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How Much Does Custom Software Development Cost?

David Barlev

December 17, 2020 · 6 minutes

If you’re at the point where you need a more specialized program for your business, you may have asked yourself, “how much does custom software development cost?”

Like most answers you find on the internet, it depends. If you’re trying to build a feature-rich program that stores account information for thousands of users, it’s probably going to cost over $100,000. But if you only need a simple application that stores documents for people to read, it costs only a fraction of that.

The biggest cost factor deals with how you approach your project. If you choose to work with only freelancers, you’ll save money upfront, though it will come with a lot of blood, sweat, and tears.

Freelancers charge an hourly rate that seems affordable until there’s a problem, at which point those hours of work stack up and start to threaten the solvency of your project budget. You’ll have all the creative control, but you’ll also be fully liable for any problems that occur during development.

On the other hand, a custom software studio charges more at the beginning, but any lingering problems become their responsibility. You will have a team of experts at your disposal, and you’ll have all the resources you need to create the best possible product.

So, how much will it cost you?

How Much Do You Have to Spend?

A laptop on a deskCustom business software can cost as much or as little as you want. Have you established a budget? What is it? Do you already know what to expect?

If you don’t have answers to these questions yet, we’ll be the first to tell you—it’s going to cost more than that.

Why? Because if you don’t have a plan, you’ll end up paying top dollar consulting fees to your software developer as you solidify your plans. As plans change, you’ll have to pay to fix everything retroactively. This is a problem no matter which route you choose.

The cost of your custom software will depend on two things: how well you’ve planned it out and how many features you want to be included.

Start with a Detailed Plan

Before any money changes hands, you need to know exactly what your software will do. If you still don’t know, walk yourself through the planning process. This can help you avoid simple mistakes like improper budgeting, overly broad scope, and bad platform management.

Who will be using this software—employees or customers? Why do you need it? What purpose does it serve? If you’ve reached the point where you’re ready to shell out the cash it takes to build an app, you need to have answers to these questions.

Put your plans in writing. Once you have a lean, pared-down idea of what your software will do, look for a comparable program online. In many cases, someone else has already created a similar program to what you’re trying to build. Take notes on what those apps do and find ways to improve them.

The best part of planning? It doesn’t cost a cent (beyond ISP fees), so you’ll have a leg up on the planning process without having to pay for it.

Planning also helps you figure out unique features you can include in your software. If you love something you saw online, tell your developer about it, and let them figure out how to incorporate it.

Freelancer or Studio?

A collection of desk items including laptopYou’ve scoured the internet for great programs like yours, you’ve found the best parts of them, and you know what you want in a program. Now what?

Well, there are two ways to go about your project.

One is to find a hungry freelancer who will do your bidding for an hourly rate. They don’t know what you want, but you’ll explain it to them. They’ll do their best to match your expectations, but you’ll have to tweak some of their work so it better fits your expectations.

You save money, but in return, you lose sleep when they need your input for decisions. If there are problems with the plan, you may have to pay out the nose to have them fixed.

Plus, coding is hard. There are many different languages used across different platforms. If your programmer doesn’t already know which one to use, it’ll be up to you to cover the cost of their education.

Ideally, you’ll find the best freelancer out there, saving you time and money. If you don’t already have someone like that, though, you may want to work with a design studio.

Budgeting for a Design Studio

Most software takes between 3-12 months to build, depending on its complexity. This will affect the cost, so plan on each month of development costing somewhere in the ballpark of $10,000.

As mentioned earlier, planning reduces the cost of custom software development substantially. After that, if you choose to go the studio route, there will be a retainer fee on top of whatever else you have to pay.

However, the beauty of going the studio route is that there is usually a flat fee that you agree on early in the planning process. Sure, you may pay a little more than you would with a freelancer, but gone is the headache that comes with being the last word on whether or not something is a bad idea.

Choose a Studio with Relevant Experience

Design studios have probably built whatever you’re designing, especially if they have experience in that particular field. By picking a studio that understands your needs and expectations, you will have a better chance of getting everything right the first time.

During your initial investigation of great business apps, find out which studios developed them. Just asking may provide you with an awesome studio you can work with later.

If they don’t want to tackle your project, there’s a good chance they know someone who will. Take their recommendations, find a good developer, and get started on your project.

Know Your Timelines

With this much money on the line, it’s important that you know exactly what to expect and when to expect it. If your developer doesn’t provide you with a solid timeline of milestones and achievements, find somebody else.

Communication breakdown is the biggest problem that companies face. You have to know that your team will respect your schedule by sticking to it.

This Feels Too Expensive for What I Want

A collection of desk items including laptopNow that you’re starting to see the costs required to get custom software online, you may wonder if you’ve missed the scope of your project.

Have you considered building a custom project using a template? Cookiecutter is a popular method where you take an existing framework and simply fill in the blanks. This allows you to save money while getting most of the features you need.

Honestly, there are so many pricey developers out there who charge for brainstorming, blueprinting, and sandboxing. It may be possible to tackle all of these issues on your own without having to pay top dollar for them.

The beauty of using a Cookiecutter app is that you can take your [nearly] finished product to a developer and have them put their finishing touches on it.

Take Advantage of Someone Else’s Software

Did you know that software developers create code just so that other people can use it at will? Application programming interfaces (APIs) are designed to make it easy to import software into someone else’s frame.

Any time your phone asks to use your camera, location, contacts, or other information, that app is taking advantage of an API.

If you (or your developer) can find a way to incorporate APIs into your product, you won’t have to spend all the time and money required to build those features from scratch.

Plus, your overall product will be better. APIs allow you to use the best of what’s already out there, so you don’t have to reinvent the wheel. Keep in mind, software companies spend hundreds of thousands of dollars developing efficient user interfaces and simple workflows so that users don’t stop using their product.

You can learn from these lessons and create the best possible product for your users.

How Much Will It Cost Me?

Building custom software isn’t cheap, but with the right pieces in place beforehand, you can save enough money that your project isn’t bankrupted before it starts.

All it takes is planning. By knowing what you want, you can help your software developer understand your wishes before they start any work. The more they know about your product, the better it will turn out.

What’s stopping you from building your custom business software today?
Click here to schedule a free consultation about your next project.

About David Barlev

David is the Co-founder and CEO of Goji Labs. David loves working closely with passionate founders to understand their vision and help them build beautiful applications while focusing on risk-mitigation. As an author, he focuses on informative and educational blogs that enable our clients to make the most of their businesses.

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