How Much Does It Cost To Build An Application in 2020
So, how much does it really cost to make an app? I think that question has been asked like five gazillion times, right? And I think anybody who's going to ask me that question again I'm just going to refer to this video. So, in this video, I'm gonna break down the exact strategy to calculate the cost of your app And launch it in the most cost-effective way. So stick around till the end of this video. And hey if you're just meeting my name is Arsh Singh. I'm a growth strategist for entrepreneurs And I help you launch and scale your business using mobile apps. If you're watching this on YouTube and not yet subscribed consider subscribing it and hit the bell icon. So that you get notified whenever a new video comes out. And if you're watching this elsewhere consider following or liking my page. Alright so, let's actually go to a whiteboard and break it down for you so that you get the maximum value out of this video. Okay, so let's dive into this right now. And I get this question all the time that is Arsh, how much does it cost to create an app? And I'll tell you right off the bat. There is no magic number instead there are multiple factors at play to determine the cost of an app. Entrepreneurs have spent anywhere from five thousand to five hundred thousand in order to build an app that they want. But don't worry not all apps are created equal. Some are simple costing less and others are more complex. So how do companies calculate the cost of an app? Here is the typical way used by app dev companies to calculate how much your app is going to cost. And let's take a look at that right now. So the way they do it is by calculating and please do not mind the... It's been a while since I've actually written something anyway, so They look at the cost, and they look at the hourly effort and multiply that with the hourly cost so this is the formula that is typically used by most app dev agencies. One is that how many hours are they going to be spending on that specific feature in order to complete it And then multiply that with their hourly cost. Let's take an example to break this down even further. Let's think that you have an app which has five core features in it all right so let's say feature one two three four and five. You know this is what the app dev companies would think of is that, how much time, how many hours would they be spending on each feature So let's say that it's going to take 50 hours to do the first feature, and it's going to take 40 hours for the second one 70 hours for these hundred hours to do the fourth feature. Let's consider this is a complex one and let's say 80 hours to do the fifth feature. So that's roughly around let's say 340 Yeah. Let me write that a little better so that's roughly around oh..that's not even better anyway, so you get an idea right, so it's 340. Now if we take two different companies and two kinds of hourly rates into account then this is how much your app would cost to make Let's take a look. So the company one is going to be charging let's say $50 an hour And the company two is going to be charging 120 dollars an hour. Now considering that it's going to take 340 hours for your app to be built Let's take a quick look at that. So, 340 into 50 it would cost you $17000 if you go with the company number one considering that their hourly rate is 50 but not saying that cheaper is always the best option, but we're just taking that as an example. Let's take a look at the company number two $40800 so that's the company number one is going to charge you seventeen thousand dollars to build your app The company number two is going to charge you forty thousand eight hundred dollars and the reason for that is because their hourly rate, the hourly cost is substantially different. They're charging at $50 per hour, and they're charging at $120 per hour. This is behind the scenes how they typically calculate the cost of your app Right, so this is for a simple app which has five features a complex app might take roughly around let's say 1500 hours for the development and the cost for that would be Let's take a quick look at that as well. So 1500 with 50 that's $75k Wow that's an awful writing but anyway gets the message across right So if we look at it for the second company 1500 into 120 that's going to be $180K right so that's the difference for two kinds of apps, two kinds of companies, these are the numbers that you come up with So with a complex app it's going to cost you $75,000 with company A And with Company B it's going to cost you $180k. But now the question is that how do these companies define their hourly rates. So why is the company A charging $50 while Company B is charging $120. All right so let's talk about some of the factors that impact the hourly rates The clearest distinction between the hourly rates difference is going to be based on location. The cost will vary greatly if you go out to a company which is based out of the USA versus a company which is based out of Ukraine or India. You know the average cost of a company which is based out of the USA is roughly around $150 an hour if you go to Europe that's gonna cost roughly around $100 an hour if you go to Australia another $120 to $150 an hour range And in India it is starting anywhere from $20 to $80 depending on the quality. So a basic app in India might start at let's say $10k and a similar app in the US might be roughly at around you $50K or $70K The second factor which will impact the cost of your app is going to be the platform. The number of platforms that you're considering for your product. If you're going with just Android or just iOS the cost would be different but if you're going for both the platforms the cost will differentiate. It also differentiates from going with a native app versus a hybrid application. The third the most important factor would be the number of features like we took a look at this the example is that one two three four and five features all of them had a different hourly effort based on which we calculate the total hourly effort right So the features like... Do you want people to sign up using a social platform or just an email or phone number or all of those factors? And then do you want to add any location-based services? Do you want to integrate a payment gateway? Would your app involve streaming, multiple languages, ads, chatting or offline mode, so all of those factors will play a huge role in defining what's going to be the cost of your app. You know the number of features, the complexity, the number of integrations they all play a major role in defining how much effort would be spent in building your app and then in turn will actually, impact the cost of your application. The fourth factor which plays a huge role is the design aspect of your application do you want a bare-bones design or do you want amazing beautiful modern premium designs? The user interface and user experience driven apps they definitely stand out, but they come at a price tag. The visual complexity leads to more effort both from back and front and hence leads to your app being more expensive. The fifth factor is team and experience. The app dev agencies usually have different hourly rates based on different skill sets. Each member like a developer, a tester a designer, or a solution architect will have different hourly rates. In a decent sized company you'll typically have anywhere around four to give up to eight people working on a single project. These are the five major factors that impact the cost of your app, but you should also consider other factors like maintenance cost, infrastructure cost, you know it's important to make sure that you have a maintenance contract post release so that your app is future proof against any new updates by the operating systems which might just leave your app useless if not handled properly. In terms of infrastructure your consideration towards the server selections and database selection or any major integrations with ERP or CRM all of these will actually add up to the cost of your app Alright now let's talk about the two cost-effective ways to build and launch your app. The number one is MVP Minimum Viable Product. Start with a limited set of features. Your core competency what is that one feature that provides the maximum value to your users. Start with that and then build slowly. Apps like Amazon, Uber, Facebook, Instagram they all started as an MVP with a limited set of features and look at those brands today and the number of features that they have. So start with an MVP. The second approach is the SAAS approach. Now you may not find a SAAS option for all kinds of apps out there but there are plenty of subscription-based platforms out there today. In a SAAS environment the service provider will basically host the app for you, they will run it host it maintain it and update it and all you have to do is pay a small fee to set up your account or a small monthly fee whatever their monetization strategy is. So explore a few options see what works best for you based on your research and then take action.