How to estimate the cost of building an app
We hear it all the time, “Estimating the cost of building a product is hard!” But it doesn’t have to be. Whether you’re buying a $15k Sedan or a $250k Ferrari, the cost depends on the features, functionality, experience and quality.
A common fallacy we hear when talking with prospective clients about the cost to create an amazing and successful product is that they would assume that it’s priced like a commodity with a fixed price. A digital product or app is not something that comes off an assembly line made in high quantity. Even if it was, you wouldn’t want to own a product that looks and feels just like all the other products of the same kind. Each product is unique and in order to stand out in the market, especially one with competitors that already exist, is to create a beautiful, high quality product with must-have features executed exquisitely.
Even though you don’t want to skimp on quality, you don’t have to spend $500k for a successful MVP of your product either. You also can’t just assume throwing money at it will produce success. Just like buying a race car doesn’t mean you’ll be a winning race car driver, you have to spend the right amount of money to get the right results for your needs. So, don’t overpay or skimp on the budget by under valuing the impact that amazing strategy, UX and design can have on your product.
Estimating the right cost for your app or product is easy. Let’s look at how to get an accurate estimate, cut out the fluff and focus-in on creating a great version of your product.
1: Identify your product’s features and functionality
You have identified the problem in the market and how your product is the answer to that problem. Digging a little deeper to identify exactly how your product will address the needs of the market will help you understand not only what you’re building, but provide incredibly useful information that will help you understand the cost to build your product.
The first step towards creating an accurate estimate is to define the core features and functionality of your product. List out all the features and functionality you want to have in your app that addresses your customer’s needs. Include a short description of each feature to capture your thoughts about the exact purpose of each feature or functionality and how you envision it.
For example, you might determine that your product needs an account for your customers and therefore, the ability to sign-up. This is a great feature, but you need to be more specific about how it should work. Is sign-up going to be done via email only, or should your customers be able to sign-up via Google authentication? This subtle difference not only affects the overall product strategy and experience, but the overall cost of developing the product too.
Not sure how to identify your product’s core and must-have features and functionality? Reach out to an experienced product design agency to get help.
2: Use a cost estimator to get a ballpark estimate
Once you have your core list of features and functionality, you’re ready to get a rough estimate. One of the fastest ways to get a ballpark estimate is to use one of the online cost estimation calculators and plug in the feature set your product will have. Based on the features and functionalities that you enter, you will see a price range for creating your product.
Why a price range? Just like the subtle difference we looked at with the sign-up feature, there are other subtle differences in the requirements of how the app is built, such as platform, the development approach and additional strategy components that can’t just simply be selected from a list.
3: Prioritize your list of features & functionality
Maybe the ballpark estimate range you received was higher than you expected or you want a tighter cost estimate for your product. Now’s the time to start to refine and prioritize the features and functionality you deem as must-have items for your MVP (minimum viable product) to get a tighter estimate. Prioritize your list of features and functionality and group them into two main categories:
Must-have: These are the features that are essential to the core needs of your business and/or customer group. These are the primary features and functionality of making your product a success.
Nice-to-have: These are the features and functionality that are not essential to having a successful product, but will contribute to the overall experience or business in a less prominent way. Although these are less important, these are still on your product roadmap to create an amazing product.
Estimate the cost of your product with PLATFORM's cost estimation calculator
Once you have these lists, organize each list’s feature and functionality into phases 1-4 to align with the priority of feature rollout. Phase 1 might be your MVP launch, while phase 4 is a few product cycles in. Target your must-have features first, then sprinkle in a few nice-to-haves along the way as your stretch goals. These phases begin to form your product roadmap.
4: Consult an agency
With your ballpark estimate and newly minted product roadmap, you’re ready to get a tighter project estimate that you can execute on. The best way to get this tighter estimate is by reaching out to an experienced product agency to discuss your product. The best part about this is that these agencies offer free consultations to discuss your project. The more accurate and refined your vision for the product is, the more accurate the estimate will be.
Ready to get an accurate cost estimating for building your product? Reach out to product design experts to help you identify your needs and provide you with an accurate estimate.
Even if after reading all this, you are still unsure about whether your product makes sense, or maybe you don’t yet have a business plan in place or need help with strategy, reaching out to an experienced product design agency will help. They can help you do it all, from defining your business plan, revenue models and crafting a business strategy to defining the features and functionality of your product and from building it all to launching a campaign to help drive awareness and pursue growth hacking. No matter where you are in the process of bringing your idea to life, there’s an avenue for help awaiting you.