App Development Costs: Tips for Estimating Development Costs for Startups

Quick Summary: Are you thinking about developing mobile applications for your business? You must have explored a lot about mobile app development and even solved most of your issues. However, there may be plenty of things that may have kept you guessing. And, mobile app development costs could be the first one, I assume. So, this article is next in line with your mobile app development research that precisely explains “how much does it cost to make an app for your business.”

How much does it cost to make an app for business? This is probably the first question you have when you think of building a mobile application. This is the first question that we at Dash receive from every client during the initial communication phase. And, let us repeat the same answer here “There is no fixed price for building a mobile application. The reason is every project differs and so do the app development costs.

The fact is you cannot decide the mobile app development cost based on your budget. And, that invites the second most important question, “what factors impact on mobile app development costs.”

The short answer to this question is “many.” Yes, there are plenty of factors that impact cost, such as;

  • App types
  • App complexities
  • Features/functionalities
  • Where builds your app

These are some of the top factors but on the whole. You have plenty of things to explore, especially those impact costing. We shall discuss these factors in detail later in this article, but let us begin with the basics first.

Table of Contents

  1. Mobile App Market, Trends, and Facts
  2. How Much Does It Cost to Build an App: Average Costs
  3. Factors That Affect Mobile App Development Costs
  4. Finally, Breakdown of Mobile App Development Costs

Mobile App Market, Trends, and Facts

Did you know a user spends an average of 3.40 hours on a mobile phone while 90% of their time is spent on apps?

According to Statista;

  • 46.45 percent of the population owned smartphones by the end of 2020
  • As first quarter of 2021, smartphone users are using 6.4 billion subscription
  • The same is expected to reach 7.5 billion by 2026

The reason we gave these stats is to help you understand the significance of the app in your business. We have mentioned that a smartphone user spends 90% of total time on the phone in apps. That means you cannot ignore the dominance of apps in business today. Understanding these facts will help you come up with excellent app ideas that catch the attention of users.

How Much Does It Cost to Build an App: Average Costs

There are no fixed costs for mobile app development, it’s clear. Mobile apps vary widely in terms of development costs. A report by Clutch suggests that the median cost for developing a mobile app may range “between $37,913 and $171,450, but could climb up to $500,000 or higher.”

However, the figures (app development costs) suggested here are based on the common hourly wages charged in the U.S.: $100/hour and $150/hour.

At Dash, the median costs for building a highly complex app ranges between $30,000 to 40,000. The cost could climb up or drop-down based on the requirements, the app’s complexities, and the number of features you want to integrate into your app.

Besides, there are various other factors that impact the costing, and the following paragraphs help you understand all these factors.

Factors That Affect Mobile App Development Costs

We have understood the average costs to build a mobile app, and the figures we have suggested are based on the survey conducted by an independent reviewing site. Now, we shall discuss the factors that affect cost. And, if you plan it better, you can reduce many hundred development hours, hence the development costs. So, let’s begin;

Identify the App Types

You can divide the type into many different categories, for example;

  • Basic App
  • Data-Driven App
  • Authentication App
  • Social Networking App
  • On-Demand App
  • eCommerce App
  • Marketplace App
  • IoT & Hardware App
  • Gaming Apps

But, you can summarise these types into three main types for better understanding;

  1. Simple
  2. Medium
  3. Complex

Simple App: Simple or basic apps come with three to four screens and don’t have any storage or database. For example, Calculator, Camera, Clock, Local games, SMS apps, Local audio, etc., are some of the top examples of basic apps. Such apps take around 2 to 6 months to develop. That means it might take 250-700 development hours.

You can easily calculate the cost based on the development houses and the hourly rates. For example, if the app takes 250 hours with $100 hourly rates to develop, the total cost to develop the app would be;

Total development hours × hourly rates = cost

In this case: 250 × $100 = 25000

Note: this is just a rough estimation; the price may fluctuate based on your requirement.

Medium App: The medium app comes with a database as the app needs to store data on the users’ devices or servers. Such apps also require sign-up/in and sync data across multiple devices. Such an application takes 500-800 hours (can be even 1200 based on the requirement). You can get the rough estimation using the same method.

Complex App: It’s usually a time-consuming app. And it may take even more than 1200 hours to develop. Complex apps come with various key features, bespoke user interface design, and functionality. It may take added hours to design, develop, test, and implement if it’s a gaming app. You can contact your technology partner to get the rough estimation, or if you have the project scope, you can calculate the price based on the method given above.

Choose the Platform

The development approach does impact the cost. You need to decide if you want to build;

Native application

Hybrid application

Native application: Native application is developed using the native technology, such as Android Studio, Kotlin, Java are used for Android OS and Swift, C, C++, Objective-C for iOS applications.

You need to figure out if you need a native application for Android and iOS platforms or a single iOS or Android for a single platform. The cost will depend on the requirement.

Hybrid Application: Usually, this development is widely popular for many reasons. For example, you don’t need to build two separate applications for different platforms. 90% of code can be shared across the platform. Besides, it’s comparatively cheaper than native applications. It significantly reduces development hours, and so do the development costs.

Make a Project Scope

Before you approach your development partner, you must prepare a clear project scope. App development without project scope can ruin your budget if any changes occur in-between the development process. So, make things clear right in the beginning. Get your project scope ready, confirm it twice and thrice (if possible, take the help of an expert).

Make a Technology Partner

It’s the most important phase where you need to choose your technology partner. You have a couple of options here to decide. For example, if you want to;

  • Hire Freelancers for Your Project
  • Build In-House Team
  • Or Hire an Agency

All three come with their own pros and cons; all it matters is what suits you the most what you are comfortable with.

Hire Freelancers: No doubt, you can save some big bucks by assigning your project to a freelancer. However, it comes with many drawbacks. For example, you need to forget the deadline. You are not going to get your project in your time. Quality of work may be compromised, especially if you are not aware of technology and development. Most importantly, you may struggle to establish smooth communication with your freelancer team.

In short, if you hire a freelancer, don’t hand over the entire project, rather provide a part of your project to develop. If you have a complete project to develop, then avoid hiring freelancers.

Building In-House Team: It’s the most favored idea, though it’s an expensive affair. Building your in-house team requires you to have proper infrastructure, human resources, and management. But, the in-house team will enable you to have complete control over our project.

Hire an IT Firm/Agency: Did you know 80% of small businesses outsource their software development project to other agencies?

Even most fortune 500 companies, like Google, Microsoft, and others, outsource their project to other IT firms. The logic is, why pay $150/hr to someone local when you get the same work done for the quarter of the cost? However, you need to follow a process to hire an app development agency. For example, inquire multiple IT firms, take interviews of developers, and whoever fits into your requirement, hand over your project to them.

Decide Features

Features are the most cost-driving factors. The cost will climb up or down depending on the features you choose to integrate into your app. You can choose to go with only the necessary features initially and integrate other features later. Besides, features will differ based on your app types. We have assembled some of the common features for your ideas;

Basic Features

  • Log-n
  • Subscription
  • Payment gateways
  • Menu
  • Multi-Platform compatibility
  • End-to-end encryption
  • Custom design
  • Notification
  • Chat
  • Contact Us

These are some of the basic features, though they can differ, and you can decide the features as your business needs.

StageComponentMedian Low (Hours)Median High (Hours)Maximum High (Hours)
PlanningResearch and discovery840200
 Scope definition927160
DesignWireframe design – seven screens1456140
 Visual Design – seven screens1487.5210
 User experience design7.12528200
FeaturesNative device features429100
 User engagement, such as SMS, Email, Push, Social5.530150
 User login4.528 70
 Use of location data524150
 Sync across devices1662.5200
InfrastructureInitial setup/Basic controls52050
 Data storage6.540200
 Third-party API integration850120
 Access to enterprise data22100400
 Data encryption104080
 Scalability/Large number of users24130800
App AdministrationInfrastructure for performance management and analytics82080
 Web portal or CMS to manage application351201,000
TestingInternal, user, and deployment testing30160300
DeploymentLicensing, packaging, etc.5.1251140
Total Hours 252.751,1434,850
x $100/hour $25,275.00$114,300.00$485,000.00
x $150/hour $37,912.50$171,450.00$727,500.00[1] 
Source: Clutch

This is just a reference that has been surveyed among the top 12 development companies by Clutch. Usually, the average cost may differ widely if surveyed among mixed development companies. For example, here is our rough estimation;

  • Complex feature-rich enterprise apps can cost: $50,000-$2,00,000
  • Medium complex apps: $40,000- $80,000
  • Simple apps with the limited feature can cost: $25,000-$40,000

Final Thoughts

“How much does it cost to build an app?” It’s a complex question to answer unless we know your requirements. However, being a top mobile app development company, we have tried our best to bring accurate information based on the project we have developed in the past. You can contact us if you have a project idea in mind; we can help you with the right estimation and build you the app you desire. Let’s connect.

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