Tobin Harris, Managing Director at app development specialist Pocketworks
Two minute read
A lot of businesses that think about building an app want to know what kind of investment is needed. Most people will say “it depends”, and they are right. But, that’s not very useful to you now, is it?
However, you can try the alternative technique below to work out how much your app will cost.
Let’s go back to the original answer; “it depends” and explore why this is. As you can imagine, there are a lot of factors that influence the cost of an app. How complicated is it, what scope of features are needed, the location and size of the development company, the skills they bring, the technologies used, the list can go on.
For example, Uber runs a team of 2,000 engineers and probably spends at least £14m a year on its mobile app, because the success and functionality of its app are intrinsic to its business. On the other end of the scale, you can get a lot done with £100k, and sometimes less.
So the scale of your need can be directly linked to the cost.
The best way of working out your app investment is to look at your business case and opportunity size over two years, and then budget 10% to 20% of that. For example, if your app will increase your bookings by £10m over two years, a sensible investment would be £0.5m – £1m.
You won’t have to spend that all at once. It’s best to think of an app as a journey. You create something, learn from customer feedback, and then refine it and tune it. This is how successful apps are made and it’s why I’d recommend looking at an app as a two-year investment.
If you’re not sure what the business opportunity is, some app companies will be able to offer consultancy to build a business case with you. It takes a little work but can often be done in days or weeks if you have the right data. They might also be able to help you see the business opportunities you’ve not seen before.
Once you know your business case, direction and budget, the next step is to work with an app developer and define a solution that gets maximum results within that budget. You can de-risk the project by allocating 25% budget for the first three-six months and working on the most important things first. So, if your two-year app investment is £500,000, then you could budget £125k for the first milestone.
In summary, the size and scale of your app, and how much ongoing refinement and management it will need, will often dictate the price. It’s wise to develop a business case to understand the return on investment and minimise the risk by working with an experienced app development specialist, as well as spreading the cost over a number of milestones.