How to Estimate Software Development Costs

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Software Development Costs

The software development process has many challenges, expectations, and concerns. Anybody who is after an application software development company would like to inquire about the effective cost of developing a software platform for their respected business.

The investor would like to inquire about the software development cost breakdown, the time it will consume, and the technologies that are going to be used. Costing, however, is a major concern that directly impacts the investor budget. Not all businesses have a huge budget, and many may opt for a low investment.

FYI, an identical sketch could generally lie between $10k to $400k, depending upon several factors we will discuss further in this article.

A business would like to identify the investment it has to make. A rough estimation of cost is an initial stage for any investors. A company may detail the software’s features, used tech stacks, integration, and implementation cost. 

Estimating software development cost

A software development cycle (SDLC) goes through several phases, which implies how much software development will impact your overall budget. A scoping session is the best time to discuss a better realization of the software development cost.

Project goals

The project’s goals should be clearly explained to the software development company at the beginning of the conversation. A good explanation should be well-versed to clearly identify the project’s goals and the software platform’s objective and highlight the target a business needs to achieve. It also helps the development company to estimate the software platform’s average cost.

Target audience

A software development team is always willing to identify the target audience. It will help them identify customers interested in your services/products. This influences the software development company to conduct a market analysis, find the trending pattern, and research the competition in the market for the respected application software. It clearly acknowledges a cool custom cost for the software platform.

Types of software

The type of software should be clearly understood before you initiate a discussion for the development process. Identifying your requirements and determining the duration is very necessary for a business. Additionally, you need to identify the nature of the software and the features it will cover in terms of offering services.

The software cost is completely based on the complexity of the software and the number of features it will integrate with the software. A well-equipped software would always persuade users/customers to use your platform repeatedly, resulting in more sales that increase productivity.

User experiences

User experience is the key tool for the success of any business. One of the most important prerequisites is to identify the flow of a user’s journey. A user journey can create a rough sketch of what tools need to integrate into the system. It will help the development company to offer you a rough idea for the custom development of the software platform.

Factors responsible for affecting the cost

A software development life cycle (SDLC) goes through several layers of phases. There are lots of factors responsible for affecting the cost of the software. Several layers of the software development phase include planning, developing strategies, analyzing the pricing, and the overall requirements. In this section of this article, we’re going through different factors affecting the cost.

Nature of the software project

The nature of the software projects you’re after will define the cost. Also, the software goes through several phases that need a lot of attention. Some software may not seek many features so the development process would be less time-consuming. At the same time, custom software solutions may need plenty of features and lots of integration of various tools resulting in plenty of time devoted by the development team. These can be considered large-scale software, costing plenty of money for development.

Size of the software project

The size of the software platform would decide the duration of the project. Also, the development phase may require loads of integration, implementation, and testing phases. Implementation of multiple tools and technologies may be longing the project duration, and time could also be another reason to influence the cost. A massive database is required if the users/customers are more involved with the potential software solutions. This may introduce an engagement of a cloud database approach or require big data for this larger software platform.

Size of the development team

When a business or a system is explained to the development team, the development team’s primary goal is to go through each phase and collect all the necessary information. It helps them draw a flowchart and create an algorithm to define how the processes will be divided to achieve the main objective of the software solutions. Determining the number of team members for a particular project completely depends on the type of the project and how complicated it is to develop it. However, the trivial software development process could require only a few members.

The functionality of the project

Functionality is another reason that may affect the cost of the software. The software’s functionality includes tools & features, which complicates the software development process. It includes developing, deploying, integrating, and testing a software platform. Let’s understand the categories of the software functionality briefly:

  • Functionality may include implementing the different parameters or sets of functions required to fit with the business standing of a firm.
  • A business may seek advanced implementation of technical solutions. It will be hard to implement using conventional approaches.
  • A business may seek personalization of the design, which may become lengthy since the customization takes a lot of time.

UI/UX designing of the project

Implementing customized and the best GUI-based design structure is not an easy process. A customization that fulfills the business needs and gives users a better interaction can only be delivered through optimizing the UI/UX design. The cost of implementing UI/UX design completely depends on the complexity of the design or the amount of personalized work it requires. A perfect or ideal UI/UX design phase may seek a large sum of money from the total development cost.

Estimation example of software development costs

Software development cost estimation depends on the time frame required to develop a project. Its contribution to the breakdown of the development phase. Some of the concepts that impact software development costs are as below:

  • Designing phase
  • Prototyping
  • Front End
  • Back End
  • Error and bug fixing
  • Software testing

Understanding varieties of the cost estimation

There are different types of cost estimation processes. Generally, it is based on the different parameters and clients’ objectives to estimate the cost. Let’s go through this briefly to find these details here.

  • Rough Estimates – A rough cost estimation is considered if a client has a rough idea or a vague amount to develop a software platform. Development companies go through the requirements of a client, and by looking at the same functionality of previously developed software, they chase a rough estimation.
  • Budget Estimates – This gives a core idea or exact amount to develop a software platform. The budget estimation represents the maximum amount a client will spend on a particular project.
  • Project Specific Estimation – It consists of project deliverables, functioning, designing, development, and other activities carried out while developing the platform. It gives a clear idea about the estimated budget for a particular project.

Costing to develop a software platform

Different types of software platforms must vary with the amount of development cost. As discussed, implementation, integration, and other factors decide the cost. Let’s still find out a vogue amount for software development.

  • Custom Software Development CostCustom software development, generally, ranges between $40,000 to $400,000 because the development company starts it from scratch. In addition, it also depends on the complexity and nature of the desired software. A large-level platform needs years to develop, while small-custom-made solutions may end within a month only.
  • Mobile Application Development Cost – Mobile app development costs are less in comparison to software platforms. A normal mobile app development cost may range between $5,000 to $10,000. However, a medium range costs between $40,000 to $60,000, and featured custom apps range from $70,000 to $100,000.
  • Website Development Cost – Design, development, maintenance, and outsourcing are the key factors in deciding the cost of website development. Other features like marketing and outsourcing may increase the pricing of the overall development cost. $15,000 would be a generalized cost for the website development.
  • Enterprise-Level Solution Cost – Enterprise-level solutions must meet robust yet high-security standards for the whole development process. Generally, enterprise-level solutions are typical to implement and require lots of time. These projects may cost between $70,000 to $800,000.


Estimation of the software development cost is essential for any business. Having a rough idea about the development cost gives a crystal clear idea for businesses. Development cost estimation also entertains the businesses about the precise amount of time and cost a development company will take.

An agile software development cost estimation involves going through several phases, collecting useful information, and declaring an adequate time and cost for a software development project. Having the consideration of an early discussion is the basic purpose of getting to know the actual cost of the development process. This is the best way to consider your software development. It helps to recognize your estimated budget and the time frame you have for the development process.

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Roy M is a technical content writer for the last 8 years with vast knowledge in digital marketing, wireframe and graphics designing.

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