The cost of building an app, or how to talk about price

How should one go about this to spend exactly the right amount, whilst maintaining the highest possible quality and business value? What data should be used as a basis for estimating the application’s budget?

There are several ways to discuss your project with potential contractors. Here are some common ways to ask for a quote.

Method 1: Enquiry about the cost range

The text of such a query might look like this:

“Ladies and gentlemen,

I am interested in having an app developed with [brief description of the app’s purpose and features]. I would like to enquire about the approximate cost of developing such an app.

Would it be possible to provide a preliminary quote or an estimated cost breakdown, taking into account the design, programming, testing and implementation of the application? It is very important for me to obtain information regarding the costs so that I can assess my financial options and decide on the next steps.

Please send me the details by email or give me a call so that we can discuss the details and, if necessary, arrange a meeting to discuss the project in more detail.

Thank you in advance for your time and your reply.

Yours faithfully, [Your name]”

Is that a good way to do it?

A brief description of the proposed application will result in a software house that respects both itself and its client quoting rather vague figures. “The application will cost between 60,000 and 150,000 zł, depending on the number of screens and the functionality.”

Method 2: Sending a specification with a request for a quotation

If you have a project specification that sets out all the planned functionalities, the relationships between them and all the application screens (even if only in descriptive form), then you’re already one step ahead. Such a quotation may well be worthwhile, so let’s take a closer look at this scenario.

A detailed specification will already give the IT Project Manager a clear picture; they may even be able to offer you some advice and… you’ll probably receive a reply along these lines: “A web application will cost a maximum of 90,000 zł, whilst the cost of a mobile app will depend on several factors…[list of questions]” and, at the end of the email, a very client-focused message: “I’d be happy to arrange a consultation with you to discuss the details of the application so that we can prepare an analysis for you”

Is that enough for you?

Method 3: Hire a business analyst and ask them to draw up a quotation

A business analyst who develops the application concept and then the user stories is a very valuable member of the project team. However, they are quite expensive, particularly at the outline stage. If you try to hire a business analyst without doing your homework properly, you’ll get this response:

Thank you for your enquiry; we do, of course, have an excellent business analyst on our team. Please let us know what you’d like to create, and our analyst will take care of it. The analyst’s hourly rate is xxx PLN, and the time required to prepare the analysis, including user stories, is xxx hours.”

If you agree, you’ll receive a detailed business analysis, setting out the functionalities and dependencies, along with an implementation strategy… but you still won’t know how much the application will cost or how it’s going to be funded.

Method 4: Defining the objective and business model

The best way we know to start pricing a mobile app is by looking at the business model.
Defining the app’s business objective is a key step in the app development process, aimed at identifying the primary purpose the app is intended to fulfil within the context of the business. The app’s business objective should be clear, specific and aligned with the organisation’s goals.

What does this process look like, step by step?

1. Understanding business needs: Carry out a business needs analysis and identify areas where the application can add value and solve specific problems. Stakeholder interviews, business process analysis and market research can provide valuable insights in this regard.
2. Identifying the expected benefits: Consider what benefits you would like to achieve through the app. Is it about improving operational efficiency, increasing revenue, boosting customer loyalty, streamlining processes, expanding your target market or strengthening your competitive position? Specify these expected benefits.
3. Identifying key features and capabilities: Determine which features and capabilities of the application will be essential to achieving the business objective. Identify the most important features that should be included in the application and which will contribute significantly to achieving the intended benefits.
4. Setting success metrics: Define specific success metrics that will enable you to measure the achievement of your business objective. These could be figures such as a specific percentage increase in sales, a reduction in order processing time, an increase in market share, etc. Choose metrics that are relevant to your business and the purpose of the application.
5. Support for business strategy: Ensure that the application’s business objective is aligned with the organisation’s overall business strategy. It should be integrated with other business activities to contribute to the achievement of long-term plans.
6. Communication and understanding: It is important that the business objective of the application is clearly communicated and understood by all stakeholders, including project team members, clients, end users and other interested parties. This will enable everyone to focus on achieving a shared goal and avoid discrepancies in expectations.

Once you have defined all your business objectives, contact an agency and explain what is important to you. Ask them to select a solution that meets all your business objectives and costs only as much as is necessary. In the case of a PoC (‘What is a PoC and why is it worth considering?’) or an MVP (Minimum Viable Product), the application can be built using ‘low-code’ technology, which is up to 80 per cent cheaper than traditional (‘high-code’) applications.

You should also check whether the software house has at least a basic understanding of marketing and sales. If not, the costs of developing the app will be higher, and in the worst-case scenario, the project may struggle to turn a profit.

Find out how to avoid common problems with IT contractors