How Much Does It Cost to Build an App?

Startup founders come to me all the time and say something like, “We have this. How much will it cost and how long will it take to build the solution?”

They might also say, “I’ve received a range of quotes going from $50,000 to $500,000. I don’t understand why this is the case.” But they still insist they need an estimate from me.

The honest answer to this? I have no clue. And neither does anyone else. That’s why you received estimates ranging from $50,000 to $500,000.

There’s no way to give exact time and cost up front. You aren’t buying a product with a set value. Instead you’re buying something that’s entirely custom-tailored to the unique situation, the problem you are trying to solve, and the customers you want to help.

It’s also pretty undefined at this beginning stage. Typically, it’s a rough idea of what you think should be built. And even if you’ve written your own specs and wireframes, this doesn’t mean that we can just give an estimate and start building. If it was that simple, you wouldn’t be getting estimates from $50,000 to $500,000. Furthermore, along the way, things will change. Things always come up that don’t or can’t account for at the start.

The concept of being unable to estimate cost and time is a problem every single person has in many aspects of their life.

Here’s an example. Imagine I asked you the following question:

“I need you to buy enough food to make dinner every night for a week. How much will it cost? And how long will it take you to go to the store and back?” I can almost guarantee your estimate will be wrong. Don’t believe me? Try it.

Even if you guessed $100 and you ended up spending $120, that’s a 20 percent overage. And if you guessed 4 hours and it took you 5, that’s a 25 percent overage. And this is a small task.

If you can’t correctly estimate something that takes less than a day, how can you estimate something that can take months?  

Here’s a better question. What if I asked:

“Can you buy groceries for the week, enough for dinner every night? You have $100 to spend and 4 hours to get there and back.”

You’ll tell me one of two things. Either 1) “No way! That’s just crazy,” or 2) “Ok, I can make that work.”

In case 1, you’d use your past experience to answer because the time and cost constraints are unreasonable. For example, if someone said you have $20 and 20 minutes, you’d probably fall under case 1.

However, if you have 4 hours and $100 dollars, your past experience tells you this is possible, so you fall in case 2. You now have constraints. These will guide every decision you make along the way.

Cost Efficient or Time Efficient? Should I walk to the store or take the subway? The subway costs money, but it’s much faster. Then I’ll have less to spend at the store. I’ll have to make a decision here.

Quality of the Goods? Should I get the $5 meat or the $10 meat? Well, if my budget is running thin, I’ll probably go with the $5 meat.

Do You Buy Extras? My cart is full but I’m looking at everything and I know it will be over $100. Now I need to decide what I can live without, but still have enough to cook a meal every night. Ok, I’ll put back that ice cream, I don’t really need that.

Each decision you make influences your budget.

At the end of these many decisions and choices, you get home in under 4 hours and spend $100 or less. Or if you do go over budget, you’ll be $5 over and 15 minutes late. These are 5 percent and 6 percent overages – much less than before.

You were able to achieve this because you had constraints. You also had a clear goal and problem to solve (i.e. getting enough food for a meal every night).

Without these constraints, you still might have achieved the goal, but I can say for certain your estimated cost and time frame would be wrong and probably significantly off. . .

Back to us. I hope it’s clear what I’m trying to illustrate.

For clarity’s sake let me reiterate.

No one has an unlimited budget. I get that. But if someone is asked to estimate time and cost to build a solution to a problem without time and cost constraints, you’re essentially entering a guessing game. You could achieve the goal in 2 months with $100,000, but you could also achieve the goal in 4 months with $200,000.

Everyone has a budget – or a budget range – that they have to spend. You typically also have an ideal time frame. But often times the budget is the bigger constraint, whether it’s for buying groceries or building an app.

When I ask for the budget, often times startup founders will ask what I think it should be. This isn’t the right question. It’s possible they ask because they think if we know the budget then something that could cost $50,000 we’d say would cost $100,000. But the reality is, we clearly can’t estimate accurately at this point. So trust me, that’s not the reason I ask for your budget. I ask because I need to know if it’s even possible for us to work within your budget.

Closing Thoughts

If you’re looking to build a solution to a problem from scratch and want to work with a company to help, please be transparent. Let them know your budget and desired timeframe. There’s a number of different ways to solve a problem; the budget and time constraints will guide the decisions along the way. Overall it will make for a better end result for everyone involved.

 

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