← back to the blog

How much does it cost to create a web application or startup?

Posted on March 16th, 2016 in Market Research by Compactory Team

What influences application cost?

Obviously application cost largely depends on the project complexity and variety of platforms required for specific software. But we also can divide cost estimates into several sub-items

Application Development Team

Depending on project requirements, a software development team can be basic or extended. A basic team includes a project manager, UI/UX designer, at least two developers, and a quality assurance engineer. Extended team usually requires several more developers, more QA testers and continuous involving of system architect. If product requires extended software, like mobile applications or admin panel - several more people may be included in development process. This is what mostly influences average hourly project rate.

Costly application element

Some specific business requirements need deep investiagion and use of third-party API or libraries for optimal processing or even a separate solution. For example video processing host, cdn servers, background workers, etc. Each of these chare additional expences based on third-party company's fees.

Custom design

Mid-sized and enterprise projects often require an extensive UX and UI experience, and it takes more time for designer to create an form proper interfaces and custom components. Custom user interfaces are rather complex to implement, so application development cost would be higher than the price of building from standard components.

Post release expences

An average application development budget isn't solely comprised of the funds that you spend on the actual development activities. You should also take into account all the money that goues into growing a product. Just like any business, an app needs updates, customer support, backend servers maintenance, cloud hosting, and even legal support, not to mention app marketing and promotion that make a huge impact on the product's success.

Unlike an app or startup development team and constly app elements, post-release support ins't included in initial application development cost estimates, but rather is provided as an additional services by most app development companies.

How do we estimate application cost?

We divide project estimation into several phases and the first is - quick estimate. That's how we identify an approximate number of hours needed to build a product based on your requirements, description, documentation or any other detailed information. After you approve first estimate, we proceed with a detailed estimate of the project where we identify the requirements clearly, create work milestones, draw wireframes to show you how we see current project done and also prepare high-level technical documentation. Our team provides full-cycle development services, what means that we cover every service related to product development from idea to post-release support. Let's break our services in four main tasks:

  • Requirement analysis
  • Design
  • Development
  • Testing and Verification

We call it an iteration. And it relates equally both to whole application development as well as single feature implementation. Iteration by iteration the cycle repeats until a product becomes truly successfull. To launch the project is not to complete the mission. It is only the beginning. Be ready for a long-term collaboration with your development team.

Worldwide market prices on development services.

When you are looking for software developers to hire, try to pick those who have expertise in the industry that your business targets, because they probably have both experience and assets to finish your project in the shortest time. There is no guarantee that going with an expensice company, will produce a result that is capable of giving you desired expectations. In fact, lower-priced software developers can provide excellent results. There are lots of factors that influence pricing. Software development market nowadays is a global ecosystem that mostly dependent on geographical factor. Let's take a look how pricing is formed in different world areas.

  • Northern American companies charge from $50 to $250 per hour
  • Australian development agencies offer their services for $50 to $150
  • Western European and UK-based web developers are charging rates between $35 and $170
  • Eastern Europeans (that's where we are) actually are pretty glad with $20 - $150
  • Indian are the lowest and most attractive rates. They offer $10 to $80 per hour.

So how much does an general development project cost? Do not expect a professional web development company to tell you the price of your product from the very beginning. Development is a rapidly changing process and there is no essential rules how to calculate application development cost. Software development agencies charge rates per hour, but rates are discussed individually on each project. The cost of creating a startup, web application or even mobile app largely depends on number of hours that a project may last, and the more complex product is, the longer it takes to finish it. Therefore, let's divide applications into three categories - simple, mid-sized and enterprise, and try to give an approximate answer to our question. Let's calculate at close to average cost of Ukrainian agenices ( 50$ per hour)

  • Simple web projects usually include some basic functionality, do not require integration with any third-party APIs, and don't need a large amount of software development. For example, the features of such application may include standard UI components and general CRUD operations on few object models. Development of simple website or app takes up to 500 hours and starts at $15 000 - 18 000. This can be a simple online-delivery booking application, like on we developed for London-based company.
  • Mid-sized projects may include custom design features, real time components, payment, several platforms, API integrations and more. These projects may totally vary in functionality and development time starts from 1000 working hours. Generally current projects take around $35 000 - 50 000. This can be a live stream promotion ad network, for example.
  • Enterprise applications include complete set of applications, including web apps, scalable infrastructure, mobile applications and other supporting software.Current apps often require extended teams and complex solutions, including audio/video processing, image optimization, large loads, mathematic calculations, security implementation and many more. The timefrime for developing complex applications may wary starting from 1 year, and the price starts at $80 000 - 100 000. For example a fully functioning social network.

Now looks like that we summarized the range of application development costs. Having any other questions?

Please feel free to contact us here or via email : info@compactory.com


Share this :

About the Author

A squad of crazy coders and professionals. People who love what they do and willing to share their experience with you.