“So, how much is this going to cost?”
If you are planning a new app, that is usually the first question. This guide to software development cost estimation will help you get to a number you can trust. For most custom apps, a realistic starting range is $75,000 to $500,000, depending on scope and risk.
That range is wide on purpose. The goal is not to guess a perfect number on day one. The goal is to understand what drives cost and how to budget with fewer surprises.
Why software is hard to price
Imagine we are meeting for coffee. You have a strong idea and you want to know what it takes to build it. Pricing a new product is not like buying a car with a sticker price.
It is more like building a custom home before the blueprints exist. You start with a vision, then you turn it into decisions, screens, rules, and edge cases. Each decision becomes real design, engineering, and testing work.
The problem with unknowns
Every software build has unknowns early on. That makes a precise quote tough without discovery. Even a “simple” feature like login turns into many questions.
- Should users sign in with email and password?
- Should you support Google or LinkedIn login?
- Do you need a “forgot password” flow?
- Do you need two-factor authentication?
Each choice adds work. Now multiply that by every feature in the product. That is why early pricing is an estimate, not a promise.
A useful estimate is not a single number in an email. It is a shared plan, with clear scope and priorities for a first launch.
Why one-size-fits-all models miss
Generic estimation models often miss because they are not tuned to the team doing the work. When models are used without calibration, error rates can be huge. Some studies report errors from 85% to 772% in the worst cases.
That level of risk is hard for any founder to accept. The safer path is a structured discovery process that turns assumptions into real requirements. The estimate improves as the scope becomes clearer.
How we estimate a project in the real world
Good estimates do not come from guessing. They come from experience, data, and a clear breakdown of what you are building. The best estimates are the result of a process, not the first step.
Early on, you get a ballpark range. After discovery, you can get a tighter number with a defined scope and timeline.
Common estimation methods (and when they work)
Different methods fit different stages. Here are the ones you will hear most often, plus what they mean for you as a founder.
| Method | What It Is (Analogy) | Best For | Pros | Cons |
|---|---|---|---|---|
| Analogous | “This looks like a project we built before.” | Fast ballparks in early conversations. | Quick and based on real projects. | Less precise if projects are not truly similar. |
| Parametric | “Based on data, features like this cost X.” | High-level planning with known patterns. | More consistent than pure comparison. | Can miss product-specific complexity. |
| Bottom-Up | Build the plan task by task. | Detailed proposals after scope is defined. | Most accurate when done well. | Takes time and requires clear requirements. |
| T-Shirt Sizing | “Is this feature Small, Medium, or Large?” | Early prioritization and scoping. | Fast and easy for non-technical teams. | Relative sizing only, not hours or dollars. |
| Story Points | A score for effort, risk, and complexity. | Agile work where scope can change. | Improves as team performance data grows. | Needs a stable team to be reliable. |
Early estimates are usually Analogous, Parametric, or T-shirt sizing. Once the scope is clear, Bottom-Up gives the best accuracy.
Getting an early ballpark
Most founders need an early range to plan funding, timing, or hiring. That is where broad methods help. They are not perfect, but they are useful.
Analogous estimation starts with a comparison. If a prior SaaS build had similar roles, dashboards, and billing, it becomes a reference point. Then you adjust up or down based on differences like data complexity, custom reporting, or security needs.
Parametric estimation uses internal benchmarks. For example, if a “standard complexity” feature typically takes a certain effort level, you can multiply by the number of features in your MVP. This helps with planning, even if it is not yet a final quote.
Bottom-Up estimation is the accuracy benchmark
Bottom-Up breaks the build into small tasks, then estimates each one. Examples include “create database schema for user profiles” or “design the forgot password modal.” It takes more upfront work, but it reduces surprises later.
Estimating in agile builds
Early-stage products change. New insights show up once users touch the product. Agile estimation is designed for that reality.
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T-shirt sizing: You group features into S, M, L, and XL. This helps you choose an MVP scope that fits your budget and timeline.
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Story points and velocity: Each task gets points based on effort and risk. Over a few sprints, the team’s average output becomes a forecast tool. If the backlog totals 100 points and the team completes 20 points per sprint, you can plan for about five sprints of work.
This approach gets stronger over time. You move from a guess to a forecast based on what the team has already delivered.
The key factors that drive development cost
It is easy to assume cost equals number of features. That is only part of it. Cost is usually driven by complexity, integrations, design detail, and the work needed to ship safely.
Two products can look similar on paper and cost very different amounts. The difference often sits in the details that are not obvious at first glance.
Feature complexity: small words, big work
Complexity is the biggest cost driver. It is less about what a feature is called and more about what it must handle. Edge cases and security needs add time fast.
- Simple login: email + password and a basic profile.
- Complex authentication: social login, 2FA, password recovery, magic links, account lockouts, and audit logs.
A basic profile page might take 15 to 20 hours. Add roles, permissions, and an activity feed, and it can jump to 80 to 100 hours or more.
Third-party integrations: every connection adds work
Most products connect to other services. Each integration needs setup, error handling, security review, and testing. Even “simple” API work can grow once you account for real-world failures.
Common integration examples include:
- Payments: subscriptions and checkout with Stripe.
- Analytics: event tracking and funnels.
- Messaging: SMS alerts and verification with Twilio.
A basic integration might add 20 to 30 hours. A deep two-way sync with complex data rules can add 100+ hours. If you want more context on early-stage budgeting, see how much an MVP development costs.
UI and UX polish: functional vs premium
Design is not just how it looks. It is how fast a user understands what to do next. Better UX often improves conversion and reduces support costs.
A clean, simple interface can be enough to launch. A premium look with animations and detailed states takes more design and front-end work.
Custom components, micro-interactions, accessibility, and responsive layouts all add time. A higher level of polish can add 25% to 50% to front-end effort, depending on the baseline.
Often-missed costs: PM, QA, and infrastructure
Some work is not a “feature,” but it is still part of the build. If it is missing, projects slow down and bugs slip into production.
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Project management: keeps scope, timeline, and communication clear.
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Quality assurance: testing during the build, not only at the end.
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Infrastructure and DevOps: hosting setup, deployment pipelines, monitoring, and security basics.
These roles often account for 20% to 30% of total cost. Cutting them can look cheaper upfront, then cost more after launch.
Fixed price vs time and materials contracts
After you get an estimate, the next step is the contract model. Most software projects use either Fixed Price or Time and Materials (T&M). Your choice affects flexibility, risk, and how changes are handled.
Fixed Price is easiest to understand. You agree on a defined scope and a defined cost. That works best when the requirements are stable and detailed.
T&M is based on actual effort. It works best when you expect to learn, adjust priorities, and ship in stages.
Fixed price: predictable, but strict
The upside is budget clarity. You know the total number at the start. For some projects, that is a real benefit.
The tradeoff is that scope must be locked early. To protect against unknowns, agencies often price in a buffer, sometimes 20% to 40%. Changes later can be slow and expensive because they require change orders.
Time and materials: flexible, but needs active management
With T&M, you pay for the team’s time. You can change priorities based on what you learn from users. That makes it a strong fit for MVPs and new products.
A good T&M setup still has guardrails. You should expect weekly reporting, a clear backlog, and a budget range. It should never feel like an open tab with no visibility.
T&M works best when both sides agree on priorities and review progress often. You stay in control by making scope decisions with real data.
Fixed price vs time and materials (T&M) at a glance
| Factor | Fixed Price | Time & Materials (T&M) |
|---|---|---|
| Budget | Known upfront, often includes a risk buffer. | Varies with effort, controlled through priorities and reporting. |
| Flexibility | Low, changes are slow and cost extra. | High, you can reorder work as you learn. |
| Risk | You must define the “right” scope early. | You carry budget risk, the team focuses on value delivered. |
| Best For | Small, well-defined work with few unknowns. | New products, MVPs, and iterative builds. |
Ask yourself one question. Are you building from a complete blueprint, or are you learning as you build? Most founders are learning, and the contract should match that.
Common pitfalls that wreck budgets
Most overruns are not caused by one big mistake. They come from small issues that stack up. The good news is that you can spot these early.
Scope creep: the slow drip
Scope creep happens when small “quick” requests slide into the plan without new estimates. It is rarely dramatic. It is usually a series of reasonable ideas.
- “Can we add an export to CSV?”
- “Can users customize the dashboard theme?”
- “Can we add social sharing here?”
Each item may be worth doing. The problem is doing them without tradeoffs. A better approach is to log new ideas, estimate them, then decide what replaces what.
Delayed decisions: you pay for waiting
Slow feedback can cost more than founders expect. When a team is blocked on a decision, momentum drops. People switch tasks, lose context, and mistakes increase.
A two-day delay does not always create a two-day delay. It can create rework, more meetings, and a longer ramp-up when work resumes.
This is where discovery helps. If decisions feel hard, it may mean the user problem is not yet clear. If you need support there, the guide on user research for founders can help you build confidence before you commit to build choices.
Forgetting post-launch costs
Launch day is not the finish line. After launch, you will fix bugs, patch security issues, and improve features based on real usage. You also pay for hosting and third-party tools.
Plan for these common post-launch needs:
- Maintenance: bug fixes, security patches, and framework updates.
- Hosting and services: cloud hosting and paid APIs.
- Marketing and user acquisition: getting your first users and learning what converts.
- Ongoing product work: improvements based on feedback and data.
A simple rule of thumb is to budget 15% to 20% of initial build cost each year for maintenance and infrastructure. Your needs may be higher if you ship often or handle sensitive data.
How to get a realistic estimate for your project
You do not need a 40-page document to start. You do need clarity on the problem, the user, and what “first version” means. The fastest way to get there is a one-page brief.
Your brief should explain who the product is for, what pain it solves, and what must be included in the MVP. Keep it simple. Clear beats long.
Three steps to get to a useful number
- Write a one-page brief: problem, target users, and must-have MVP features.
- Set a budget range: even a window like $50k to $100k helps shape the right solution.
- Schedule a discovery call: review the brief, confirm assumptions, and outline next steps.
A budget range is not a trap. It is context. It helps your build partner suggest the best version of the MVP you can afford.
A clear budget range filters out plans that will not fit, fast.
Structured estimation has been studied for decades. The classic COCOMO model, introduced in 1981, was an early attempt to translate requirements into cost and time. If you want the background, you can learn more about the COCOMO model findings.
What happens in a discovery call
- Review the brief: confirm the problem, users, and MVP goal.
- List unknowns: identify risks like data rules, security needs, or tricky integrations.
- Sketch a plan: rough phases, priorities, and a timeline range.
If you want a more structured input than a one-pager, use our product requirements document template. It helps you think through workflows and edge cases without overdoing it.
Your next steps
- Draft your one-page brief and list your must-haves.
- Pick a budget range you can support.
- Book a call and get a plan you can act on.
At Refact, we start with clarity and shared priorities. If you want help scoping your MVP and turning it into a realistic budget, book a call with us.
Frequently asked questions
How much does a typical MVP cost?
There is no single “typical” price. MVP cost depends on complexity and how many unknowns are still open. The goal is to test one core idea with real users, not build every feature at once.
A simple MVP with a few screens and basic workflows can land around $25,000 to $50,000. If you need complex roles, heavy integrations, or advanced logic, it can reach $75,000 to $150,000+.
Can I get a fixed price quote for my idea?
Yes, but fixed price works best when the scope is stable and detailed. New products rarely start that way. If you expect to change priorities after user feedback, fixed price can become costly through change orders.
For early-stage products, many founders prefer a T&M approach with clear reporting and a defined budget range. That keeps options open without losing control.
What is not included in a development estimate?
Most build estimates cover the work needed to ship the first version. That often includes product strategy, UI/UX design, engineering, project management, and QA.
Many estimates do not include ongoing operating costs. Budget separately for:
- Hosting: cloud fees to keep the app online.
- Paid APIs and tools: payments, messaging, analytics, and other services.
- Marketing and sales: the cost to get users and customers.
- Maintenance and support: bug fixes, updates, and post-launch improvements.
Always ask what is included and what is excluded. That single step prevents most surprises later.
Want a clear scope and a budget you can plan around? Book a call with Refact and we will walk through your idea and next steps.
