If your startup doesn’t have the internal resources to build an app, you’ll want to outsource the work. While many factors go into building a roadmap for developing a new app, cost is one of the most significant. You need to know not only what to budget, but how each feature you’re considering will impact the budget. What information do you need to provide the developer in order to secure an estimate? And what should you look for in the estimate to be sure it’s thorough and accurate? This article will share all you need to know to request and finalize a project cost estimate.
1. Communicate Your Needs
The first step in the process is to provide your developer with your needs for the project. You should include both the details of the project as well as some information about your business and your industry. This context will help them to understand your needs so they can recommend the best options to you. Specifically, share:
- Information about your business, including your mission and the products you currently offer
- Your target customers and the benefit(s) you want to provide through the app
- Required features and functionality for a Minimum Viable Product
- (These may change as your developer adds their expertise to the conversation, but you need a place to start.)
- Specific needs like launch timing, industry-specific requirements, or other external factors
- App goals, including growth expectations and monetization strategy
Point out what you see as the minimum requirements based on the primary problem you aim to solve. Also, provide a prioritized “wish list” showing additional features that are part of the long-term strategy. Ask for a separate estimate for this work to give you an idea of the overall cost.
2. Preliminary Review
An initial meeting will help the developer determine how to best meet your needs and accurately estimate project cost. This review must be thorough in order for the developer to get an understanding of your goals, the problem you aim to solve with the app, the needs of your target market, technical requirements, etc. Without these details, the developer won’t know what to recommend, and the estimate they provide won’t be accurate.
At Designli, we conduct this review as part of our SolutionLab workshop, where we learn the information described above and help our clients think through the factors that will affect the app’s success in the marketplace. Our goal is to add our experience building successful apps to the conversation, combining it with the client’s vision. This allows us to offer recommendations and options for an MVP that’s most likely to resonate with the market and provide a sustainable business model.
3. Analyze the Project Cost Estimation
Look for the following components in every detailed estimate you receive.
Clearly-Defined Scope
The first thing you should see in any cost estimate is a definition of the project scope. This should include all features and functionality for the final deliverable that will be completed in the project.
All the work that the developer will do should be clearly outlined. Does the estimate include research? What will the testing effort include? Will the developer do testing during every phase of development? How about integration testing for third-party apps? Will they handle post-launch maintenance? You need to know if the estimate includes ongoing support or if the developer prices that separately.
Cost Estimates
Cost estimates should be broken down by product feature. If third-party vendors will be involved, their work or product should also be described and priced. Here’s what to look for specifically.
Internal Costs
Internal costs should include all the work that the developer will do to develop the product. And these costs should appear in a Work Breakdown Structure like the one shown below – which is a list of every feature the app will have, and the hours required to deliver each feature (as a way to decide what features you’d like to move forward with in your ‘Version 1’).
Want to see a Work Breakdown Structure in action? Schedule a screenshare to see an example of the WBS we use at Designli.
It’s important for each piece of functionality to be priced individually so you can make better decisions based on the cost vs. benefit of each item.
Third-Party Costs
If the developer is using another company’s product or service to build the app (for example, Stripe for payment processing), these costs should also be detailed in the estimate. The integration effort should be noted in the scope section of the estimate and in the internal cost as well.
Delivery Date
Though not all estimates will include an expected delivery date, it’s a good idea to request one. There are three pivotal pieces of every project: scope, cost, and timing. Changes in any one of these impact the other two, so requesting all three in any estimate is a good idea. Keep in mind that any changes made to the scope will affect the delivery date.
Caveats
This section will vary based on the specifics of the project. If there are any caveats with the estimate, they should be clearly detailed. For example, if you need to provide the developer with an approval code or access to an application, both what is required as well as the date it is needed by should be detailed. Or, if funding approval is required to continue development past a certain date, that should be documented. It’s important for you and the company you choose to develop your app to understand all the variables before any work is started.
Understand Your Costs and the Factors that Impact Them
Seeking external help to build an app for your startup is a way for your startup to do more with limited resources. But it’s essential for you to understand the costs involved, the factors that impact those costs, and the value of each feature compared to the cost of building it. Knowing what to look for in a cost estimate and how to analyze it will help you ensure your budget is well-spent.
Want to learn how we help you hone your app idea through our SolutionLab workshop? Get in touch, and we’ll schedule your call.
