Develop a Web App

How Much Does it Cost to Develop a Web App?

Written by Halyna on July 26th, 2016

Estimating the costs of web app development may seem like looking into a crystal ball - lots of fluff and no exact value. In this guide, we are breaking down the core pricing factors, which influence the final price tag.

So, how to develop a web app?

If you are a no-coder yourself, the logical assumption is that you need to hire a web development company. But how much will that cost you?

I wish I could look into my cloudy crystal ball, make some weird gestures and somberly announce that “Your web application development will cost $XXXXX and no single cent more”.

But that’s not the case.

Though I’m not a clairvoyant, I can still tell you a thing or two of what kind of witchery goes into web app development cost and how to accurately predict the possible price tag of the entire projects.

How Much Does it Cost to Create a Web App: Three Key Approaches

Three Key Approaches

In general, there are three different methodologies used to predict the probable costs of web applications development:

  • Based on project specifications
  • Based on user stories
  • Based on equitable value

The first approach involves sitting down together with a web app development company and creating a large list of core features your application should be capable of doing.

The first approach

This approach is usually used for more complex systems, where actions go beyond the traditional user input/output. Standardly, this approach is more preferable for enterprise web application development projects and assumes using the waterfall approach to development as it allows making rather accurate estimates of the required time and budgets. However, while the costs are accurate, your project gets coffined within the provided specs and becomes less adapted to possible changes.

To get really precise estimates you can use the three-point estimation technique, which implies creating three figures to represent the probable distribution required, based on your best guesses and prior experience:

  • a= the best-case estimate
  • m= the most likely estimate
  • b= the worst-case estimate

Creating a set of user stories is the second approach to identifying how much does it cost to build a web application.

Creating a set of user stories

A user story is a short (one-two sentences) definition of what the end user of your app does or needs to do. Here’s an example: “As a user I want to click login into my account using email or a social media account”

You can follow the 5-W approach and base your stories around the following questions:

  • Who
  • When
  • Where
  • What
  • Why

User stories are standardly paired with the agile approach to software development as it focuses on incremental and integrative development. As user stories are more vague than functional specification, the overall project becomes more flexible.

Another slightly less conventional approach to estimating the costs of web application development is to use the value based pricing approach.

Pricing approach

You can define value from the two main perspectives:

  • Possible ROI or the value this work will bring to your company
  • Value of the resources required to creating the output

Sure thing, calculating the potential ROI before you even start with the development project is very difficult. Hence, consider focusing on the second value element – the working capital.

Your goal here is to make sure you have more assets than liabilities and you employ the right capital, which won’t hinder your growth or hurt the cash flow. Your project value should be compared to the cost of hiring full-time employees to do the same job. Instead of measuring the time it takes to develop this type of application, compare it to the efforts required to hire all those web app developers and supporting personnel internally.

Here’s a sample staff break down from a custom web application development project:

  • Senior UX developer to map user experience journey and architecture
  • Senior UI designer to craft visual design and layouts
  • Junior UI to provide assistance and redundancy
  • Senior Front-End developer for coding and developing custom UI elements
  • Senior and Middle Back-end developers to code all the functionality
  • DevOps to establish building, testing and releasing environment
  • Project Manager to keep the whole project on track
  • Technical Support rep to maintain the project onward

Estimating these hiring costs for each person is pretty simple – just tap into any public record or salary survey data online e.g. at Glassdoor or Payscale. First add up the salaries, next calculate all the hiring and overhead costs, which include headhunting, interviewing, onboarding and training. This should account for around additional 20%-30% from the first year salary. Compare that to outsourcing the entire project to a web application development company in another area or hiring a dedicated remote team.

So you should now have the numbers – $300,000 per year for keeping a team of web application developers in house or paying $100,000 to an outsourcing company. In other words, if you plan to invest $300K per year in full-time employment costs, you’ll likely add up with a negative ROI. The future value of your investment in an in-house team is equal to the accomplished project’s present value with fewer investments involved.

Compare the costs of outsourcing web application development to different regions worldwide versus keeping it on-shore. Having the respective numbers in mind, start approaching various companies. Here are prospects you are likely to encounter.

How Much an Agency Will Charge You For a Custom Web App

Custom Web App

Here’s the deal – you can predict the number in your request for proposal by identifying some common cues web application development companies tend to have in common. Bernard Kohan suggest breaking those down into the following classes:

The “Extravagant” Class Companies

These are the large established brands in the software development community with a luxury office, long track of working with big name clients and well-paid executives.

This breed of companies typically sells their services only to a certain type of clients with a minimum project price tag starting at $200.000. Their developers can earn up to six figures annually and the average cost of a development project is around $500K.

The proposals are impeccably crafted by top of the top sales executives and effortlessly justify the outrageous $400-$800 per hour rates for the super custom solutions. Standardly, such companies build high-quality products, but the overall process is far from being nimble with a lot of extra fluff happening around.

The “Moderate” Class Companies

These are the smaller companies with around 10 to 80 people in the office, reasonable spending and streamlined operations. Depending on where in the world they are based, their hourly development rates will fall into the $40-$150 range.

Most commonly such companies are well organized, agile and capable of proceeding faster with the development process without compromising the overall code quality. They make the best partners both in short and long-term runs as long as they:

  • Keep the ethical standards high, especially when it comes to senior management and owners.
  • Have proven track of experience in large scale development projects (the code quality is excellent)
  • Have additional considerable experience in design, usability, DevOps, technology migration and other skills that may interest you.

Our custom web application development company tends to follow these guidelines and the client’s feedback has proved we are on the right track so far.

The “Small Class” Development Companies

These are the so-called “boutique” agencies with only 2-3 permanent employees including the company’s owner/partners. The development hourly wages range from $35-$180 depending on their location.

If lacking proper organization and powerful management, they are not the most suitable choice for a large-scale development project. But they are perfect for SMBs and self/Kickstarter backed up projects.

Independent Contractors

People who quit their desk jobs and go solo typically base their project rate on their professional knowledge and experience, plus additional factors like cost of living, spending habits, taxes etc.

The quoted rate can range anywhere from $25 – $250 per hour.

The result of your project will highly depend on the person’s experience and years in the industry, along with the developer’s ethical standards.

In this case you should carefully question the candidate and identify whether:

  • They are doing freelance development full-time or moonlight after their day job, which can negatively impact your project.
  • How many years have they been in operations? A lot of people quit just within a year or two of running solo, so make sure to choose someone stable with at least 5 years of working independently behind their belt.

Obviously, an independent contractor won’t be able to pull a large scale project all by himself, but he can become a valuable addition to your in-house or 100% remote team.

To wrap it up, here are the rough estimates of what you can expect in each case in terms of final costs:

Extravagant ClassModerate Class
Average Project Cost$300,000 – $500,000$15,000 – $50,000
Project Cost Ranges$100,000 – $1000,000$7,000 – $150,000
Hourly Rates$400 – $800$45 – $150

Choosing Java as the core technology for your web app can slightly reduce the overall project costs as the technology is 100% open source with no additional licensing fees involved. It’s stable, robust, secure at the go-to choice at our company.

Interested in partnering with Romexsoft – a moderate class custom web app development company capable of crafting high-load, enterprise-sized projects as well? Don’t be a stranger and get in touch

Halyna

Halyna

Hi there! I am Halyna from Romexsoft, working as Engagement Manager building reliable and mutually beneficial business relationships. Serial consultant on Quality Assurance in Agile environment.

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