How Much Does it Cost a Small Business to Build an App?

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197 BILLION—that’s the number of mobile app downloads the world saw in 2017. At this current trajectory, we’ll see nearly three times as many downloads by 2021. That number is not so surprising when you consider to what degree smartphones, tablets, and the apps that populate them have become a part of our daily lives—we spend roughly 4 hours a day on our mobile devices, and nearly 90% of that time is on mobile apps. No matter how you slice the data, the metrics are clear—the mobile revolution is already underway, and if you want to take your digital marketing campaign to the next level, an app is your pass to the fast lane.

So how much does it generally cost for a business to build an app?

While it would be nice if there was a simple number, the truth is it depends on number of factors: the platforms you choose to support (iOS vs. Android), the team you’ll need to build, the technologies your team will wield, and the business model you’re ultimately trying to serve. In this article, we’ll take a look at some of the common cost factors that go into building an app.

Cost Factor #1: Business Model

Before you can even begin to estimate the cost of building an app, you must first define where the app will fit into your overall business plan. How will this mobile app bring value to your existing business model? Will it be directly involved in generating new revenue through sales? Or is the app about providing utility to your customers to help you distinguish yourself from your competitors? What if the app itself is the primary product, and selling it is your business model? The unique needs of your business model will drive the type of app you want to build, the scope of your development project, and the technologies you’ll need to bring that project to life—all factors that directly weigh into the total cost off your project.

Cost Factor #2: App Type

The technology tree you choose to base your mobile app development project will ultimately determine who you hire to build the app. Naturally this choice will have a major impact on the overall cost of your app.

  • Web App. Not technically a mobile app, but rather a mobile-friendly website that uses responsive design to ensure a smooth user experience across a variety of screen sizes from tablets to smartphones. This is by far the cheapest option for most small businesses.
  • Native App. An app is considered native if it is built with a language native to the operating system of a given platform or device. That means using Swift or Objective C for iOS, and Java or Kotlin for Android. The primary advantage of native apps is better performance. The major con is that if you want your app to work across multiple platforms, you’ll need to develop the app exclusively for each operating system. This duplication of effort naturally leads to higher development costs.
  • Hybrid App. The healthy compromise between performance and programmer productivity (i.e. lower development costs), is the hybrid app, which speeds up development times by allowing you to build your mobile app with the big three basic web technologies HTML, CSS, and JavaScript using frameworks like Ionic and Cordova. They are essentially websites embedded in a mobile app shell via a webview (a browser bundled inside a mobile app). The framework provides rudimentary access to the operating system and device features.
  • Cross-Platform App. Cross-platform app development frameworks like Xamarin and Phonegap, allow you to build your app in one language, creating a single source of code, that can be compiled into native code across multiple platforms as needed. While a cross-platform app will not perform as well as it could if it were developed natively, the advantage of a unified codebase across multiple platforms is worth it for many projects.
  • Next-Gen Components Oriented JavaScript Frameworks. It’s also worth mentioning that there is a new class of apps using components oriented JavaScript frameworks (like React Native) with near-native performance, that have the same cross platform benefits as traditional cross platform and hybrid apps. While these apps are built in JavaScript, they render native views (no webview required). Near-native performance is possible thanks to the components oriented nature of these new frameworks and performance optimizations like the virtual DOM.

Cost Factor #3: Platform

It’s no secret that if you’re building a mobile app in today’s world, the two biggest ecosystems are Apple’s iOS and Google’s Android. Both platforms provide access to a large market of potential customers. If you’ve got the money and resources, it’s definitely in your interests to launch your product across both platforms. That said, there is nothing wrong with starting with the platform that best suits your needs, and expanding your customer base after you’ve made a nice return on your initial investment. To help you make that choice, here’s a brief breakdown of the pros and cons of each platform.

Pros of Android App Development

Cons of Android App Development

  • Android users spend less and have lower media engagement diversity on average.
  • Android developers must deal with more backwards compatibility issues, multiple versions, and a larger variety of phone architectures and screen sizes, which can translate to higher development costs.

Pros of iOS App Development

  • iOS users spend more and have higher media engagement diversity on average, including greater participation in M-Commerce (mobile shopping).
  • Stricter guidelines and higher quality control tends to translate to a higher quality app with better security.
  • Apple’s steady release cycles and tightly controlled device ecosystem ensure most users are running the latest versions of iOS, allowing developers to focus on building for the latest APIs. There are also fewer different phone models and screen sizes for developers to contend with.

Cons of iOS App Development

  • The usual cons of a closed-source development environment—less freedom to innovate, less access to the operating system, and more stringent rules and regulations to contend with.
  • Apple’s frequent updates are a double-edged sword, that can add to ongoing maintenance costs.

It is important to note that a capable mobile app developer or team can overcome most of the technical cons of picking one platform over the other. Far more important is the platform that most of your customers prefer to use. The Android vs iOS debate is very much a cultural one, especially in the USA. Market research should be performed to determine which platform best fits your customer demographic.

Cost Factor #4: Functionality

Estimating the cost of an app is a lot like costing a car. There’s a base price for the type of app you are trying to build that rises in cost as you add on new features. In the context of mobile app development, forming a top-level of understanding of the pieces of a basic app, the features you can add on, and the underlying technologies behind them is necessary for building your budget. Here’s a brief rundown of the kinds of features that make up a typical mobile app:

  • Login/User Accounts: From the simple username/password combination, to convenient social media logins, to secure 2-factor authentication systems, most apps have some sort of login.
  • Chat/Messaging: Vital for social media apps, the ability for users to communicate and interact with one another is a project in its own right.
  • Monetization Schemes: In-app purchases, shopping carts, and payment integration are all separate features with their own development costs.
  • Search: Whether it’s product catalogs, photo galleries, videos, or other content, many users expect some sort of search functionality.
  • Geolocation: A no-brainer for travel, restaurant, and dating apps—geographic location can be just as vital to your users as it is for your own user analytics.
  • Push notifications: If you want to keep your users updated and in-the-loop about what’s happening on your app, notifications can encourage engagement and user-retention when properly employed.
  • Synchronization: The ability to synchronize your app across all of a user’s devices can be very valuable, especially for those who provide content like todo lists, eBooks, and other files.

This is just a sampling of some of the common features that make-up everyday mobile apps. Other decisions like whether or not your app will be free or paid, if your app needs to be connected to the internet to work, and how much back-end support is needed to power your app’s data needs, all factor heavily into the cost and complexity of your app. To get a better feel for the kinds of decisions you need to make for a budget, feel free to play around with some of theses app development cost calculators:

Cost Factor #5: Design & Development

When you really boil it down, the total cost of building an app is a product of your mobile development and design team’s hourly rates and development time. Depending on how your organization is structured, there will also be costs associated with things like administration, planning, infrastructure, marketing, and deployment. But for this section I wanted to focus on the ones actually building your application.

The Mobile Designer

Design matters, and people tend to buy with their eyes rather than their minds. Between the app with more functionality and the app with better visuals, the visuals will likely win…in the short term. In the long term, truly good design concerns itself with both form and function. User experience (UX) and user interface (UI) design start with storyboards and interactive prototypes and ends with functional performant code. That’s why the role of mobile designer can be a separate and distinct role on any mobile app development team.

The Mobile Developer

The mobile developer will be responsible for writing the code that makes up all those features that are required to bring your mobile app project to life. They’ll also be there long after your initial release to handle updates, debug errors, and test new features throughout the life of your project. So how much does it cost to hire a mobile developer? That all depends on the specific technologies required to build the features you desire. For iOS, you’re looking for familiarity with Objective C and/or Swift, and the Xcode IDE. For Android, that means a solid Java background and intimate knowledge of the Android Studio IDE. For hybrid apps or components oriented frameworks, you’re looking for a solid grasp of web fundamentals (HTML5, CSS, and JavaScript), and frameworks like Ionic or React Native.

Cost Factor #6: Hiring Style

From designers to developers, how you hire can have a direct impact on total cost. The general consensus is that hiring freelancers will cost the least, since your total is based solely on hours worked. Hiring medium-sized agencies is the next step. Hiring large-scale professional mobile app development agencies is the most expensive.

Putting it all together, a look at mobile app development costs by the numbers

Much has been written about the cost of mobile app development. The cheapest, quickest option on the market today, is probably an app builder site like Buildfire or Apps Builder. If all you need is a simple layout with minimum functionality, app makers can be very economical with tiered subscription plans ranging from $10-150 per month. However, if you want full customizability, and are serious about incorporating a mobile app into your business, you’re going to want a developer. The table below provides a small sampling of the estimates of app development companies and the results of reputable surveys.

Mobile App Development Companies
Savvy Apps $150,000 to $450,000
Applico $100,000 to $300,000
Fueled $150,000 to $500,000
Mobile App Development Surveys
Kinvey CIO survey (2014) Average $270,000
Clutch survey (2015) $25,275.00 to $727,500.00
Enterprise Mobility Exchange $250,000 to $500,000 (enterprise level)

From our own data based on freelancer rates, assuming a 6-month development time with 40 hour work weeks for a solid, full-featured v.1.0 app:

Type of Mobile Developer Average Hourly Rate 6 Months, 40 hours/week
Native Apps

iOS or Android App Developer

$35-150+ $33,600 – 144,000
Cross Platform Apps Xamarin/PhoneGap Developer $16-55+ $15,360 – 52,800
React Native Developer $20-150+ $19,200 – 144,000

These numbers are only estimates based on the traditional assumption of a 40-hour work week for freelancers from the United States. In reality, hourly contracts can be as little as 10 hours per week, and savings can be gained from leveraging location differences. The flexibility of hiring freelancers gives you the freedom to build your own team and adjust the overall cost for your project, making it a good fit for small businesses on a budget. You also get access to a global talent pool. The key is to make sure your organization is prepared to properly handle the unique challenges that come with managing this enhanced flexibility. Checkout Upwork’s Hiring Headquarters for more articles to help you take advantage of the rising independent workforce.

This article originally appeared in Upwork.

This article was written by Yoshitaka Shiotsu from Business2Community and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.