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 thee 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 $45,000 and reach hundreds of millions of dollars.

When you’re starting out, more important questions would be: What impacts an app’s price? and How can I calculate an app’s price? 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 an app’s price, and you’ll find out about them in our article. But before we jump into calculations, there’s a significant fact you should be aware of: the software development process should never stop. 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 Uber. The company still invests a huge amount of resources in software applications.
• Facebook is another proof software development is a never-ending process. In 2004, Mark Zuckerberg was the only engineer. In 2022, according to LinkedIn, there are more than 21,000 software engineers working on Facebook’s products. Facebook’s development budget is vast.

Every tech giant was just a small website years ago. Persistence, effort, and massive financial investments have taken those companies to leading positions. All successful startups and established enterprises invest millions of dollars in engineering monthly. The expenses grow swiftly, and it’s impossible to calculate how much exactly 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 approximate estimate.

5 critical factors that impact app development cost

The cost to develop a custom app fully depends on your requirements and expectations. There are many possible ways to turn an exceptional idea into a working application. An application’s interface and purpose, UX design, complexity and functionality, data migration requirements, and integrations with other services are only a few of the factors that impact its price.

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

App development team location

To estimate the cost of custom application development, you should know about the cost of development services in different countries. Depending on the location of your development team, you may pay between $15 and $250 per hour for development.

Prices for software development services in countries like the US, Canada, and the UK may be unreasonably high. Meanwhile, popular outsourcing destinations like Ukraine hold strong positions in the software outsourcing market and provide high-quality services.

We analyzed the average price for development services in different countries, and here’s what we found:

Besides the hourly rate, the number of specialists on the team along with their expertise and experience will affect the approximate development cost. Depending on the team you cooperate with, you may either cut your budget significantly or add a couple of zeros to the app’s price.

Note: We are presenting only approximate rates and costs based on Clockwise Software market analysis. For a detailed estimate, contact your development partner.

Development team size and composition

Your team may include several critical roles:

• Project manager
• Business analyst
• Software designer
• Software engineer
• QA engineer

The more complex the solution you want to build, the more specialists you may need on your team.

If you want to build a website just to advertise your company, you may need a project manager, a software designer, one or two 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 of work

The scope of work directly impacts the development price. Adding a single feature is cheaper than building an entire app from scratch. In this section, we’ll take a look at four stages of custom app development. At each stage, you will get a defined deliverable: app documentation with an architectural approach, a prototype, an MVP, and a full-featured app. Read about them and find out what your budget should be for each stage.

Project discovery phase

• Duration: 400+ hours
• Result: Project documentation and proof of concept

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 be describing the same app.

However, the first sentence is vague, while the second one describes the idea more precisely. Still, neither provides enough information to engineers.

The project discovery phase helps you turn your idea into detailed requirements and ensure the developed project will meet expectations. During this phase, the project discovery team analyzes the target market and helps you find out if your app has a chance to survive.

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

App prototyping

• Duration: 600+ hours
• Result: Product prototype

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 app. It is a model that allows you to test key features. The prototype allows you to “feel” the product, click on buttons and look at screens, reveal inconveniences, 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 describes 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
• Image adding
• Feed

The more screens you’d like to test within a prototype, the more time and money you will need to invest. But it’s totally worth it. With a ready-made prototype, you can reach out to 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: 1000+ hours
• Deliverable: Minimum viable product

Once you know that your idea is potentially profitable and you have initial feedback from users, 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’s 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 a high-quality MVP, 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 in app development only — 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.

App development is an iterative process, and it makes no sense to invest $500,000+ in a product if you have no real proof it’s going to thrive.

Start slowly, raise funds, and invest them in a full-featured product. Software development is an iterative process: the more funds you raise, or the higher the revenue from your product, the more you can invest in functionality upgrades, the more funds you can attract, and so on.

Further growth and maintenance

• Duration: As long as the app is on the market
• Price: Depends on the functionality
• Result: Full-featured app

For as long as you want your product to live, you need to invest in it. A profitable project is the result of time, ideas, efforts, meetings, and tons of code.

Unfortunately, it’s impossible to estimate precisely how much money you’ll need to invest. Your ambitions and the project’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? Here are five main things.

Deployment platform

If you plan to build a mobile app, what platform would you like to target? Use a data-driven approach to find out which smartphones 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 two separate apps for Android and iOS smartphones, you may opt for cross-platform development. It allows you to create a single codebase for multiple platforms, saving both development time and your budget.

Still, cross-platform app development has its own specifics. Slight platform-specific modifications are required to give an app a native look and feel and to access smartphone hardware. You may consider Ionic, React Native, or Cordova — the most popular cross-platform development tools — for your next project.

Design complexity

Overall aesthetics, a minimalist design, and a catchy color scheme may influence users’ impressions. 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 with a poor user journey will drive away users.

A sophisticated design and a well-thought-out user experience require time and effort, and the more complex the design you would like to create, the more you need to pay.

As an alternative, you can consider ready-made templates. However, templates may fail to align with your custom software. To adjust your app's functionality with a template, engineers may need to invest tons of time in redesigning. Still, the result won’t be as good as the work of a skilled designer.

When working on a unique project, you should take care to create a unique design too.

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 entire app development cost breakdown.

You can use third-party integrations to make development faster and cheaper. For example, let’s say in your photo sharing app you would like to integrate a chat feature. There are two options available:

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

There’s no need to reinvent the wheel or invest 1000+ hours to develop a single feature.

Integration with third-party services

Integrating with third-party services is cheaper than building a particular feature from scratch, but it still requires investments. And you should add their price to the overall cost.

Let’s say you’re planning to use an external service for in-app messaging. For example, Twilio offers its messaging API from $0.05 per user. At the first stages of your business growth, this may be quite a beneficial option. Twilio 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.

Pricing plans for different services vary widely. You may find cheaper options at the project discovery phase. Check out testimonials and make sure no critical issues with a service, especially with user privacy, have ever emerged.

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 in 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 do migrate to another database or build the cloud infrastructure. Still, these tasks may be complicated and time-consuming.

Consult with IT professionals to find out how much time you may need to invest in migration and how much it may cost.

Deadline

In a highly competitive market, you either launch your app as fast as possible or watch luckier competitors take your market share.

In the case with a product for internal needs only, the deadline makes a difference, too. You probably want to automate your business processes as fast as possible. Each month your software release is delayed may result in hundreds of hours wasted, routine manual work, mistakes, errors, double-checking, and a buggy product. An automation tool may save you tons of nerves and money.

The time frame you want the development process to fit in is important for calculating the custom app development cost.

As you can see, all these factors are strongly connected. No consultant can estimate your app’s price without a deep understanding and clear vision of each of these factors and your own expectations.

In conclusion

How much does it cost to develop a custom software app?

Now you know this is not quite the question you should be asking. In short, custom app development may start at $45,000.

However, you also know about five critical factors that may impact a software project’s cost:

• Scope of work
• Project requirements
• Team size
• Custom app development company location
• Deadlines

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 have taken Facebook to the position it occupies now.

There’s no need to try to calculate the price for an entire project. 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 in an app like Uber or Facebook. Use an iterative approach instead of an all-at-once mess. Invest small amounts of money, attract investments and 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 raised with it.