When building a new product, it can be tempting to hire your cousin’s best friend who studies computer science at XYZ University. We don’t blame you. If you feel you have a tight budget, this route may seem more cost-efficient than hiring a software firm.
Time and time again, we see businesses take this route – whether it’s a startup in its infancy or a business that’s been around for over twenty years. And time and time again, we see this lead to failed software projects.
The fact is this – custom software is expensive. It’s expensive because it’s high-risk. It’s high-risk because it’s complex. It’s complex because you’re building something for the first time. But if done right, custom software can be an asset for your business to drive new revenue and efficiency. With the right approach, you can decrease your risk upfront without breaking the bank.
In this post, I want to address the following concerns about the cost of custom software:
- What is the common cost of custom software?
- How much will your project cost and how do we know?
- How will you be billed?
- Can you count on budget when going with a custom software firm?
- Are there any guarantees?
What is the common cost of custom software?
This is a tough question and varies from firm to firm. Projects can run for a few months to a year or more. Some projects have a budget of $50k and other have budgets of over $1 million. Based off our experience developing custom software for over a decade, we know many projects fit in one of the buckets below. There are exceptions, of course, but these are the most common:
|Common Projects||Ballpark Figures||Ballpark Schedules|
|Research, design and planning engagement||$15k to $75k||2 to 6 weeks|
|Proof of concept, prototype or demo software||$35k to $70k||1 to 2 months|
|Web or mobile utility (does a few simple things well)||$50k to $100k||2 to 3 months|
|User-facing web or mobile app with UX emphasis or the first phase of a complex project||$150k to $400k||4 to 7 months|
|Complex, multi-phase, multi-platform product||$300k to $1M+||6 to 12 months|
How much will my project cost?
To be honest, we can’t answer this question responsibly until we understand your idea, business, market, users, etc. While we can’t tell you exactly what your project will cost, we can draw on the 100+ projects we’ve delivered since 2005 and tell you what’s typical for the projects we’re best suited to help you with.
It’s really hard to know the specific costs of a project without going through a discovery phase like our Research, Design and Planning engagement, however we can usually help you set a responsible budget during before you ever hire us.
It’s also important to keep in mind that most projects get broken up into multiple phases. During the first phase of development, our goal is always to focus on the highest value features and architect something that sets us up for future phases.
No matter how large or small your budget, it’s always our goal for the value our clients receive to significantly exceed the fees we charge.
How much will I be billed and can I count on the budget?
Custom software firms typically configure your bill one of three ways: time and materials, fixed-price, or fixed-budget, scope-controlled. FrogSlayer always uses fixed-budget, scope-controlled engagements, meaning we’ll help you develop a responsible budget and we’ll stick to it. The only variable we’ll control is scope and together we’ll scrutinize the real business value of every feature requested. After all, 64% of software features are rarely or never used.
For projects that have a total fixed budget, we track and bill by the hour. We feel this is the most straightforward way to bill. If someone is out sick then you don’t pay for their time. In turn, this also helps ensure that everyone (including clients) are focused on the most valuable features at any given time as opposed to encouraging scope creep. It takes everyone’s awareness of the budget and how we’re tracking to keep the project on-target.
For our projects that have a total monthly budget, we still track hours to ensure that we hit the mark each and every month.
Each week, we ask the question: “How can we get the most value out of the remaining budget?” Since we’ve never worked with people who have fewer ideas than they have money or time, our job is to figure out the best possible software application we can build for the given budget. That requires thoughtful understanding of the users and the market. From there, we’ll work to control the scope of the project, both in depth (polish, refinement, complexity) and breadth (features, functionality).
Are there any guarantees?
We can’t speak for the other firms, but we guarantee cost when we feel the risk has been mitigated upfront. In an industry that’s infamous for cost overruns and low-ball bids, we go to great lengths in our upfront process to de-risk projects. This effort produces spot-on solutions, accurate estimates, and successful relationships.
If we underestimate something, we’ll eat 100% of the additional cost until we’re back on track. We do this because it’s the right thing to do.
We also guarantee that you can cancel anytime. By putting the power of termination in our clients’ hands, it ensures we’re held accountable each and every step of the way.
If the value we bring significantly exceeds the fees we charge then this is a win-win for everyone.
Do you want to move forward with your project in a predictable and measureable way? The choice is yours; we give you the power to control the pace according to your varying business needs. FrogSlayer can provide you with the development team to accomplish any software project need – no matter the size, industry, or stage of development your company is in.