Developing an app can be a big investment, and the development process itself is usually very complex. This is why it’s important to be well prepared when you commission an app, so that you are able to get the best results, both in terms of price and quality. In this article, we’re going to take a look at the preliminary considerations that have to be taken into account when estimating a mobile app cost.
Understanding what goes into the cost of developing an app
App pricing can vary based on several factors. When contacting an app development agency for the first time, it’s important to be aware of these factors and how they may affect the pricing. These factors are: the complexity of the app, the platform, and the location of the development resources.
The complexity of the app
When it comes to complexity, we can divide apps into four categories: simple apps, complex apps, enterprise apps, and gaming apps. Complexity is the first factor that gets considered during the estimation of a price.
To begin, you have simple apps, which have a small number of different screens, and which sometimes use APIs in order to work with data. These apps do not generally support user profiles, and they generate a very small amount of analytic data. The development process for one of these apps can take anywhere from 35 hours to 400 hours depending on the amount of features that go into the final app. This type of project can be handled either by a single developer or a small team, and the app should be ready within 3 months.
Then there are complex apps, which have up to 10 different screens, and which connect to one or more APIs to retrieve data. They also make use of location data and user profiles. They may also feature in-app purchases or, in the case of e-commerce apps, a shopping cart. On top of that, complex apps are generally able to collect a wide range of analytic data and they may feature a central administrative console that allows you to monitor and moderate content. Depending on the number of features, one of these apps can take anywhere from 70 to usually 500 hours to complete and they are developed by medium sized teams.
Enterprise apps come with over 10 screens, connections to multiple APIs, and, in some cases, custom APIs. They have a robust user management system, and they are very complex in scope. The purpose of an enterprise app is to streamline internal business processes, sometimes in multiple departments of a single company. For example, an enterprise app developed for a logistics company may cover invoicing, HR, sales, warehousing, vehicle tracking, and various aspects of management. Development for an enterprise app can take anywhere from 140 hours. Here, you will need a large, experienced development team and, in some cases, more than one of those.
Finally, you have gaming apps, which are characterized by the use of 3D acceleration, multiple APIs, the gathering of user data and other metrics, in-app purchases, and the use of user profiles. Gaming apps can take anywhere from 350 hours upwards to develop. Gaming apps will require a varied team of experienced designers, media creators, and developers.
The platform
The platform the app is being developed for must also be considered. However, if you are building a native application for a single platform, the cost does not vary noticeably between different platforms. In the past, you had something called the “Android tax”, which referred to the extra cost of developing for Android platforms, but this is no longer the case.
The cost difference becomes clear when you are planning to launch on multiple platforms. Here you have a choice between developing several native applications or developing a single hybrid application. The latter option is less expensive, but it is not able to offer the full experience of a native app. This can be detrimental if you have a particular set of functionalities in mind. However, if your app is not aiming for specific native features, there’s no reason to develop multiple native apps for each platform.
The location of the development resources
It’s no secret that offshoring can help you cut costs – as much as 50% in some cases. However, it does come with its own problems. There may be cultural barriers, time differences, and a variety of other factors to take into account. That said, there are numerous offshore companies that have an established reputation for delivering high quality products, so if you shop around, you will be able to find the perfect balance.
Documentation
In order to get an accurate estimate and get the development team on board, you have to provide them with as much information and documentation as possible. Here are some of the documents that you should present to your development team, before requesting a quote.
RFP
A request-for-proposal will help you evaluate the responses from various developers more easily. To start, the RFP should define the project and its scope. This can include an executive summary of the project, a definition of the components and architecture of the app, and a series of questions you have for each vendor.
The executive summary should give a very brief explanation as to the focus of the app, and clearly define the various components and methods that will go into the app. Any technical detail will help the developer better understand your project. Finally, you want to have a list of questions for your developer, regarding issues such as previous projects and their ROI, the model of delivery, the quality testing tools and methodology, and other relevant factors regarding core capabilities such as development, design and quality control.
You can find a list of free RFP templates here, and there are many more to be found on the web.
Business plan
Your business plan contains a lot of information that can help the development team. While the RFP offers a detailed look at the specific product you are looking to purchase, the business plan offers a general view of your company and its vision. A business plan will help the developer see how the app fits in the bigger picture.
A business plan is usually comprised of an executive summary, a description of the company, a description of the target market, the marketing strategy, and the financial plan. The executive summary will help the developer understand the problem that your company is trying to solve, the solutions it is deploying, your unique value proposition, and your objectives. Your business plan will also likely cover your competitors, your customer acquisition strategy, and your monetization strategy, all of which are important factors that affect the final scope of your app.
Pitch Deck
A pitch deck is usually a PowerPoint presentation that is meant to provide a brief introduction to your business plan. It is best used in online or face-to-face meetings with potential investors, customers or partners. The pitch deck is meant to open the conversation and to give the prospective developer a quick understanding of what your company is about.
It should contain all the key information outlined in your business plan, but without being excessively long, including a description of your team, the problem you are addressing with your app/services, the solution you offer, the target market, the competition and your general business model.
Business model canvas.
The business model canvas is an alternative to the business plan. It was developed by Alexander Osterwalder, and it is meant to be a more agile and modern version, suitable for today’s highly dynamic business environment, especially within the tech field. It is less costly, less time consuming and much shorter than a business plan, and it covers 9 important business areas: key partners, key activities, key resources, cost structure, value proposition, customer relationships, channels, revenue streams, and customer segments.
Odds are that you either have a business plan, or you work with a business model canvas. When presenting a business model canvas to your development agency, you are helping them gain a clear understanding of how various components of your business connect and impact each other, and how you intend to maneuver your business in the market. The BMC also has your value proposition at its core, making it a key consideration in the development process.
Mobile App Cost: Key Takeaways
The cost estimation process relies on two factors: your understanding of the various cost structures and the developer’s understanding of your business, and your goals and the means of achieving them. However, the best way to get a good price and a great final product is to have as clear an image as possible of the app you want to develop and how you want to develop it.
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If you understand the APIs, development methodology, programming languages, and project management methods that will be used in your project, you are able to better estimate pricing and timelines.
Conversely, if the developer understands your business and preferences correctly, they will be able to give the most accurate quote and deliver a quality final product that helps you meet your objectives. Avoid upfront quotes, and make sure that you include a list of the features you’d like for your app, the services you need, the platform you want to develop for, and the ideal timeline for your business.
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