark Zuckerberg started work on Thefacebook, he didn’t think that in ten years his product would attract billions of users, acquire promising technology startups, and lead the entire digital market. A simple MVP, an interested community, and small step-by-step improvements throughout the startup stages have taken Facebook to the position it occupies now.

There’s no need to try to calculate the cost of custom software development all at once. It’s vital to take small steps and grow your app from a simple idea to a sketch to detailed documentation to a prototype to an MVP to a full-featured product.

The development process never stops, and it’s impossible to answer precisely how much you need to invest to get an app like Uber or Facebook. Use an iterative approach instead of trying to calculate the cost of entire app development at once. Invest small amounts of money, involve C-level executives in planning and optimizing your app development budget, attract investments, improve the app, and watch it become popular and profitable.

Eventually, it won’t matter how much you’ve invested in your app; it will only matter how much you’ve earned with it.