How to Calculate the Cost of an App & What are Key Factors?

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calculate cost of an app

Ask any app development team or individual and you will get an answer, “well that depends.” So I’ll tell you right of the bat that there is no magic number when it comes to app development rather there are a lot of factors at play if you are determined to calculate the cost of an app.

Industry leaders and start-ups have spent anywhere from five thousand to five hundred thousand to build an app that they want. But fret not my friends, not all apps are created equal, so it all boils down to how much complexity are we talking about here.

So How to Calculate the Cost of an App?

Most app development companies use this very simple method to estimate the cost of an app development project. So while calculating the cost, app dev companies think in terms of the number of hours that they would have to spend on a typical aspect or feature of the app and then multiply it by the hourly cost. So it becomes something like this:

Cost = Hourly Effort x Hourly Cost

What do You Want to Build?

Now, to begin with, it is essential that have a clear idea about the functionally of the app. Having a clear need assessment of the internal and the external environment would get you to know exactly how much complexity does one need in the app.

Let’s say you have an app that will consist of five features and every feature requires an estimated time to be built. That makes it:

FeatureHours Required
150
270
360
4120
550
Total:350

Now that we have determined the total number of hours that some certain app would require for completion we can multiply it by the hourly rates that any app development agency would charge. Give or take you will get an estimate about the cost. Let say one agency would cost you around $50 per hour and the other agency is charging $70 per hour. That makes our app’s total cost ranging from $17,000 to $24,000.

Understanding the Variation in Hours and Rates:

Now comes a really interesting question as to why the agencies are charging a different amount of rates or require different amounts of development hours for the same kind of work. When determining the hours and rates there are a lot of key factors that come into play.

#1. Location

The biggest factor that affects the cost of an app is the location of the agency that looking to handover the project to. Like a company operating in the US or Europe might charge something different when compared to an agency that is situated in Ukraine or Pakistan.

On average in the US an agency might charge you around $150 per hour but in Pakistan, the hourly rates can begin anywhere from $20 to 80$ depending on the quality required. So, a basic app in Pakistan might start at $10k and a similar app in the US might cost you around $50k or $70k.

#2. Development Platform

The second factor that will impact the cost of an app is the platform on which it is supposed to be developed for. If you are going for just Android or just iOS the cost would be different but if you are going for both platforms for development the cost would differentiate accordingly. The cost also differences when going for a native app versus a hybrid build.

#3. The Complexity of Features

If we want to look at this we can refer to the chart presented above, every feature requires a different level of time and that depends on the complexity of every feature.

So features like social media integration, if you want people to sign up using a social media platform or just sign-up through Email or phone number or all of these factors. Furthermore, if you want to add any location-based services or payment gateways. Would the app include streaming, multiple languages, ads, chatbots, and messaging and offline mode? All of these factors come into play when determining hours and rates.

#4. Interface Design

The fourth factor that has the most impact on cost is the design aspect of your application. Do you want a bare-bones design or do you want your app to look beautifully amazing by the incorporation of premium design?

For sure the user interface and user experience driven apps truly stand out but obviously they come with a price tag. The visual complexity leads to more effort both back-end and front-end and hence leads to your app is more expensive and the longer it takes to build.

#5. Employed Talent Experience

The app dev agencies usually have different hourly rates based on different skill sets. Each member like a developer, tester, designer or a solution architect has different hourly rates. In a decent-sized development setup, you will have around four, five or up to eight people working on a single project.

Now, this combined with previous experience of the team and the reputation in the market makes the rates and the overall time required to complete a project successfully.

#6. Maintenance and Infrastructure Required

One should also consider other factors like maintenance cost and infrastructure cost. It is important to make sure that you have a maintenance contract post-release. So that, your app is becoming future proof against any new updates by the operating system. That might render your app useless if not optimized properly.

In terms of the infrastructure your consideration towards the server selections and database selection or any other major integrations with ERP or CRM, all of these will add up to the cost of your app.

Author Bio

Elizabeth is the Digital Content Producer at CMOLDS the Game App Developers, helping small enterprises in leveraging the latest technologies. Elizabeth loves to write on topics that cover modern technologies including, Blockchain, AR/VR, AI, Digital Marketing, and more. She also runs social media successfully.

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