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Mobile App Development – Price and Expenses

Business | Development | Marketing - 16th October 2019
By Marek Hasa

How much does it cost to develop a mobile app? If don’t have any experience with creating digital products, you probably have very little clue when it comes to the necessary expenses. The amount of the initial investment is determined by multiple factors – this article will cover them one by one, following the sequence of a standard development process.

Your mobile app development will most likely include several steps which keep being repeated every time the app improves, scales up, adjusts its focus or acquires a substantial amount of new users. This is called iterative development. So what are the areas you will need to invest in as part of each step?

App Preparations

“Look before you leap.” In the field of software development, this saying is of utmost importance. Many inexperienced clients start with digital development head-first and want to get straight to prototyping, design or even programming.

Take our advice and don’t do that! Every project should start with thorough preparations assisted by developers, designers or a marketing agency. What are the points to cover here?

  • business plan – how will you make money with the app and in what time period? What percentage of your resources can you dedicate to operations and maintenance? Learn how to write a business plan.
  • target group – who are your users, what are they like, how can you motivate them to engage with the app? Read more about target groups.
  • USP – what is the added value of your app? What problems does it solve and how is it unique compared to other solutions? Define your USP.
  • marketing plan – how will you get the app to real users? Get inspired on how to promote your app.

How much will this phase cost you? You will mostly need to cover your own time and the time of your employees and colleagues, perhaps also the capacities of an agency that will be advising you. Make sure to reserve at least a few weeks for creating and polishing the concept.

Price: Resources covering your time and the capacities of your team

Prototyping and Design

What does the term “design” encapsulate? Design is way more than just “the looks” of an app – colours, fonts and a logo. The designing process deals with the whole concept, from thinking through each element of the app to projecting user journeys and the overall user experience.

Prototyping and designing will consume at least tens of working hours, hundreds if you want to create a truly successful digital product. If you are developing a commercial app, you should also invest some time into testing the prototype with real users to gather insights from potential customers. User testing and subsequent implementation of the insights will consume another bundle of hours and days.

Isn’t user testing just a superfluous luxury? Definitely not! Testing your prototype thoroughly will save you a great deal of resources in the long run. Even though it makes the pre-development phase more demanding, you will eventually get the money back because your development process will then be much faster.

Design Sprint Cost

There is no better tool for giving your app idea a shape and turning it into a tangible bluebrint than the design sprint. What will you be paying for here?

Design sprints generally last one week. The amount of necessary sprints is dependent on your app’s complexity. This phase will most likely cost you something between 3.5 and 12 thousand pounds – a sum accounting for 10-40% of the overall budget, based on the type of your app.

This investment will cover the capacities of a product designer, UX/UI designer, tester, and project manager, perhaps also a few more experts if the project requires a very comprehensive design approach.

Prototype Validation Cost

The process of prototype validation shares some common elements with design sprints. However, it is more suitable for concepts which are much more thought-through already – the goal here is to exteriorize your ideas.

When validating a prototype, fewer client workshops are necessary and the number of iterations decreases, which makes the required capacities and cost lower compared to design sprints. All you are paying for here is the time of UX/UI designers and a project manager.

App Design Cost – Summary

What is the key takeaway of this section?

  • the price of designing and prototyping your app will most likely be somewhere between 3 and 12 thousand pounds
  • creating and validating a prototype will take between 1 and 4 weeks, depending on the app’s complexity
  • do not underestimate the value of prototyping and user testing, this process can save you a lot of money in the long run

Design & Prototyping Cost: £3.500 – £12.000

Programming and Coding

The most demanding phase of the whole development process consists of coding, programming and testing. The time of quality developers is very valuable, their hourly rate can go as high as hundreds of pounds. Therefore, a crucial prerequisite for this phase is a set of documents explaining clearly all the features of the final product.

Regardless of the scope of your app, this will most likely be the largest item of your budget split. It may be that some small yet very original concepts require more investments in the designing and prototyping phase. Nonetheless, 50-80% of a typical app’s budget goes to coding and programming.

What will the programming cost depend on?

Development Methodology

The way you develop is a crucial determinant of the overall price. If you opt for typical project management, you will know the scope of necessary work and total project cost prior to the development. Contrarily, if you decide to adopt the agile development approach, you will first define a complete a smaller part of the project before you proceed with another one.

If you choose the former approach, mind that it is absolutely crucial to write a perfectly detailed specification of the product because:

  • things not covered in the specification will require extra work, resulting in unexpected increases in cost
  • every adjustment to the specification will again increase the price

That’s why we generally recommend agile iterative development. Create the design of your app’s first version, bring it to life, gather feedback from real users and then proceed with more features and improvements. The initial price serves as an estimate in this case, the actual cost can only be calculated for one or a few iterations. This approach has several advantages:

  • you receive and control the work frequently, any issues can be identified very early
  • the development process is flexible, you can react to the changes between iterations without the need to stop the development process and change the initial specification
  • features or details you happened to forget about can easily be added to the next iteration
  • if you decide to change your business plan or objectives, agile development enables you to hit the brakes faster

Technology

The choice of technologies will greatly influence the app’s price. However, you should never base this decision solely on the cost. What are the options here?

Hybrid development will lower the necessary expenses but also limit the app’s possibilites. A hybrid app will probably be more difficult to scale up and it might not run very smoothly on older devices.

Native development will not result in these issues. However, you can expect a substantially higher cost because the app needs to be developed for each platform separately.

Is it necessary to invest in native development? Not always. It depends on the type of your app and long-term plans. A quality digital agency will advise you on choosing the most suitable technology and discuss all potential pitfalls with you.

Team

It’s probably of no surprise to you that the ideal size of the team is dependent on the type and scope of your app. Developing the initial version of the app over many months doesn’t make much sense, it’s crucial to enter the market as soon as possible. Another important factor to take into consideration is the hourly rate of programmers, of course.

What is the average hourly rate? The same rule as in many other domains applies – the rate greatly depends on the level of experience. A price of tens of pounds per hour signals a junior developer, quality agencies with experienced programmers often charge hundreds of pounds per hour.

Carefully consider how serious you are about the app and what is your target level of quality. If you’re only working on a pilot project or developing an app for fun, partnering with junior developers might be optimal. However, if you are developing a commercial product which will be an integral part of your business activities, definitely go with quality, well-qualified and experienced developers.

Features and Complexity

The fact that the total app development cost will primarily depend on the app’s complexity is quite obvious. Some of the important factors are:

  • using hardware smartphone features such as a camera or gyroscope
  • working with maps
  • the scope and complexity of your back-end
  • processing payments
  • implementation of a third-party software (for instance, an accounting solution)
  • enabling communication between users (chatting)
  • dealing with calls, voice messages or videos
  • processing videos or streaming content
  • collecting and analyzing data about users’ behaviour
  • AI or machine learning implementation
  • working with AR/VR

This part doesn’t allow for a general price estimate. However, you should keep in mind that each of the elements above increases the total cost, especially the use of emerging technologies such as virtual reality or machine learning.

Marketing

The marketing part of your budget split is not directly link to the development process. However, if you are developing a commercial product, this area is absolutely crucial for the app’s success. Make sure you develop a quality strategy and dedicate a reasonable part of your resources to getting the app to its users. What are some of the important factors determining your marketing budget?

  • are you creating a commercial app, or an app for internal use?
  • is the app merely complementing an already existing product, or are you coming up with a brand-new service?
  • are there many apps on the market that will probably compete for the same user segment?
  • do many users search for the problem your app is solving? Is there already an existing market for the app?

Agencies and Advertising

If you decide to partner with an ad agency and promote the app by means of advertising via traditional media channels such as print, TV or radio, your investment will probaly go (much) higher than 40 thousand pounds.

PPC and Ads in Stores

Advertising in online stores with apps works pretty much the same way as PPC ads in search engine results. If you want to attract a substantial amount of new users to your app’s page in AppStore or Google Play, in-store advertising will probably be a necessity. You can generally expect a cost per download between 2 and 30 pounds.

There are many more ways how to promote your app, of course. If you’re interested in this topic, read this step-by-step guide to marketing your mobile app.

App Operation, Maintenance and Updates

How much does it cost to operate and maintain an app? You will be paying mainly for:

  • hosting – a server on which the app runs
  • support and updates for new versions of operating systems
  • analytics and further development

The required resources for this continuous follow-up phase greatly vary but generally speaking, you should prepare around 10% of your app’s development price per year.

Cost: at least 10% of the development price each year

Examples

Simple App

Brief:

A straightforward mobile app for your sales team. It will allow your employees to show a product catalogue to clients, go through their purchase history and make the next order.

Solution:

You will take care of the preparatory phase. The business objective and financial outcome will be clearly defined from the start – save your sales team some time, facilitate communication between departments and speed up the ordering process. Prototyping and design will not take too much time, the prototype will be tested with your own sales team (future users), and the actual development and integration with your current ordering software will be fast and smooth.

Price: £8.000 – £14.000

Typical App

Brief:

Let’s zoom in on a simple MVP of a cooking app. What will it offer? Users-chefs will be able to post their own food offers, customers will then be able to choose a number of portions and pick-up time. The app will also enable card payments and basic chatting between users.

Solution:

This app will be more complex than the first example. We will first need to clearly define the MVP and all the features absolutely crucial for the initial phase. Prototyping will take two weeks and the subsequent development will last around two months.

Price: £14.000 – £25.000

Complex App

Brief:

Let’s stay focused on the app from the previous example, only this time we will not be developing an MVP but a more complex digital product. The chat will allow for emojis and sending pictures. The app will also cover billing through an integration with a billing software. The back-end of the app will allow the client to analyze users’ behaviour, financial flow and provisions.

Solution:

This version of the app ismuch more demanding compared to the MVP. Therefore, we will strongly advise the client to split the app development into phases and add the features one by one. We will do several rounds of prototyping, design, development and users’ behaviour evaluation. In the meantime, we will identify the problems the real users are encountering in the app and polish the user experience to perfection. Feedback from users will always serve as a foundation for the next iteration. The final product will be perfectly user-friendly and ready for a big commercial success.

Price: £40.000+

How low can I go and still end up with a solid app?

If you want to see your app succeed, a budget less than 5 thousand pounds won’t suffice. Even simple mobile apps require a larger investment. And more complex apps require far more funds.

What if I am on a tight budget?

If you don’t possess a large budget, don’t worry. Here are some tips that should help you succeed even with limited resources:

  • before you start developing the product, conduct a proof-of-concept test to see if users actually want the product or not
  • make your MVP as simple as possible – focus on one feature with the largest added value and add the rest later
  • as soon as you have your first version with some real users, finding investors will become much easier
  • partner with a strong player in your field who will be able to help you with funding, marketing or attracting the first users
  • focus on organic and viral promotion activites with social media tactics, quality content and guerilla marketing efforts
  • choose a technology which will lower the cost but at the same time allow for scaling and further adjustments in the future
  • don’t try to save money on prototyping and testing – a smaller app which is positively accepted by users is much better than a large app which doesn’t make any sense in the real world
Marek Hasa
Written by
Marek Hasa
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