Cost Estimation for Application development is really quite a complex process. Depending on the type of application and it’s size different types of specialists are needed to make it. Let's take a look at the Facebook example. The company built different variants of its most popular apps. Both Facebook and Messenger have equivalents in version Lite that are reduced in features and are dedicated to older mobile devices. Undoubtedly, these applications' cost estimation will vary significantly from the versions of the full apps.The scope of the project has a huge impact on the cost estimation process.
Every app has its own features, so to create the estimation, we have to know at least the client’s vision at best technical documentation. The whole process of estimating may last from a couple of hours up to several weeks, depending on the scope and other factors. Estimation also depends on the technology planned to be used.
Estimation can contain elements like:
- UX/UI/Graphic Design (All apps)
- Back End and Front End (Web app)
- Android and IOS (Mobile app)
- React Native (Mobile app)
- QA (All apps)
- PM (All apps)
Here comes the first question. Is web applications more expensive than mobile? Or is it the opposite? The answer is it depends. Usually of scope. Choosing to develop a mobile or web application should not be a comparison that can be less expensive. It should be strictly a business decision. For example, if the goal is to build a social media platform, we can assume that users would like to have easy accessibility, we can also check that research shows that 60% of Internet usage is from mobile devices. That brings to the decision of Mobile App development.
To build an application, you need a reliable IT team of specialists. The app development team structure also influences the cost estimation process. Every app element is estimated in Man Days intended for the development process. One Man Day is the amount of work that can be done in one workday by one person. Stakes for 1 MD may be different depending on the type of specialist. For example, the Android Developer Man Day rate is different from QA Specialist Man Day.
The project might require the participation of Development Team members like:
- UX/UI Designer,
- Android Developer,
- IOS Developer,
- React Native Developer,
- Back End Developer,
- Front End Developer,
- QA Specialist,
- Project Manager,
- Business Analyst,
Take a look at the structure of the team we ensure to our partner to develop an application called James Marketing Amplifier:
If you have an app idea and wonder how much it will cost to develop it, do not be afraid to ask a software house about cost estimation. There is no more effective way to estimate the cost of the application than a reliable specialist valuation. App development cost estimation is non-binding and 100% free of charge.
From the other perspective, you can inform us about your budget. It will surely help us to plan the work depending on capabilities.
Sometimes it happens that the budget is lower than the full scope prepared in the estimation. In that case, we recommend the Lean Startup method of project development. It means that we plan the work to develop the MVP (Minimum Viable Product) version, to be used by the early customers and to start monetization as soon as possible. MVP product might earn and also provide feedback for further development.
Many of our projects focus on building the MVP. It is an effective way to develop an app, and our clients willingly choose this approach (James Marketing Amplifier is one of them).
I know you may wonder, What is the cost of the MVP app, and how long does it take to develop it? Well, we have 2 articles that answer those questions in detail, but I can reveal that we estimate that building a basic version of the app (with minimal functionalities) will cost around $20,000 - $30,000, and our development team can complete it within 3 months.
What information do we need to create an app development cost estimate?
As a software house with +11 years of experience, we exactly know what data we need from the client to prepare a valuation. The more we know, the more accurate the estimation will be - it’s the main rule that determines the precision of the cost calculation.
There are several factors that we need to know to make the assumptions, these are:
- Business Model,
- Type of platforms to develop,
- Main Vision - how different functionalities should work,
- Budget - (Optional) but really helpful,
Basically, there are 3 most often scenarios that require a different approach to start work with:
- The customer has full technical documentation - in this scenario level of uncertainty is low, the whole scope is defined and described from a technical point of view,
- The customer has graphic mockups/layouts prepared -
- The customer has a vision of the application - this is the most uncertain scenario and most popular.
App Development Cost Estimate at Railwaymen: 3 steps
Every cost estimation, like every project, is different. Luckily, at Railwaymen, we already have an effective strategy to generate estimates for our potential clients, which can be described in 3 steps.
Step 1. Defining the scope and Brief estimation
It’s the first and shortest part of estimating budget and scope. It takes only a couple of hours to prepare, and still, it will be reasonably accurate. At this point, the app cost may have changed from 25-30% up or down.
This step is all about communication. At this point, we connect business requirements with technical. The result of this connection will be not only cost estimation but also a recommendation about the next steps to be done, like how complex the discovery phase should be or what is to be done during the workshops.
Step 2. Discovery Phase/Workshops
The best way to know the project better is to go through the scope of workshops. The customer is a master of his vision, and that’s why during one or two-day workshops, our goal is to understand the full vision and structure it in terms of technology. This step depends on the goal to achieve and might proceed in several ways.
The goal might be:
- To design a process inside an application,
- To find and connect optimal tools and features,
- To create the best user flow and experience,
- And more: click
Step 2 may take the form of one/two-day workshops, when all of the work is to be done comprehensively with the full participation of customer and project teams, or several numbers of shorter meetings and calls when most work is being done between them by the project team. Realization of this step may consume 1 to 2 weeks of work to achieve the expected result. The conclusion might take the form of a more detailed plan of project development, including required resources.
Step 3. Detailed estimation
We prepare it when we have the most information about future applications. It takes longer than the first one but is up to 95% accurate.
It consists of:
- Functional Breakdown, all features are broken down into smaller components, which makes estimation easier to estimate.
- UX/UI estimate - UX/UI designer estimate Man Days required to prepare layouts for the application.
- Developer Estimates - this step involves developers to estimate the Man Days of each component to be developed.
- QA and PM participation in the project - every project requires both QA to do manual or automated testing and Project Manager to control time, scope, and provide efficient communication between developers and customers teams.
In some scenarios, for example, when clients have full technical documentation, we can skip the first and second steps. It is an individual discussion for every project.
In the end, cost estimation is only an assumption, and it might change during the development process. Very often, because the scope is changing, and there is a need to add additional functionalities.
Also, every app development might have some hidden costs, which are not included in the estimation. The possible are:
- Infrastructure service, like Domains, servers, etc.,
- Integrated services costs - if one of the system features is to integrate with other services like SMS Getaways, Payments Providers, etc., there is a need to create an account and buy a subscription. For example, in one of our foodtech projects, we implemented two integrations - Apple Pay and Mada, and yes, it increased the final app development cost.
- Support services - 99,9% of projects require further maintenance done by the developers. It might be as well as a couple of hours per month as well as full time, depending on the project scope and size.
What makes up the full estimate?
Constant in all projects:
- Project setup and configuration,
- Internal meetings and communication, researches,
- Project Testing,
- Project Manager participation,
System functionalities split into features like:
- Online Chat,
Functions that we have implemented in social network app Frindow:
The estimation might be prepared in a simple or detailed form. Simple usually in PDF document, and contains the sum of Man Days for each role (f.e. Back End, Front End, QA, PM). Detailed is google Spreadsheet and contains estimation for each role for every single functionality.
App development cost estimate, and what’s next?
At Railwaymen, we focus on flexibility, so while developing a new project, we can decide whether to work in Time & Material or Fixed price models. It provides the possibility of choosing the most suitable approach, depending on the individual circumstances.
Preparing a cost estimation is not only a calculation about what amount of time the particular feature requires to be done. Estimation also has an element of consulting. We recommend technologies, integrations, the model of work, specialists needed on a project.
After we reach an agreement, we set up a project team - in most cases, the same team also prepares the estimation. And start the development using the Agile approach.
Most of our projects last for at least a couple of months. That's why we recommend payments for each month of work, both for a fixed price and time & material. To fulfill the transparency of cooperation during the app development process, we prepare weekly reports for every project we work on.
App development cost estimate - Conclusion:
As you can see, the process of app development costs estimation takes few steps, but (as a software house with +11 years of development experience) we can prepare reliable calculating even for extensive web and mobile projects. Cost estimation of the app is a free service. So if you are thinking about app development, nothing stands in the way of checking the actual cost.
I am aware that articles titled "How much does it cost to develop an app like Uber/Instagram/Messenger/Tinder?" are very popular on the Internet. Still, it is not the best way of checking application costs. Those apps are really advanced and are developed for many years by large development teams. First of all, are you sure your app needs all the features that are implemented in Uber? How about building MVP and checking what features the target group wants? Cost estimation based on an existing application is not always a good idea.
App development process does not finish with application release. To run a successful project in the long-term, you need to ensure constant app maintenance. So you'll have to handle those costs either.
I am sure that you are wondering what impact the application cost. Check our article: