How Much Does it Cost to Make an App for Your Business in 2021?

Despite being more than 10 years old, both Google’s Play Store and Apple’s App Store continue to see a daily increase in apps. More than 300 business apps launch in both of these stores. It shows that people are still investing in apps to reap the more than $139 billion customers are spending annually on and in apps.

However, the first question in investors’ and business managers’ minds is how much it will cost to build an app. Depending on where you look, you are likely to get figures ranging from $5000 to hundreds of thousands. Such a range is not helpful. A better approach would be to understand what really affects the cost of building business apps.

What Affects the Costs of Building an App?

The two biggest variables that affect the cost of making an app are the cost of labor per hour and the number of hours used. The number of hours depends on the complexity of the app, which we shall look at in some detail. The cost of labor depends on the location of the team you are going to hire.

According to Accelerance, hiring a junior developer in the US could cost $105 to $111 an hour. In Latin America, it would cost $35 to $44 while in Asia, it could be as low as $18-$24. The same variance is seen in other roles as well. Your project might need a business analyst, a graphic designer, a lead developer, and a project manager.

Businesses that use offshore development teams can spend up to six times less on labor compared to one that uses a team in North America.

The hours variable depends on how much time goes into business analysis, UI/UX design, project management, and functionality coding or development. You might also want to compare using an agency or a freelance team with a project manager.

Business Analysis phase

Any app idea has to undergo scrutiny from a business analyst. The analyst asks questions to ensure all the core and non-core features are well captured in the documentation. They also compare those features with existing apps in the market to understand what differentiates the idea. They can also help decide on the best technology stack for an app. The analysts remain a core part of the project to ensure development best practices are followed throughout. Their job is to help create a quote or a clear brief for your development team.

At least a tenth of the business’ app budget should be set aside for this phase.

Creating Clickable Prototypes

The next phase after business analysis is prototyping. It helps you go through the app’s UX before actual coding begins. Your development team is likely to use tools such as Adobe XD and Invision to do this. A further 10-15% of your budget will go to this phase.

A way to reduce the time spent in this phase would be to provide screenshots of apps you like to the development team. This helps them understand more quickly what you would like.

Coding of the App’s architecture and Functionality

A bulk of your budget will go into hiring the core development team to code the functionality and architecture of your app. At the minimum, you will need a mobile developer, a UI/UX designer, a project manager, and a quality assurance engineer. Having a team take on their specific roles simultaneously shortens the time to market for your app.

The team you choose to work with should agree to an agile development approach. The project manager should involve you in weekly meetings with the team to check on deliverables. The project manager should be your point of contact and they should always communicate in a timely manner. The development phase takes around 60% of the total costs.

Extra Features That Might Affect Cost

Requesting extra features on your app directly impacts the total development costs. However, some of these features might be necessary for a business to have a ‘Minimum Viable Product’ based on the market you are targeting.

A good example would be optimizing the User Interface of your app for tablets. Many apps do not support tablets due to the high cost of optimization. However, if a tablet version will help add extra features or your app is so popular that a tablet version is inevitable, then you must budget for such optimization.

During the business analysis phase, you must decide on the oldest Mobile Operating systems you will support. More than 18% of Android Users are still using Android 6.0 Marshmallow or an older operating system. More than 15% of iOS users are using i0S 12.4 or older. The older versions your app will support, the steeper your development costs will be. On the upside though, you will cater to a larger demographic of potential users. If your app is really for a niche sophisticated market, you might not have to worry about this.

Including an offline mode for your app is also likely to rack up the development costs. The developers must design a way to sync app data with servers and this might cost anywhere between $8000 and $12000 more. If the app will have push notifications to increase user engagement, more hours will be added to the development phase. Other features to consider would be analytics, payments integration, in-app messaging, and mobile ads.

Behind the Scenes Costs

In planning for your business app development, you must factor in server costs. This will be the case if the app loads content from a database. Common server solutions include Amazon Web Services and Google’s Firebase. Costs can vary from $6000 to $28000.

You will also need to get your paperwork done correctly. An app is your intellectual property, and you should patent it. A legal team should help prepare the Terms and Conditions of Use as well as Privacy Policy.

In the planning phase for your app, it’s crucial to have a marketing strategy in place. First, you will need to publish your app in major stores and have it reviewed. A proper description together with images is essential for App Store Optimization. It would be advisable to publicize the app in tech communities, invite journalists and tech reviewers to test the app, and publish reviews on their platforms. You will need to publish your own trailer for the app on your social channels.

It is also crucial to take the cost of updating and maintaining your app into consideration. On average, these costs average out at around 15-20% of the initial development budget.

Ways to Cut Your Business App Budget

As seen, the cost of a business app development varies greatly depending on the nature of the app. The Minimum Viable Product (MVP) for a simple business app could take as little as 1 month with a proper team. Enterprise apps with complex features take around 3 months to complete. Scalable mobile apps intended for mass marker consumers can take more than 4 months.

To minimize your budget, you could opt for frameworks that enable cross-platform development. These include Ionic and Xamarin. Cross-platform development can minimize development budgets by 30%. However, consult with an experienced software developer to ensure that cross-platform development will not hurt your app’s functioning. Apps with a lot of animation are best developed using native frameworks for iOS and Android.

Other cost-cutting measures include coming up with a Minimum Viable Product first and then improving upon it as it is being used in the market. In addition, you can use off-the-shelf functionality solutions as opposed to coding everything from scratch. Always go for SDKs with official support and not just any code snippets.