Understanding the Cost Considerations in 2022 when Choosing to Build a Mobile App for Your Small Business

July 19, 2022

By: John Tomblin, Senior Solutions Architect
PhoenixBizz a division of Sofvue, LLC
Printed with permission of Sofvue, LLC and the author

Let's be honest, mobile apps are everywhere. From food delivery, to pluming repair to e-learning, everyone is taking advantage of the app revolution and trying to pocket a slice of that multi-billion-dollar industry, but what does it cost to build a mobile app and is it the right decision for you and your small business?

Here’s the short answer.  Based on our nineteen years of experience in the space, the least expensive mobile app project in our “launched” column cost $40,000, and our most expensive was $3,500,000, but to be fair, this project was in the medical space, and for a very large company.

The holy grail is sweet.  The thought of creating a mobile app solution that adds money to your bank account while you sleep is the dream of many, but only a few ever achieve this level of success.  Let’s discuss why.

Factors that Influence the Cost of Mobile App Development

The cost of building an app varies by functionality. It also depends on the platform and app type, as well as how complex the project is and how many features it includes.  It also depends heavily on how many modules your app will offer, what type of UX/UI interface is required, and a hundred other factors.  That said, let’s take a look at some of the more commonly understood factors.

Development time: The more time required to develop your app, the more you will need to invest.  Even though you may have budgeted for a fixed number of weeks or months, this could change depending on how many changes are required along with other variables such as team size, who’s managing the project, who the project owner is, and how much input is required from senior stakeholders.

Platform: Apps built for Android require more resources than those designed for iOS because they use different technology stacks and programming languages. Some companies choose to go down the cross-platform path using tools like React Native or Xamarin, but at Phoenix Bizz, we made the switch in 2018 and now develop exclusively within the native code base preferred by Apple and Google, respectively.  To illustrate this point, if you own a Chevy and want to replace the engine, you wouldn’t go buy a Hyundai motor as an alternative. Can you make the Hyundai engine work?  Maybe, but if the Chevy engine is available, why would you use anything else?  This is why, at Phoenix Bizz, we use Xcode for iOS projects, and JAVA for Android projects.  It works.  Everyone knows it works and why break what already works?

Complexity: Complex apps are harder to build than simple ones because there are more things going on – from data storage management systems (like SQL databases) to graphics processing units (GPUs). 

To give you an idea, assuming app development at $40 - $60 per hour, some of the averages would like the table provided below:

 

App Complexity

Characteristics

Time

Estimate (at $40hr)

Simple app development

  • Has few features (like login, signup, search, notifications, admin panel, or dashboard)
  • Low-tech screens
  • Necessary UX/UI features

2-3 months

$40,000 to $60,000

Mid-level app development

  • Has complicated functional requirements
  • API integrations
  • More screens
  • Advanced features like real-time messaging, in-app purchases, payment gateway integration, etc.

3-6 months

$60,000 to $150,000

Complex app development

  • Apps with multiple modules, components, functionality and artifacts
  • Media processing
  • UI animation
  • Features like in-app calls, video chats, data synchronization with more than two devices, online streaming, etc. 

9+ months

From $250,000 

 

 

To calculate the precise cost of app development, Phoenix Bizz will also consider the following factors: 

* Design complexity

* Number of modules, components and “screens”

* Complexity of features

* Complexity of the database

* Administrator Interface (AI) design and functionality

* Number and complexity of third-party API Integrations

* Security protocols, such as SSL, HIPAA or GDPR

* Size and experience level of the development team

At PhoenixBizz, we follow a comprehensive process to determine an estimate of developing an app. To understand our process more, and how it works, speak with one of our experts. 

That said, let’s look at the cost of app development by type. 
 

 App Type 

Estimate Time

Estimate Cost

Android

900 hrs

$50,000 - $300,000

iOS

900 hrs

$55,000 - $300,000

Medical Appt App

1,900 hrs

$150,000 - $500,000

Hybrid App

1,000 hrs

$40,000 - $200,000

Web App

1,200 hrs

$60,000 - $300,000

Taxi App (Uber, Lyft)

1,600 hrs

$50,000 - $400,000

Gaming App

2,700 hrs

$225,000 - $600,000

Retail App

1,100 hrs

$50,000 - $150,000

Augmented Reality App (AR)

1,800 hrs

$200,000 - $450,000

Advanced eCommerce App

1,500 hrs

$60,000 - $250,000

Learning App

900 hrs

$60,000 - $225,000

Video Streaming App

1,600 hrs

$80,000 - $300,000

Restaurant App

750 hrs

$40,000 - $150,000

Shopify App

900 hrs

$30,000 - $180,000  


Your Options for App Development

Now that you have an idea of the range of costs, let’s look at the development options available to you. 

There are three options:

* Hire an agency

* Build an in-house development team and build the app inside your company

* Hire a freelancer

Let’s dig a little deeper. 

1- Hiring an Agency

Agencies have a lot of experience and resources. Also, they have many developers available to work with you on your app development project. They can provide you with the best guidance in terms of what technology is best for your business needs and even suggest feature improvements, and where needed, shave off features that are not needed. This could be very useful, especially if you have limited technical knowledge about building apps or websites.

You’ll get an expert who knows the ropes, understands the development cycles, how to manage quality product, along with Quality Assurance (QA), User Acceptance Testing (UAT) and pre- and post-launch needs. 

Also, most development firms like Phoenix Bizz are not interested in extending out the development cycle.  Because we work on a [fixed cost] development model, it’s in our best interest to give extremely accurate numbers.  Why?  Because we have multiple projects in development on any give business day of the year, and it’s critical we know how to carve up development time and resources.  If not, we end up having overlapping projects, and in our firm, that is not an option.

2- Building an In-House Team

If you want complete transparency and control over the app development in your company, building an in-house team is a good option. 

However, it may not be as easy as it seems. The most misunderstood factor in the software development field is the assumption by small business owners that programmers can “develop” your company’s technology, through programming the app -- but that assumption is wrong.  It is true that programmers “code” the app being built, but “designing” an app and “coding” an app are two very different skills.  Design comes first.  Coding comes second.  Programmers, stakeholders, the software architect, testers, and project owners must all work together to execute the software architecture “design” plans.  So, that being said, if you plan to build your software in-house, and that’s a viable option, understand your requirements and what skill sets you’ll need to hire and add to your team to make it happen.

3- Hire a Freelancer

Freelancers are best suited for micro projects, site repairs, adding content pages, and maybe even some low-level SEO.  If you are starting a new business and have limited capital, hiring a freelancer can be a good option. Freelancers can work on your project during the early stages of your company’s growth, assuming the requirements are simple and not difficult to communicate. 

One of the biggest issues we hear from small business owners involves the issue of “Freelance Ghosting”.  This occurs when a freelancer ghosts your project mid-stream and leaves you hanging.  Why would a freelancer do this?  Because they’ve landed another “gig” that pays more or offers more hours of work, and they quite literally abandon your project.  We hear about this often, so caveat emptor.

What’s the Solution?

Of course, we’re partial, but hiring an app development agency is always your first best option.  With companies like Phoenix Bizz, you’ll benefit from our expertise having completed hundreds of projects.  The best part about hiring an agency is getting a dedicated project manager or project owner who will work with you every step of the way and follow your instructional goals in order to execute your business goals. 

Final Thoughts

Mobile App development can be one of the most cost-effective solutions you can bring to your business, and the ROI it brings can be realized from [Time Saved] to [Income Earned] to both.  However, you still need to analyze the factors that affect the development cost, such as the developers’ expertise, the app's complexity, it’s platform, location, overall costs, etc. 

Phoenix Bizz is unique for two reasons.  First, we specialize in working with companies across the nation with less than 200 employees.  We are very proud of the services we offer the small business community, and we are happy to serve.  Second, we offer exact fixed costs.  These are not estimates… these are the actual turn-key launch development costs, start-to-finish, with an exact dollar amount.  We consider all the development factors associated with a project so we can provide you with an exact dollar amount, to the penny, along with an exact delivery date, using our MSD process. To learn more about both, contact us in Phoenix at 623-845-2747.

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