How Much Does Custom Software Development Cost?

By Joshua Gross, 26 January, 2022

We live in a time of opportunity. Entrepreneurs and businesses can spring up out of nowhere with nothing more than an idea and some software and make it big. Custom software development is all around us: SaaS platforms, web apps, mobile apps, games, and so on.

Custom software development is readily available, from freelancers to high-class agencies and everywhere in between. If you have an idea but not the programming skills to implement it, the logical conclusion is that you'll need to hire somebody to help you complete your project.

The only question is, how much will it cost?

A Simple Average

In our estimation, the average cost of having custom software developed is somewhere between $50,000 and $500,000.

This estimate is a decent average range that considers many of the factors that go into developing software but not the factors that go into designing software. If you're not sure what that distinction means, read on.

Remember that this can vary a lot depending on the scope of your project as well. It can even vary based on the geographic location of your developers. For example, some factors could include the number of developers working on your project and the project's duration.

Budget software developers based overseas might only charge $10-$20 an hour, while high-end developers working for domestic agencies can range from $150-$200 per hour. Finding the right balance of talented developers within your price range can be the most significant roadblock to developing software that works.

What Goes Into Creating Software?

If you're an entrepreneur with an idea, a dream, and a budget, you might underestimate the amount of work that goes into bringing that idea to fruition.

Mapping and Wireframing

First up, you need to take the idea into something more than just a concept. It would help if you mapped out the flow of the proposed software. How are people going to use it? What features are necessary, and what additional options do you want it to have?

Wireframing is the process of converting that design concept into something more tangible. It's "designing" the software before any code is laid down. It starts to look at the organization of design elements, the arrangement of a page, and more.

This step is also where the scope of the project is determined. Is your platform a simple unitasker? Does it need multiple pages, layers-deep, to support different functions and features? Does it need user profiles, account management, API access? Will data be stored locally or on a remote server? Is it an app, SaaS, web-based, hybrid, a combination? Will it function on Windows, Mac, iOS, Android, the Web, or various platforms?

Feature creep and scope creep are the bane of any good project. "Wouldn't it be cool if we added ___?" is one of the most challenging questions a project manager, designer, or entrepreneur can ask. That one question has the potential to add tens of thousands of dollars and months of development time to a project every time it's asked.

Mapping a piece of software is generally boiled down to "screens." A screen is a singular view of the program a user sees, from the login page to the home page to pages for each feature. The number of screens involved in a piece of software determines its size.

  • Small: 1-25 screens.
  • Medium: 26-40 screens.
  • Large: 41+ screens.

This estimate, of course, varies a lot depending on the purpose of a piece of software. In broad, general terms, one screen is usually an average of around $5,000 in budget. Thus, small apps range from $5,000 for small unitaskers, while complex programs can cost $500,000 or more.

This functionality is also where significant decisions are made to create custom software or utilize existing libraries. Many programs can be essentially thrown together using functional libraries in existing code frameworks, slapped on AWS or Azure, and be up and running in short order. Others require extensive custom development.

Time to Market

Another factor that can adjust pricing is when you want to launch your product. In some cases, you have an immediate demand you want to meet and launch as quickly as possible to avoid competitors undercutting you. Using a Minimum Viable Product model, you rush a launch, which requires a higher initial investment in a larger development team.

You can take more time to do it and work with a small team over a more extended period. In other cases, you might have the luxury to develop your idea without the risk of competition or a fading market. These factors can adjust costs quite a bit.

Creative Design

Creative design is the phase of software development where the wireframe is pinned into place, making creative decisions. Where is the UI located? Where is the logo, how big is it, how prominent is it? What are the primary and secondary colors, and what are the font choices? What images, illustrations, and animations are involved in the program?

Shifting a UI element is much more complicated than just moving a button in a wireframe, for example. That UI change can have cascading ramifications across the app's design. Every decision here has repercussions under the hood, which is why they often need to be pinned down before actual development can begin.

Coding and Infrastructure

The actual software development process involves iterative coding, testing, rendering, and more. Once the program's design is pinned down or as close to it as possible, development begins. Our price estimates for this post are primarily focused on this phase; the design, mapping, wireframing, and support are additional costs, typically the salaries paid to the people tasked with accomplishing them.

Remember, too, that coding doesn't just mean the app itself. It also needs to consider the server infrastructure, if any, that is necessary to run a program. If your software runs on the cloud or uses a cloud server to sync and manage data, you need both the client app and the server back-end to be developed in conjunction, so they work together. One cannot work without the other.

Testing, Compliance, and Convention

As an app is developed, testing begins once it reaches the point of basic functionality.

Testing involves several aspects:

  • Testing functionality. You want to ensure that the core features of the program work, after all.
  • Testing bugs and breaks. How does your program handle it if a user performs an unexpected behavior – anything from putting code into a text field to pressing two buttons at once?
  • Testing for compliance. Some industries have regulations like data handling or accessibility; your software must adhere to these rules.
  • Testing for conventions. Even simple things like the location of the X to close a window in the upper right are not actually set in stone, but it's a convention that is important for intuitive usability.

This step is an iterative, ongoing process and should not be ignored.

APIs, Data Migration, and User Setup

How do users get set up with your program? Can they use OAuth to authenticate themselves using Facebook or Google, or do they need to make an account manually?

Do you have a competitor, and do you want users to migrate their data from that competitor? If so, how can you get that data from them, and how can you import it into your system? Do you want to offer an API to link to other services or other service APIs from your program? All of these are essential considerations.

Ongoing Support and Development

Many programs start small and gradually add features over time. The basic app might cost only $50,000 to develop, but the ongoing development expense to add features continually increases the overall budget.

These upgrades are offset by the app's ability to roll out and start making money when the initial development is complete. If the program is compelling enough to attract users and paying customers, you can roll that money into further development to add features and functionality to the program. This continual process, combined with ongoing support, maintenance, and operating costs, is all part of doing business.

This step is also where specific additional considerations can come into play, such as translating the program into a different language for broader geographic support and access.

What the Industry Says are Average Costs for Software Development

We are far from the only people to estimate the cost of custom software development. What do other agencies claim these costs are?

Carlos Feliciano: $40,000 to $50,000

"Typically, the cost of custom software development ranges from $40,000 to $50,000. However, this range is very broad; this is because there are numerous aspects that contribute to the costs of custom software development."

Ann Mooney: $50,000 to $250,000

"In our experience, many custom software projects fall somewhere between the $50,000 and $250,000 mark to design and develop the application. It's a broad range and probably not that useful if you are ready to put a number in your budget. That's because software can mean anything from a calculator on your phone to a full enterprise billing system that supports millions of users. No two custom-built applications are the same."

Additionally, Ann Mooney estimates that creative design can cost an additional $8,000 to $16,000.

Intersog Blog: $50,000 to $250,000

"Small apps would usually start at around $50,000 to $75,000; medium apps would go at around $75,000 to $200,000; and if you are looking to build a large app with more than 40 screens, you'll be looking at $250,000 and more. The more screens you have, the more time it will take to create them."

Stan Burenko: $50,000 to $250,000

"Ultimately, it comes down to the people-hour and the technology stack involved in building the software. Based on our experience, the ballpark range of software development costs is between $50,000 to $250,000. The lower price tag fits a simple app that takes less than 700 hours to develop. If you're building a multi-platform app with a server-side application, the fee is likely in 6 figures. For example, a simple social media app for one platform may cost $50,000. However, building the same app for the Web, Android, and iOS, will cost approximately $137,000 with 2,750 hours of development. If you're building apps like UberEats, expect a figure of around $150,000 for 3,000 hours of work done."

Hardik Shah: $10,000 to $1,000,000,000

"There are three types of software: enterprise, mid-market, and small scale. Each type affects the pricing of development differently based on the level of software. Enterprise-level custom software needs quality developers and may range between $200,000 and $1,000,000,000. In comparison, mid-market software may cost you about $45,000 to $ 6,000,000, whereas the price of a small-scale software may range between $10,000 and $550,000."

Roman Kukhta: $15,000 to $250,000+

"Custom software development prices vary from $15,000 to millions of dollars. Quite a gap, right? That's because no two custom software applications are identical, despite the fact that they are made up of the same materials and modules."

The Average of Averages

So, taking estimated data from above, we can see far too many variables to make a consistent average estimate. Everything can play a role, from the project's scope to the timeline or the geographic location of your developers. Small apps designed for a single platform and a single function can cost as little as $10,000 to develop. In contrast, large enterprise-scale or governmental projects can cost hundreds of millions of dollars and years of development time for large teams.

The best method to estimate the cost of your software development project is to speak directly with a company, agency, or developer who will work on the project. Through pinning down the core concept and building a project brief, you can work with someone like us at Planetary to develop an idea of the overall project and its budget. Then, once you've firmed up your plans, you can sign a contract and get us to work.

If you'd like to get a quote or if you'd simply like an honest conversation about what it will take to bring your concept from idea to launch, we'd love to hear from you! Drop us a line and we'll put together a gameplan that works best for you.