How much does it cost to make an app? [2020]
Tags: startup, beginners
Published: 2020-02-13 19:28:18

It has been over 10 years since the launch of the Apple App Store and Google Play Store. Combined, there are almost 5 million apps available to download. Apps are now an integral part of our daily lives. Nearly 70% of our internet browsing is on mobile devices.Large companies and creative entrepreneurs are recognizing the value of creating an app for their business. One of the most common questions about creating an app is "how much does it cost to make an app?".

If you've ever had trouble explaining this process to a potential client, here is a comprehensive guide that will hopefully answer all their questions. We both know there are many factors to consider so let's dive in.

In this guide, we will cover:

1) The stages of app development
2) How much does it cost to make an app
3) App development costs for past Invonto projects
4) How to get app cost estimates in minutes
5) What to do if you do not have enough budget

Let's start with the basics first. Think about app development costs like building a house or purchasing a car. In our scenario, your app idea is the "house" or the "car". Estimating the cost is impossible with little information. The "house" could be a 4 bedroom and 2.5 bathroom house. Or the "house" could be a 6 bedroom and 5 bathroom house with a basement. We need more details to give a proper estimate. For a house, we need to consider the square footage, flooring options, fixtures, and cabinetry. Let's switch gears and talk about cars. Whether you want a Toyota, a Ford, a Tesla, or a Ferrari, the cost changes based on features. The cost of creating an app is no different.

App development isn't rocket science. Still, we can agree that an experienced team and a systematic process are necessary to create apps. There is this false idea that mobile applications are built in a week and cost under $5000. The gig economy and news coverage on overnight success stories continue to promote the myth that successful mobile apps are inexpensive and easy to build. None of this is a reality. There is more that goes into developing a standout mobile app than meets the eye. An examination of the most popular apps of 2020 will help us understand the cost of app development. 

###Uber

The idea for Uber started as a timeshare limo service. It evolved into a ridesharing service and became the highest valued private startup in the world. The Uber app pilot program was developed with a seed funding of $200,000 and tested in New York City and San Francisco. Since then, it has invested billions in the platform, customer support, and advertising.

###Robinhood

Robinhood is an American app-based stock brokerage that offers commission-free trading.The Robinhood Android app went live in 2015 with a $3 million investment.  

###Snap

The original Snapchat app started in a Stanford dorm room in 2011. You can still read Snapchat CEO and co-founder Evan Spiegel’s [first post](https://www.snap.com/en-US/news/post/lets-chat/) a few months after they launched on the App Store. Evan’s photo-sharing app quickly grew in popularity. Snapchat later rebranded as Snap. Snap is now worth $23 billion. 

The history of each app reveals some interesting themes that led to their success. The founders of each company built a mobile app that solved a problem. Each mobile app received proper investment early in their history.

“Most of the successful apps have three things in common: they solve a problem, they receive adequate funding, and they have a team committed to the idea.”

##The four stages of creating a successful app

A successful app starts with a great idea and a sound investment. To be successful you need to follow a systematic approach to app development.

###Mobile Strategy

A mobile strategy starts with conceptualizing your app idea. You achieve this by identifying your business needs. You may try to create a new segment, establish yourself in an existing market, or solve a business problem. The goal is to understand the company’s objectives and how the app will align with them. There is plenty more to learn about developing a mobile strategy. In our post, [how to develop a successful enterprise mobility strategy](https://www.invonto.com/insights/enterprise-mobility-strategy/), we dive into building a mobile strategy in great detail.

###App Development

Design, performance, and security are crucial factors in app development. Successful apps can scale effortlessly. The app can have a few hundred downloads or several million downloads. Performance should not be affected. Successful apps are also highly secure. The data your app collects becomes a valuable resource. Use data to improve your app, meet consumer needs, provide personalized experiences, and increase revenue.

Following our [mobile app development process](https://www.invonto.com/insights/mobile-app-development-process/) will help you create a scalable and profitable app.

###App Marketing

How you promote your mobile app can be the deciding factor in whether your app is successful or not. Marketing isn’t optional, it's mandatory.

Executing a marketing strategy will maximize user growth and help you reach your business objectives.

###App Maintenance

Lastly, business leaders need a plan to maintain their mobile app. Popular apps have a strategy for long-term growth. Mobile app development is an ongoing process. The truth is no matter how perfect the original app is, there is always room for improvement. You must consider user feedback, market demands, new competitors and advancements in technology.

##How much does it cost to make an app?
Now that we understand what it takes to create a successful app, we can talk about pricing. How much does it cost to make an app? Well, the cost is influenced by several factors. Let’s break it down.

##Mobile App Development Cost Breakdown
The average mobile app will need 1200 - 1500 hours of effort. As work for the different stages is staggered, it takes on average 6 - 9 months to complete. Below we give an example of the minimum estimate of hours needed to complete each phase of the app development process for a telehealth app that we’ve built for a client.

Business Analysis and Documentation: 80 hours
User Experience Design: 160 hours
Back-end and Database Development: 240 hours
Web API Development: 100 hours
iOS or Android App Development: 480 hours
Mobile User Testing: 240 hours
Project Management: 120 hours
App Deployment: 24 hours

Based on the example, the time needed to create this app is 1344 hours. So how much does an app cost? Let’s check.

##App Development Cost By Vendor
The cost, quality, and timeline will vary based on whom you hire. Earlier, we mentioned you have a few options. Let’s take our estimates and use that for comparing costs for each option.

###Freelancers
The average hourly rate of a freelancer on Toptal is $80 per hour. If we take our estimated total development time, this will land us at $107,520. This might be what you were looking for, but let’s think this over.

Hiring a freelancer is fine if you need expertise for just one discipline. If your needs exceed that, a freelancer may not be the best option.

Even if the freelancer provides expertise you need, time becomes an issue. What takes a team a few weeks may take one developer several months. What if a freelancer gets sick for a few days? Everything stops. You risk releasing your app late, allowing competitors to swoop in. When you rely on one person, you are at the mercy of their availability.

The list of issues goes on. If you are serious about app development, we suggest you don’t hire a freelancer.

###App Development Agency
Hiring an app development agency resolves issues you encounter with freelancers. The team will have specialists who dedicate their time to a portion of the app development process. This will help build your app faster and with quality. The average hourly rate for an app development agency is $125 per hour. That puts cost estimates for our telehealth app example at $168,000.

Most app development agencies will fully manage your project. This gives you more time to focus on other aspects of your business. If you outsource the project to an app development agency, make sure they can assist with app maintenance and enhancements. 

###Big Consulting Firm
If you need your development partner to assist with your business strategy then you may want to hire a consulting firm. The average hourly rate for a big consulting firm is $225 per hour. Our estimate balloons to a total of $302,400. 

While there can be a sticker shock with the pricing, a big consulting firm will have a team of specialists with domain expertise which can be a great fit for the larger projects. Development teams at big consulting firms can be large, spanning 50 - 100 members across multiple locations. Consulting firms can offer all of the expertise to keep you worry-free about your technology needs, as long as you are able to manage the costs.

###In-House Developers
Perhaps you want to find out how much it will cost to make an app by yourself. In-house developers can be a great choice in certain situations. You can hire exactly what you need. The cost of development will adhere to the number of salaried employees on staff. Average salary for user experience designers, app developers, and product managers range from $80,000 to $150,000. Salaries can increase if you are hiring in locations with higher cost of living such as New York City, Boston, Seattle, or San Francisco. 

The main downside of in-house development is scale. The process of building a team can be time-consuming. Sourcing each employee is a multi-week process that will set you behind schedule very quickly. If you live in a region that has a small talent pool, hiring the best talent is near impossible.

Hiring in-house developers can also add fixed costs to your payroll. A single mobile app may not need a full-time dedicated team for a long term. Instead, outsourcing to an app development agency or a big consulting firm can reduce your fixed costs. Outsourcing your app development can prove to be more flexible, less costly and allow you to scale.


##App Development Cost By Type

In app development, you have three main choices. You can build a mobile web app, a native mobile app or a cross-platform mobile app. You also have to decide on a mobile platform, if you want to build for iOS, Android, or both. What you choose will influence cost.

##How to get app cost estimates in minutes
There’s a lot that goes into developing a successful mobile app. Cost will play a huge role in how you decide to build your app. Before starting any development, have a mobility strategy, hire an expert app development team, and have a realistic project estimate.

If you are trying to develop an app, you can use our [app development cost calculator](https://www.invonto.com/app-cost-calculator). No matter what you are building, the app cost calculator will help you understand what you will need to budget. All you have to do is answer a few questions about your app features and receive an estimate in under five minutes.

##What can you do if you do not have enough budget?

You don’t have to give up on your idea if you do not have a budget to create your app. You still have a few options.

###Start with wireframes

Creating wireframes is an essential to develop an app. Wireframes help turn app requirements into a visual storyboard. You can create wireframes for as little as $10,000. Wireframes help you demonstrate the potential of your idea to investors. This can greatly improve your chances of receiving investments for your project.

###Create a proof of concept (PoC)
A proof of concept is a version of your app that includes only core functionality. PoC allows you to test your app with a focus group as a pilot project. PoC can be created with as little as 20% of your app’s cost estimates. Validated PoC can increase your chances of receiving VC investment for your business. PoC is used by both startups and enterprises. It minimizes risk and there is no need to fully commit to an expensive project.

###Build a Minimum Viable Product (MVP)
When you are on a limited budget, you need to evaluate your "wants" vs your "needs". It is easy to get carried away with all the bells and whistles of app development. An MVP is designed to restrict the scope of work. By focusing on key functionalities, you reduce the financial investment and delivery timeline. In our experience, an MVP could cost as little as 50% of the total app development cost.

##Conclusion
App development is serious business.  A successful app could launch the next unicorn or elevate your digital transformation strategy. It might seem like a daunting task, but you have support. An experienced development team can help you deliver your app idea successfully, on time, and within budget.