How Much Does It Cost To Develop Custom Software

Software development is one of the most expensive parts of building your company. But who said it’s not possible to build an application on a budget? In this article, we will be discussing applications’ cost estimation. So that you can enjoy the perks of a business application without burning a hole in your pocket. 

You might need software development for a number of business functions, from

 to client or customer management and You might need software development for a number of business functions, from lease accounting to client or customer management and depending on design and interface, a business application can range from $50,000 to $250,000 dollars. Several factors affect the price of the business development applications. Let’s have a look at the different factors that influence the budget of the product:-

  • Features
  • Budgeting
  • Market-Fit
  • Creative Design
  • Development Plan
  • Execution Plan

Average Cost of Custom Software Development

Let us have a look at the different pricing models of budget business applications to suit your requirements. Are you looking for budget options or willing to splurge? We are here to cater to all levels of needs.

Type of Software

There are 3 types of software: enterprise, mid-market and small scale. The prices vary from model to model. So, it is essential first to ascertain the nature of the business we are running. And then move onto finding out the software we need.

Here is a chart containing the price range of the respective models:

ENTERPRISE SCALE $200,000 and $100,00,00,000
MID SCALE $45,000 to $ 60,00,000
SMALL SCALE $10,000 and $5,50,000


Working Hours

The pricing models differ from location to location. There is a wide wage gap between developed and developing countries. So, the varying prices are dependent on the location of the technology partner.

Large-scale business owners witness a spike in the overall development cost. That is because of the increase in the need for resources and time. According to reports, the global outsourcing of these services reached 135.5 billion dollars last year.

Team Size

You must be wondering how the size of the team influences the hourly rate equation? Well, every coding company hires professionals based on the size of your project. You must know that the size of your project determines the price. If the project is vast, then the cost will be on the higher side. Naturally, if the project is small-scale, the expense incurred will be less.

If you think of hiring in-house developers, be ready to pay a considerable amount (say approx. $ 1080000). Hiring and training experts for application development will cost a huge commitment of time, effort and money. In such cases, outsourcing is the go-to choice. However, make sure you analyze the nature of your project before making a call. Go to the Kandasoft website to learn more about software outsourcing.

Fixed-Price Cost Agreement 

It is a contract that covers the cost of custom software development per hour, payment schedule and project work statement. This agreement ensures transparency to evaluate the exact budget of building the application.

What is a Request for Proposal? How is it useful for estimation?

Request for Proposal, also known as RFPs. It is a business document excellent for estimating custom application development expenses. The request for proposal must contain all requirements you need for a custom application. Companies can practice posting extracts from the RFPs on open-source channels.

The reviews from vendors on that channel can help you make your decision. It’s a great strategy to help you build your application concretely. RFPs speed up your decision-making process and give you insight into choosing the right vendor.

This example will help you have a better idea about RFPs function:- There are two types of vendors in the market. The first type will charge less than the average rate. But eventually, turn out to have extra hidden charges the moment you opt for them. The second type will charge a higher amount but will not cut corners to fit into your budget. These vendors are more reliable. That is how RFPs will help you choose the right vendor and estimate the cost of software development.


Estimating the cost to build custom software is quite a task, but this article has covered most of your doubts. As stated earlier, do not forget to analyze the nature of your business and its requirements. And then make a call.

One thing that is clear while evaluating the price of an application is the role of developers. Be it in-house or offshore developers, experience is all that matters.

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