How Much Does Custom Software Development Cost in 2024?

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Custom software development cost

In this article, we will address a most common question we get from our clients: How much does custom software development cost?

This is a difficult question for anyone in the industry to answer. Each custom software development project has different needs, technology requirements, integrations, and levels of complexity. In simple terms, every business has unique software needs, just like their goals, ideas, and products.

While it’s challenging to pinpoint an exact cost without specifics, we can provide a general estimate of the cost for custom software development. We’ll also explore 7 factors that often significantly impact the cost of custom software.

Custom Software Development Cost: A Quick Overview

From what we’ve seen, the cost for custom software development usually falls between $20,000 and $500,000. This price depends on the size of the application being designed and developed.

Small apps typically cost between $20,000 and $50,000, while medium-sized apps usually range from $50,000 to $200,000. Large applications, especially those for big companies, often start at over $400,000.

This price range is quite broad, which might not help you much if you’re trying to set a budget. That’s because there are so many different kinds of software. A custom development project can be anything from a simple calculator app on your phone to a complex billing system that serves millions of users. Each custom-built application is unique.

7 Factors That Affect Custom Software Development Cost

Every item or piece of software we plan to purchase comes with its own costs. These costs can be influenced by several factors, some of which are out of your control, while others are based on the decisions you make. In this case, we’re talking about the choices you make for your software.

When creating custom software, various factors can either increase or decrease the development costs. Let’s explore these factors in a bit more detail below.

1. Software Size

The most important factor that affects the cost of developing custom software is the size of the software itself. It’s clear that the bigger the project, the more money you will need to invest. The size of your software can help you estimate the development costs.

Startups usually start small by using an MVP (Minimum Viable Product) development approach to launch their products. These products are designed for a smaller group of users to test them out.

In contrast, larger companies often need bigger teams to develop their software because they have more complicated processes and systems to consider.

Additionally, some organizations may need smaller to medium-sized software, like a website, an online store, a web app, or a simple application, which usually have lower requirements.

By looking at the size of your software needs, you can get an idea of how much custom development will cost.

2. Software Complexity

One important factor that affects how much it costs to develop software is its complexity. Complexity refers to things like the number of screens, workflows, automation needs, how different processes connect, and whether tasks can be done independently or depend on each other. The more features you want to include in your software, the more complex it becomes.

For example, if you want to create a system that allows different users to make profiles, upgrade them through payments, customize them, and view other users profile, the cost will go up. This is because you will need a larger database and more compatibility for upgrades.

The same idea applies when you add complicated logic and outcomes to your software—this takes more time and will raise the overall cost.

This is why many businesses choose custom software development companies. They often have unique and complex needs that off-the-shelf software can’t meet because it’s usually simpler and less flexible.

3. Creativity & Innovation

Many businesses, especially new ones, want to create unique software. They aim to add exciting features, showcase their creativity, and provide a user interface that stands out. To achieve this, they need to find skilled UI developers, graphic designers, and even a team to help brainstorm new ideas for their product.

Creativity and innovation aren’t just about the user interface or graphics; they also involve the user experience and the custom digital experience they want to offer. Designing a great experience can be expensive. The more detailed and fancy you want your software design to be, the more it will cost.

However, many startups find simplicity less enjoyable. So, if you want to be more innovative and creative, expect your development costs to rise.

4. App Integrations

Another important factor that affects the cost of your custom software development is the system integrations you need. Most software products cannot operate on their own; they usually need to connect with other applications, APIs, or older business software.

You might also need different APIs to help gather all the information you need when moving data from another app to your new custom software.

Connecting with third-party apps or popular APIs might not be too expensive, but integrating your custom software with an older legacy application can be more costly.

Additionally, some software might require creating new APIs to ensure everything works well together, which can also increase the overall cost.

5. Team Required

This is pretty obvious. The more people you need to create your custom software, the more it will cost to develop. This cost is also related to how big and complicated your software is.

If you need a big application with lots of new features, different screens, customization options, and separate dashboards for various types of users, you’ll need a bigger team.

On the other hand, if you just want to start with a simple single-page application or develop a minimum viable product (MVP) to test your idea first, a smaller team would be enough.

6. Database Migrations

When creating custom software, teams must first back up the current data and move it to the new database they select. The size of your database, its security needs, any existing weaknesses, and other factors can increase the cost of custom software development.

The software development team is responsible for managing everything involved in data migration, such as checking for accuracy, changing the data format, cleaning up any errors, analyzing the data, ensuring its security, profiling it, and making sure it meets quality standards.

All of these steps usually raise the total cost of developing custom software.

7. Platform Choice

One of the most important things that can affect the cost of your custom software development is the platform you want to build it for. There are several options you can choose from.

For example, you might want your software to work on mobile devices like Android or iOS. Alternatively, you could create software for desktop users on different operating systems like Windows, Mac, Linux, or Unix.

These are just some general categories, but nowadays, there are also specific needs for software development for various digital experience platforms, content management systems, and more.

Calculating Custom Software Development Cost

Let’s get to the main point of this blog- how much does custom software development really cost?

We’ve already talked about the different factors that can affect the cost of software development. Now, we need to find out what it actually costs to create custom software.

There are many expenses involved in this process. Before we dive into the details, here’s a quick summary of the average costs for custom software development.

These costs can depend on things like the size of the software, the type of software, the number of hours needed to work on it, and the size of the team working on the project.

Custom Software Development Cost Based on Size

Here’s a quick overview cost based on the size of the software:

  • For smaller software or a Minimum Viable Product (MVP), the average cost to create it usually ranges from $20,000 to $50,000.
  • For medium-sized software aimed at small to mid-sized businesses, the cost can vary between $50,000 and $500,000, depending on the audience size.
  • For larger enterprises that need custom software with multiple integrations, support for different locations, and various languages, the cost can be anywhere from $500,000 to $1,000,000.

Cost of Custom Software Development by Type

There are many types of software being created today. Each of these requires different levels of work and various technologies. Here’s a breakdown of the average costs for custom software development based on the type:

  • SaaS Product: $50,000 to $200,000
  • Web Development: $10,000 to $50,000
  • Mobile App: $10,000 to $200,000
  • eCommerce Solution: $10,000 to $500,000
  • Internal App Development: $1,000,000 to $5,000,000
  • CMS Development: $10,000 to $50,000
  • CRM Software Development: $10,000 to $50,000

When figuring out the cost of custom software development, it really depends on how much you want to customize it, how big your software is, and what features you want to include.

Now that we know the average costs for building custom software, let’s explore the main expenses involved in the process.

Main Costs of Custom Software Development

Let’s discuss the main expenses involved in the development process, especially when you choose to go the custom route.

1. Team Salaries

To create an effective custom software, you will always need a good development team. A good custom software development team usually includes two developers (one senior and one mid-level) for front-end and back-end coding, a quality assurance (QA) engineer, a project manager, and a user interface/user experience (UI/UX) designer.

Keep in mind that as your project becomes bigger, your team size will likely need to grow as well.

Team MemberCost per hour in The USCost per hour in Bangladesh
Software Developer (Full stack)$65$35-$40
Software Developer (Front-end)$60$25-$30
Project Manager$85$45-$50
Business Analyst$50$45-$50
Q/A Engineer$55$30-$35
UI/UX Designer$56$35-$40

The cost of hiring developers can change based on whether you create your own team or outsource software development to countries like Bangladesh, India, or Brazil.

2. Technology

Another cost to consider in your software development is the technology you’ll need. Different types of software require specific technologies, which can increase your total development expenses.

You might need various tech experts for different parts of your project, like the front-end (what users see), the backend (the server-side), and other needs.

Additionally, if you want to include advanced features that use technologies like Blockchain, Data Science, Artificial Intelligence and Machine Learning, this will also raise the overall cost.

3. Features

Another expense that comes with creating custom software is the cost of features. The more features you want to include in your software, the higher the cost will be.

Features such as geolocation, automation, payment systems, chatbots, and others can increase the total cost because they need new technologies to be added.

4. Hours Worked

When figuring out the cost of custom software development, it’s important to consider how many hours will be needed. Smaller projects, like Minimum Viable Products (MVPs) or prototypes, can be completed in just a few months.

On the other hand, larger projects for big companies can take years to finish. This time affects the overall cost. You can ask the software development company for an estimated timeline to see how many hours they expect to work on your project.

5. Design

The cost of your project will also depend on the design. If you want a more advanced design or better user experience (UI/UX), it will likely cost more. Experienced UI/UX designers are hard to find and can be expensive.

You can adjust your software design based on your budget, but if design is more important than functionality, it’s smart to invest in a good design team. Depending on what you need, you might spend 25-50% of your total budget just on design.

Additionally, there are extra costs for things like software architecture design or organizing the information structure of your software.

These are some of the common costs involved in creating custom software. Don’t forget to think about the costs after your software is launched, such as maintenance, marketing, analyzing results, and scaling up if you started with an MVP prototype.

We Can Help You Estimate the Cost

Since 2017, Laraforest has been providing top-notch developers to build custom digital solutions for businesses of all sizes. Our network includes skilled technology experts ready to create exceptional custom software for you.

Whether you have a rough idea or specific requirements for your software, share them with us, and we’ll provide a preliminary estimate of the development costs. We consider all aspects of your project to develop software that aligns with your business needs and meets user expectations.

Reach out to discuss your requirements, and we’ll assemble the ideal team to bring your custom software vision to life.

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