How to budget app development: A practical guide

Every appreneur wants to know,“how much does it cost to develop an app?” Sadly, this isn’t a kind of product you can put a price tag on: there is no right way to assess such a complicated and multifaceted process as software development.

While online estimators like can give you an idea of the possible app development cost, such quotes tend to be pretty generic and limited to specific app categories, e.g. social or eCommerce. They also often lack enough detail, which may even eventually double your software development cost.

Despite the fact that the actual cost of app development is somewhat of a guessing game, a basic understanding of how much money it takes to get the ball rolling can be vital. If you can’t plan your budget properly, you might run out of cash too soon.

To address one of the common concerns voiced by our customers, we’ve decided to share our tips on budgeting for app development in this article.

Budgeting 101: How to budget app development

The cost of app development depends on many things, most of which are not even directly related to the engineering.

Here’s what you should do to plan your mobile app development budget ahead of time:

Define the purpose of your application

Obviously, the budgets involved in creating a high-end consumer-facing app for advanced users and a simple app for internal use only, will be very different.

Thus, knowing your users, their problems, and needs prove to be rather useful when you need to define the features for your app. It can also help you prioritize them in the future.

The purpose of your app defines its scope, complexity, and technical requirements. That’s why it is important to understand what you really need before you go looking for money to implement it.

Explore the available sources of funds

To plan a budget for your app development, you need to understand how much money you will be able to raise and where you should go looking for it. There are tons of options for appreneurs to source funds: bootstrapping, crowdfunding, venture capital, grants, etc.

If the sources of your funds are limited, you should start lean and build a visual prototype to try and find investors as soon as possible. There are also many options to build an app on a budget, that is, if you don’t want to seek investments at all.

Furthermore, there’s always a chance that your app will start to pay off at some point. If you are the lucky one, you can put this money to work and further scale and improve your app.

Assess the scope and complexity

The scope of functionality and technical complexity of your product are the two factors that have a major impact on your app development cost. For example, building an Uber-like app is a time-consuming and costly undertaking. At the same time, it is very easy (and relatively cheap) to create a default Magento website.

Defining and documenting the requirements, both technical and functional early in the process can really help you efficiently allocate your resources. Plus, detailed specs usually yield a more accurate estimate.

Adding advanced features such as data analytics, machine learning (ML) and artificial intelligence (AI) to your app will also lead to a higher development cost.

There are also many other technical aspects that can have an impact on the duration and cost of software development: your target platform choice (iOS/Android native or cross-platform), the choice and the number of third-party integrations, backend hosting, etc.

Set up the development team

The first, and the most important choice you need to make is weather to go with in-house development or outsourcing. Of course, the cost for employing a full-time engineer in California and contracting a freelancer from Pakistan, will be different. Software development prices vary greatly from country to country (also, from city to city).

Plus, there is always a higher risk involved with cheap app development.

Furthermore, the cooperation model you choose can also impact the bottom line. While freelance workers can offer certain perks such as low cost and flexibility, hiring a managed development team gives you the reliability and quality of an in-house team, but at a lower cost.

Keep an eye on the process

It’s no secret that most startups fail because they run out of cash. That is why keeping track of your expenses is so important. If you hire a professional project manager, he or she can help you gain better control over the finance side of your app and reduce your burn rate.

You can rely on a professional project manager to optimize your burn rate (if needed) by breaking down the whole development process into smaller iterations. Thus, you can eliminate the risk of wasting thousands of dollars invested in the product.

Bonus tip:

Always start with an MVP, a barebones, cost-efficient version of your product designed to simply test your assumptions. This can save you months of hard work and thousands of dollars down the road. Prioritizing the features first and scaling your product later on is a proven strategy for building a lucrative and reputable app when you have a limited budget.

Additionally, it is always easier to find £10,000 for an MVP to test out your idea than it is to raise £100,000 for a full-fledged product that may end up only gathering dust on the App Store.

A sample budget for app development: 10 expense items that influence your bottom line

The main problem in mobile app development cost estimates is that the actual engineering represents only a small fracture of a very complex and labour-intensive process. When you plan a budget for your app development, there are many more things to consider.

Quite naturally, the main expense items in a typical budget for app development correspond to the basic steps in any software development process:

  • Project definition(requirements analysis, competitor research, specs development, etc.)
  • UX/UI design and prototyping
  • Software development
  • QA(testing and bug fixing)

While it is possible to calculate the budget for each of the listed app development stages (assuming you have a detailed estimate and know the provider’s rate), some expenses turn out to be unexpected, especially for first-time appreneurs. For example, your mobile app development budget should include the following items:

  • Paid third-party integrations(e.g. analytics, monetization, APIs)
  • Project management(includes PM work plus the paid subscription cost for communication/collaboration tools used in the process)
  • Launch(e.g. the cost of an Apple developer account)

It doesn’t matter if you plan to scale your app in the future or not, including the maintenance and supportcosts in your mobile app development budget is a must. In case your system goes down or experiences unexpected issues, you will need someone to fix them before they ruin your business.

One more item that is rarely included into the typical budget for app development is marketing. In most cases app promotion proves to be just as important as development. Otherwise, there is a chance your app will just wither away on the App Store instead of bringing you the ROI that you had expected.

And, while there are plenty of ways to promote your app for free, you still need to hire someone for this job. Plus, combining both free and paid marketing tools can drive better results and help you start generating revenue with your app sooner.

It also won’t hurt to include contingency costsin your budget, just in case.

Looking for an estimate for mobile app development?

Shopping around for software development services is a challenging and tiresome process.  There is also a certain risk involved: some companies may also try to lure you into using their services by giving deliberately false estimates.

Yet, you shouldn’t be discouraged by the vague estimates you will be getting. Even before you get your first £1,000 of venture capital, you can invest the minimum required amount of money into analysis and requirements specification, also known as product definition.

This process, which takes on average just several weeks, will help you get a more accurate estimate and, as a result, better plan your long-term budget and make the best use of your resources. Plus, having a clear roadmap for development and detailed specifications (or even a visual prototype) at hand can be a good selling point when you pitch your product to the investors.

So, if you want to lay a solid foundation for the future success, find a trusted development team that can help you with the product definition process. Hiring professionals is always a sound investment that will save your time and resources in the long run.