How To Budget Software Development And Reduce App Development Costs   

Dyachenko Anastasia
Dyachenko Anastasia
CEO at Cadabra Studio. UX expert and business consultant

When you plan to launch your new business and build software, you want to combine quality and low cost. To be honest, everyone wants to save their budget as much as possible. But not everyone wants to fail, agree? That is why it is vital to know all pitfalls and steps of software development budgeting.


Before you start reading this article, we want you to know that it is possible to build robust software and reduce the costs of creating an app. Read and find all the useful information right below.

How To Plan Software Development Budget

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Concept Design by Cadabra Studio

The development of your website or mobile application cannot start with the development process itself. A long planning road precedes the development stage. Thus, let’s not beat around the bush and check some practical steps to plan the app development budget. 

Estimate Your Project Value

Apart from the average cost to create an app, it is required to understand the project’s value for potential users. Will people use it? Or will your software be another clone of multiple existing apps? Also, you should have at least approximate expectations of revenue generated by new software. These plans will help you start the road in the right direction. 

Delve Into Historical Data

It is unlikely that your project will be unique and first on the market. However, if it is, skip this point. If not, you must analyze the market and competitors you are going to beat. Historical data means the data of competitors’ success and mistakes. When you know more about the product of competitors, you will estimate your budget more accurately. And detailed analysis helps you reveal all pitfalls.

Conduct Risk Analysis

The risk analysis will be necessary to avoid problems during the deployment and release stage. We strongly recommend you identify potential risks that will lead to app failure and higher cost for app development, and you need to do it at the beginning of a software life cycle.


You can also hire a risk assessment manager who will analyze your idea backwards and forwards. Yes, it will require additional costs, but you will consider all potential risks. Also, below we will speak about factors that affect the development cost. 

Request For Detailed Estimate

Once you have completed all the stages above and gathered detailed requirements for your future software, you need to hire a software development company like Cadabra Studio to provide you with application development costs. Our specialists will pay rapt attention to each detail.

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Concept Design by Cadabra Studio

Remember that the final cost will depend not only on your app’s complexity but also on the development team’s location. Think about software development outsourcing (see more details in the next section). A detailed estimate will show precisely how much money you will need to invest in the development. 

Add A “Safety Cushion” To Your Estimate

Although the software development process can be thoroughly planned, you should always be prepared for additional expenses. That is why you need to allocate funding for 50% of the initial estimate.


The matter is that the world of development tools is rapidly changing, and developers can offer you to integrate a new feature that will improve your app. But it will exceed the budget limit. Thus, additional money savings as a “safety cushion” will be preferable.

Launch An MVP

Finally, take your time, and create a minimum viable product first. There is an article about MVP importance and why you need to release a product with must-have features only. But, simply put, an MVP will help you test an app idea and gather feedback from first users. Quality comes first, remember? 


If the app will attract users and they will like it, you can upgrade it. If it fails, you won’t lose so much money for MVP development as it could happen with a large app full of features. Your goal is to provide users with what they want. 


Get a detailed estimate of your project right now! Contact Cadabra Studio and share all details with our business development manager. 

How To Reduce App Development Budget Without Losing Quality

You have all the necessary steps on how to plan the budget for your software at hand. But what about the ways to reduce app cost? If you need cheap app development, it won’t be an optimal solution since a cheap app is almost always equal to a bad app. But anyway the cost may be much lower, and there are some tips for you to consider.

  • Teams involved. It is necessary to speak a little about participants of any software project. There are two teams — the client’s team and the contractor’s team. In our case, your team includes you as the owner and other team members you may need. The contractor team is the Cadabra Studio’s team, if you hire us for the development, consisting of a project manager, UI/UX designers, web/mobile developers, QA engineers, and business analysts. But the team composition may be changed depending on the project requirements.


  • Build a plan. The more detailed information you provide, the more precise your estimate will be, and all details will be taken into account. If you don’t know how to build an app business plan, look through our article about plan creation. And mind that described plan fits web app development as well. 


    However, if it is difficult for you to gather all your app requirements, our business analyst will be at your disposal. You can read more in the article about business analyst roles and responsibilities.


  • Remove additional features. If the detailed estimate is too high, adhere to the “launch an MVP” rule from our previous section. Remove all those features your app may function without. Even an app with basic features but an intriguing idea may capture the attention of users.


  • Outsource your app development. This is the primary tip for cost reduction you need to be aware of. The outsourcing of the development to the offshore regions can help you reduce a substantial amount of money. At the same time, the quality level of the development team will remain high. Based on this, if you outsource app development, the cost can be much lower. 


    Hurry up to read the article about offshore software development services, and you will find out more about regions where you can hire developers at affordable rates. Cadabra Studio is an outsourcing company that values its reputation and knows how to cooperate with clients.


  • Don’t forget about quality assurance. QA engineers must test your app thoroughly to detect all bugs so that developers can fix them immediately. The total absence of bugs and defects in your app will let you avoid unexpected expenses in the future.


  • Communicate with a team. You must hold meetings with the development team after each sprint. Sprint is a development stage that has a set deadline. They are used in Agile methodology, which many development companies apply in their practice (Cadabra Studio is not the exception). So permanent meetings will be useful for both parties — developers will understand your goal better, and you will obtain the project you wanted.


  • Testing at early stages. Another tip to follow is to test your app at the prototyping stage. Early testing will be valuable to gather feedback from beta testers and take them all into account. If you test an app after the official release, and users won’t like it, you will lose a lot of money, and the software modification will be more expensive.


  • Don’t complicate with a design. Software design shouldn’t be complicated — a lot of animations and cartoon graphics don’t guarantee your app’s popularity, but it will be expensive. Our UI/UX designers know how to create an eye-catching design but keep it simple. Low-cost app development is possible with a straightforward but thought-out design. 


  • Hire a full-stack team. You should hire a company that provides the development on a turnkey basis from scratch, and it has all the necessary experts in staff. First, it will be a cheaper option to cooperate with one team. Second, it will be difficult for different teams to communicate appropriately, and it may be the reason for a low-quality result. 


  • Allocate enough time. Haste makes waste. Your project cannot be created within a short period. Let developers pay enough time to the development of your app to ensure that everything is implemented correctly.


How much time does it take to build your project? Contact Cadabra Studio to get accurate deadlines and plan your schedule.

Choose The Best-Fitting Contract Model

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Concept Design by Cadabra Studio

Another point you should take into consideration is the contract type you choose. Each type of contract has its particularities, and you should know more about them to make a final decision according to your requirements. 

Fixed Price 

This contract type implies that your project has strict deadlines and the budget is agreed upon beforehand. You won’t need to pay additional money unless you want to add more features. It is an excellent option to plan your budget, but the development team ceases to be flexible.


Especially when it comes to large-scale apps, a fixed price model can play a dirty trick in a rapidly changing IT world. Your app won’t be topical anymore since the market will require a brand new approach. That is why the popularity of a fixed price model loses momentum.

Time And Material

Unlike the fixed price contract, the time and material model doesn’t demand to set strict deadlines. The development process is divided into iterations, and after the implementation of each feature, you will test an app and discuss it with a team. 


You will have all information about the estimate, but you will pay for each stage once completed. And the final cost may be higher than if you would opt for a fixed price. But if you think that the app has enough functionality for the release — you can stop the development. Today this model becomes popular as opposed to the fixed price contract.

Dedicated Team 

As it is clear of its name, you hire a team that includes developers, designers, QA engineers, business analysts, etc. You control their work ultimately, and deadlines, scope, workload is up to you. This model can be the most expensive, but it also depends on project requirements. 


Besides, you need to be wholly involved in management and communication processes, but this model is for you if you want to control every detail. And you should choose a dedicated team model if you plan to build a large-scale app with a complex business strategy. 

Key Factors That Affect The Software Development Cost

Finally, it is worth mentioning that some aspects may negatively impact the final cost of your app. And it is essential to know them all so that you can be prepared for pitfalls. Yes, you will find some of the points we have already mentioned above, but we think it would be better to structure these factors in a separate section once again. 

  • App size and type. Large apps require more development time, and it leads to higher expenses accordingly. Remember that you need to start with MVP development and launch a product with a limited number of features to test its viability. Also, the cost of development depends on the type — be it a native mobile app, gaming app, cross-platform apps, etc.


  • Platforms. Well, it is an apparent reason for higher costs — the more platforms you create an app for, the more expensive the development will be. As you build an MVP, it is recommended to use one platform for a start (iOS or Android). But if you want a website, you don’t need to worry about the number of platforms.


  • Team’s location. Let us remind you that the region where you hire developers will directly impact the final cost (negatively or positively). When you outsource software development to regions with lower rates, you save a lot of money. 


  • Design complexity. Complicated design creation will take a lot of time, it will be expensive, but an MVP product doesn’t need a fascinating design. It just should be built wisely and be adapted to the software particularities and goals. 


  • Maintenance/marketing. When the app is released, don’t forget that it will be necessary to update it, add new features, etc. Besides, it is required to invest funds in marketing strategy to promote the product, and it will also require additional expenses.

Wrapping Up 

In conclusion, we may note that startup costs for app development may be totally different. Everything depends on your expectations, on the budget you are ready to allocate, software requirements. But there is always an option to reduce your budget, exceptionally when you performed thorough planning following the steps above.


Anyway, everyone has their job to do. And all development-related processes must be delegated to professionals like Cadabra Studio. We will apply our skills to provide you with a high-quality result. Contact us — troubleshooting is our middle name. 

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