How Much Does It Cost to Make an App?

Many people ask, How much does it cost to make an app? CEOs are usually surprised at how their five-figure projects end up costing a lot more – sometimes seven figures! The hardware and software to make them are fairly cheap, so where does the cost come from? The time that the design and engineering teams spend on the project is what’s expensive.

If you open your App Store or Google Play, you will see millions of apps. Most of these apps will never earn money through direct sales. They’re free or priced very low. They rely on helping the company make more sales or in-app purchases.

Since the costs and possible profits can vary, there are many things you have to consider to properly calculate how much you should spend to make a fully functioning app. You also have to consider who is making the app. Is it an individual, a small studio, or a contracting agency?

Developer Teams

Individual developers usually don’t run multi-billion-dollar businesses. That’s what teams of designers and developers do. Teams like this can range from three people up to a whole organization that employs hundreds. For example, Twitter, Facebook, Google, and other giant companies employ teams of more than 100 people who often work on just a single app. Of course, this is not typical, but everyone has to understand that there is a lot of work that goes into making a world-class app.

Maybe your project doesn’t need that many engineers. Most apps don’t. But you will most likely need at least a couple of experienced designers and engineers who can deliver high-quality results. Commonly, 3-10 people are enough to work on a single app.

How Much Does it Cost to Make an App? Factor #1: Talent Costs

Most often, your labor costs will draw the most money out of your pocket. If you look up the salaries of the best designers and developers in your area, you will most likely discover that their annual salaries vary from $60-150K.

Now, multiply the average salary by the team size you want and you’ll get how much your development and product design will cost. Also, consider that most v1.0 apps will usually take 4-6 months to make.

The expenses you calculate are usually a good reflection of what you will end up paying for your product. Even if your v1.0 app is done in three instead of six months, most of the teams will continue to improve it. This will potentially increase both your costs and revenue.

Big businesses are constantly developing and trying out new product features on their apps. The more useful they can make their apps, the more money they will hopefully earn as a result.

Factor #2: Design and Functionality Costs

Even if you are planning not to make a complex app, you will most likely end up paying around $25,000. A basic app starts at $15,000 and can go up to $30,000 or even $50,000. For more complex apps, you will have to pay more than $50,000.

As with any product an app needs resources. Unlike with material products, those resources are time and experience-based. You have to consider the functionally and the features your app is going to have.

  • Features connected with the user and social involvement can add 30+ hours
  • In-app purchases and payments will add 40+ hours of work
  • Synchronization across devices will add 60+ hours
  • If you want a customized visual design, that can add more than 170 hours of work

diagram of number of hours it takes to build a mobile app

The prices will vary depending on what you plan to build

Who to Hire?

Depending on who you want to hire, the amount you will spend varies. The biggest companies that make apps usually won’t even speak with you if you don’t have a budget of at least $500,000.

Some agencies are not that expensive though. They will price their services at around $150,000 to $450,000. Usually, customers end up paying more because they want these agencies to develop new features and improve the design after v1.0 app is made.

Here is a typical pricing list.

  • Hiring a large app company will cost you somewhere between $500,000 and $1,000,000
  • Hiring an agency will cost you somewhere between $150,000 and $450,000
  • Hiring an individual, or a small group of 2-3 people will cost you somewhere between $50,000 and $100,000

Buy or Build?

If you’ve now calculated the expected expenses, you might be thinking if you should build the app yourself or look for a services team. The answer to this question comes down to core competencies and timing.

If you already have a company and you consider yourself technically savvy, you could try to do everything yourself. The challenge with this strategy is staffing and hiring the right amount of designers and engineers. If you are not very confident in your technical skills, creating an app will be a challenge for you. Another challenge to developing an app in-house is keeping talent once you find it.

Bringing the App to Market

As already mentioned above, you will probably spend more money beyond your v1.0 budget. The expenses are more than the initial design, development, and UX/UI. You will also have to budget for updating your product and probably for paying the server.

The Bottom Line

To sum up, the saying, “you get what you pay for” applies to app development. Setting a realistic price range for your app is very important. Remember, an app is an investment from which your company can benefit in many ways. Thinking of building your own app? Schedule a free consult call with us and let’s find out if we’re a good fit!