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How Much Does It Cost to Create an App? What is the true cost of creating an app for your small business? A lot more than you think.

By Andrew Gazdecki

This story originally appeared on Bizness Apps

Lane Oatey/Blue Jean Images | Getty Images

Asking how much it costs to make an app is rather vague.

It is like asking, "what's the price of a car?" Well, what kind of car are you trying to buy? A used one with high mileage or a brand new, exotic, luxury car? The same questions can be said of mobile apps.

If you have ever searched for the cost of creating an app (perhaps that is what brought you here), you probably got a lot of different answers.

The answers can range anywhere from a few thousand dollars to a few hundred thousand dollars.

Why? Because mobile development involves a lot of different variables so the final price is going to change depending on those factors.

The cause of the sporadic price estimates of mobile apps is the technology is relatively new and evolving. For example new hybrid app development technology caused the average cost of app development for a small business to drop from $49,000 to $38,500 in February of 2015.

As new tools and strategies emerge, the price of producing an app goes down because developers are able to leverage these tools to reduce their time frames and thereby the overallcost of their labor. In other words, the more mobile evolves, the easier it is becoming to make apps, which means affordable alternatives are appearing.

In fact, plug and play development technology offers the ability for a small business to build their own app, with dozens of powerful premade functions, clean templates and more.

To understand the cost of creating an app in detail, we will explore the different variables that affect cost, as well as how a simple app maker solution may help.

In-house vs. outsourced solutions costs

In most cases, we know that doing things in-house can be better, but is way more expensive. This is exactly why many companies turn to mobile development firms. But, that doesn't mean the off-shore or in-house conversation is over because some of these firms don't have all of their own resources in-house.

They may have their design teams immediately available on hand, but outsource their engineering and development needs elsewhere. This saves them money, but you'll still end up with an expensive "in-house" development team.

To help protect yourself from being taken advantage of by mobile development firms, you have to do your due diligence. Since building an app from the ground up is a big expense, it will be well worth your time (and budget) to do your homework.

Ask any prospective development team or agency a lot of questions.

  • Who will be working on my app?
  • What apps have they worked on before?
  • How much will the the app cost?
  • How much time will the app take to create?
  • How will you make my app? Native code or hybrid code?
  • How much does it cost to create the iPhone app?
  • How much does it cost to create the Android app?
  • Who handles development and engineering?
  • How do you calculate app development cost?
  • How can I get the cost down on my mobile app?
  • What is the average price to create an app with you?

Then once you get into the the overall price, try breaking it down into stages of development with more questions.

Planning, designing, engineering features, app infrastructure, mobile app administration, testing and Q/A costs and launching your app to the app stores -- what are the cost of these stages of the app development process? Again, ask a lot of questions.

  • How much will the cost to plan the app be?
  • What is the cost of designing the app?
  • How much will it cost to engineering the features?
  • What will the ongoing infrastructure cost?
  • Are there any mobile app administration costs involved?
  • How much will the testing of the app cost?
  • Then finally, are there costs to deploy your mobile app?

If you aren't satisfied with the answers or they refuse to let you communicate with individual members, you are better off taking your business elsewhere.

Waterfall vs. agile costs

The main differences between these two common app development strategies are planning and speed. Waterfall developments make a detailed plan of each process, how long every step will take, the costs, etc.

This, as you would expect, extends the timeline by a bit. However, there is a lot of value in planning. At the end of the project, you will have neat records of each process and how long they took. Not only does this make it easy to improve the development and design process for any future apps, but you will also have a much better idea of the costs and timeline.

Apps created with the agile strategy, on the other hand, use a lot less planning. Developers gets right to work and move quickly. To someone who desires control and organization, the lack of structure in this approach may be alarming, but it has its perks.

Aside from reaching your launch date sooner, the agile approach is also more adaptable and according to the data, this approach is three times more successful than a waterfall approach. Since developers code and design on the fly, it is easier to change directions to meet emerging needs, whereas the waterfall approach is stuck in its stone form, planned structure.

There are drawbacks to moving quickly, though. Costs can easily pile up because developers are moving in quick spurts. Before you know it, the project may be grossly over budget. If you are under a tight deadline (perhaps you want to get an app released before the holiday shopping season), you may have little choice but to choose the agile approach.

Fixed app cost vs. hourly app development cost

Typically, but not always, the type of pay system is based on the above development approaches. Waterfall developments are more likely to be a fixed fee because everything is planned ahead of time. During the planning stage, the client (you) and the developers reach an agreed price to spend on the design and planning phase and another price for the actual development of the app.

Sometimes, as you change and tweak your process, the fixed price has to be altered. A lot of firms will use work orders to track the costs of these changes. Thus, your "fixed' price is actually not fixed and can be greatly affected, depending on the number of work orders needed.

To top it off, after your first release, you will need to update your app as well. This price tag can range between $70-$100/hour after you launch.

Agile structures always follow an hourly or labor rate that pays based on the amount of work or effort needed to produce. Before starting, it is important that you fully understand these rates and how they are tracked, especially if it is hourly.

There are several classifications of developers. These range from independent contractors up through an extravagant class. Depending on what class of developer you hire, your hourly rate can range anywhere between $75/hour up through $800/hour.

A good development firm will have tracking software in place that will allow you to see the progress made and how muchtime is being put into each stage. While choosing to go with an hourly or labor rate is generally more expensive, a lot of people find the quality is higher because it encourages developers to continue working diligently, whereas a fixed price can sometimes cause them to make shortcuts to hasten the deadline, as they are being paid a set amount, no matter howmuch work they end up putting in.

In either case, you have to be prepared for your developer to go over budget. On average, you will spend about 20% more than you expected.

The affordable app builder alternative

It is easy to look at all of these variables and simply see dollar signs zooming by, but don't be discouraged. Many of these costly variables are only associated with building an app for the ground up and there is an alternative solution in the forms of content management systems for app development.

You've all seen the commercials for DIY websites that look and act professionally. You can do the same with your app. With a small team of people who are familiar with the basics of technology, you can have your app up and running in a few days.

Many of these app builder solutions are responsible for putting high functioning, quality apps in the hands of over 200,000 small businesses, at an affordable price. If you've ever wondered how your local pizzeria could possibly afford such a clean looking mobile app, an affordable app builder is the answer. So, you can stop spreading those rumors that they must be "connected."

What makes a DIY app builder so affordable?

Instead of building every app from the ground up, an app building content management system will offer a wide range of features, design templates and other options that allow you to piece together your own app, using a platform that has already been created, tested and proven effective.

Thus, you don't have to tear any hair out over deciding between which development firm to choose; you are the developer! With pre-built features and templates, no programming expertise is required; you don't need any background in mobile development. And, a high quality DIY app builder offers an expansive library of webinars, step-by-step guides and helpful articles to turn anyone into their own app design pro.

Waterfall or agile approach? You build your app on your own time. The beauty of choosing a app creation platform is the comfort knowing that the app will be bug and glitch free. Once you are ready to hit that publish button, you are all set; there is no testing or planning necessary. In addition, the cost of building an app dramatically goes down when using a "out of the box" solution.

And, as the mobile app industry progresses and evolves, your mobile app continues to update and evolve with it -- so there's no paying for upgrades. Again, driving the cost of your app down because you don't have to consistently update it. By staying current with emerging trends, a DIY mobile app creation platform will continue to offer all the features and tools your customers are looking for in a mobile app. So, you never have to worry about having an outdated app or worry about the cost of your app going over budget.

The bottom line of how much does an app cost?

From a price standpoint, a pre-built app creation platform blows the costs of a ground-up, custom app out of the water. Custom apps can cost as much as $500,000 or higher with a median price between $37,913 and $171,450 as the median price.

With a DIY app builder, the mobile app you build only costs a small monthly fee of around $59/month to maintain, which is likely to include all the continued support, tools and updates offered with your mobile app. A lot of companies forget that the cost of an app is ongoing due to maintenance and keeping the app up to date.


So is there an actually bottom line when it comes to the cost of developing an app? It all depends on what vehicle you take to get there. If you are looking for a luxury app complete with customizations beyond what most business need, you can expect to pay a hearty hourly fee anywhere between $75-$800/hour.

The data shows that most often the final number comes somewhere between $39,913 for a small simple app, but it can reach well beyond the $500,000 mark.

Keep in mind that custom solutions are not necessary for all businesses. If you are looking to build an app so that your business can compete in the mobile market, there are solutions out there that can get you in the game for as little as $59/month.

So, what is the true cost of creating an app for your small business? A lot more than you think, but also a lot less if you use the correct tools.

Andrew Gazdecki

CEO of BiznessApps

Andrew Gazdecki is the founder and CEO of BiznessApps

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