December 26, 2019
By: John Tomblin, Senior Solutions Architect
PhoenixBizz, a division of Sofvue, LLC
Printed with permission of Data Titan, Sofvue LLC, and the author
Determining the cost to develop a mobile app is a question we hear every day. In fact, it’s not just common, it’s usually the first question uttered after “Hello, my name is _“. The problem is that software development costs, whether for an application, firmware, mobile app or intranet database system vary widely. So, here’s the quick answer on how much it costs. Some apps can be built for under a few thousand dollars. Yes, just a few thousand dollars. These types of apps are extremely simple and usually only perform a few specific tasks. Conversely, “Big Apps”, produced by the largest software development companies, can cost $1,000,000 or more, with some costing over $5,000,000. $5,000,000 is extremely rare… but so is a few thousand dollars. There you have it — you now know what we know, but wait, there’s more.
As the old saying goes, “The easy part is conjuring the next million-dollar app idea. The hard part is building it”, but even as time-consuming as a project might be, a new app is released into the marketplace (globally), every 14 seconds. That’s a lot of apps!
Software doesn’t just materialize. It can take weeks or months to develop a solid, viable app. If you have programmers already sitting in your Phoenix or Scottsdale office, agile development might be the path of least resistance, but most small companies do not have programmers sitting in the office drinking coffee waiting for you to tell them what to program next. So, if you are like the other 99.9% of small businesses across the country, you will need to hire an outside contractor resource to do the job. That said, here are three key questions you want to consider.
1. DO YOU HAVE THE SPECS FOR YOUR MOBILE APP BUILT?
In other words, do you have a detailed specifications document, or even better, completed wireframes and a professionally written Statement of Work (SOW) detailing every module, component, and element associated with the project? Do you know your user-stories and use-case scenarios, and do you have algorithm examples that your programmers can read and understand? If you’re in Maricopa County, are your programmers down the street, stateside or off-shore? Do you need a Minimum Viable Product (MVP) or is a working prototype required? Do you have an Angel investor(s) sitting in the wings wanting to see a proof-of-concept or are you the key stakeholder or part of the investment team? Each of these different scenarios can have an enormous impact on your documentation requirements and costs can vary significantly in time and skillsets needed to complete the project. And a word to the wise… the single greatest cost consideration isn’t the hourly rate for programming, it’s the number of hours required to build the app, along with the other “invisible” costs that come with every project, large or small.
2. WHAT DEVELOPMENT PATH SHOULD YOU TAKE?
Over the past three decades, development choices haven’t changed much. Some of the vernacular has changed and there are certainly new hybrid models being used, but at the end of the day, the programming paths of today remain very similar to the paths of the 1980’s and 1990’s. So, here’s your path choices. You can either hire one or more programmers and have them work,
- 1. directly in your office,
- 2. you can hire a near-shore development firm,
- 3. a stateside firm or lastly,
- 4. an off-shore development firm.
I’ve seen hourly rates across the spectrum for mobile app development. As of this article’s release (December 2019), hourly development rates vary from the low-side of $15-$20 per hour for off-shore companies to the high-end of $85-$100 for programmers in an around the Phoenix area, excluding project management rates. Again, it depends on skill-sets, where the programmers are located along with how fast or slow, and how efficiently, they work. Also, if a programmer is charging $15 per hour and it takes him/her 300 hours to complete a job, have you really maximized ROI if the programmer you didn’t hire charged $50 per hour but would have completed the job in 75 hours? Bottom line…the hourly rate quoted does not reflect true costs. This is one of the key reasons you should never start a project until you have all the facts, starting with a completed specifications/Scope of Work document.
3. HOW MUCH WILL IT COST TO HOST AND MAINTAIN THE APP?
Once you complete your app’s development, QA and UAT, the last big piece to getting your app to market are hosting. Is your app going to be hosted exclusively on the Apple or Android network or both? To post your app on the Apple Store is $99 per year and for Google Play, $25 per year, but before you get too excited, know that Google Play charges up to 30% for transaction fees. Conversely, Apple does not charge a fee for apps that are free, but payment gateway processing fees outside the Apple network vary accordingly and can range from 3% to over 10%. Fees are typically based on the average shopping cart transaction amount and volume. You would pay less per transaction if you are selling 10,000 units of a product each month than a competing site that’s only selling 100 units for a similarly priced unit.
All this said it’s impossible to know exactly what it’s going to cost to build an app until you have a well-documented project-plans and (SOW), have identified the development path that best suits your goals and lastly, have a good idea whether you plan to launch your app on Google Play, Apple Store or both.