It took four months, three presentations and dozens of emails and phone calls, but you’ve finally gained approval to move forward on a new mobile app for your company. You thought the next step would be simple: pick your developer and get a firm price quote. But now that you’ve received those quotes, you’re a bit perplexed because the prices vary dramatically and there are more variables than constants.
In short, you’re no closer to knowing precisely how much you should request in terms of a mobile app development budget. Since these developers are using three different pricing methods, it’s tough to determine which quote represents the most value for your dollar. There are a number of factors considered when a developer provides a price quote, including the app’s size and complexity.
On top of this, there are several pricing models developers can utilize. While these different models allow for greater flexibility in accommodating a client’s budget, they can also make for a challenging quote comparison process. Let’s discuss the options so you can compare prices with confidence.
What are the Different App Pricing Models?
Here are a few of the app development pricing models you may encounter:
- Pay by the Hour: In this case, you pay by the hour based on the actual amount of time it takes to build your app (as opposed to being charged for the projected hours). You may certainly implement a cap on the number of hours, although you risk your hour allotment running out before development is complete. Scope creep can drive your costs up significantly when using the ‘pay by the hour’ model.
- Pay by the Project: With this pricing model, you pay by the project, which is defined by precise specifications. The developer determines the fee based on factors such as the mobile app’s complexity and the projected number of hours required to build and test the application. If the actual development scope exceeds the original specs, you incur additional fees. This scenario is riskier for the developer, as there’s a chance the devs could encounter a setback that results in a greater-than-expected time expenditure (which means the client would win out, paying a bit less than what they would have spent with an hourly rate). In other cases, you could pay a bit more than if you paid by the hour, but this is rare.
- Pay by the Project, Up to X Hours of Work: This pricing model is a blend of “pay by the hour” and “pay by the project.” You’ll get a price quote based on the project scope, which includes up to X number of man hours. If the project exceeds that cap, then you would have to pay an additional hourly fee. This gives the client a good idea of the likely cost, but there is room for overage, which reduces some of the risk for the developer.
- Pay by the Phase: For larger development projects, it’s common to take a multi-phase approach, which can span many months or even upwards of a couple years. In such situations, you would likely use a method similar to the “pay by the project” strategy, except you’ll pay installments as certain milestones are achieved.
It’s customary for clients to pay an up-front deposit when beginning an app build, with the amount or percentage varying according to the scope, nature and anticipated timeframe. Such up-front payments are common whenever you’re dealing with a customized project, as the service provider usually can’t repurpose or otherwise recoup their losses if a client suddenly decides they no longer wish to proceed. Deposits and up-front payments are designed to guard against losses in these types of situations, ultimately lowering development costs across the board (otherwise, companies would be forced to raise prices to recoup lost revenue).
If you’re getting ready to hire a developer, you’ll want to think about which of these models makes the most sense for your unique project.
Beginning the Mobile App Development Process
At SevenTablets, we leverage our open source STAX platform, which allows us to reduce development cost and timeframe by as much as 30 to 40 percent. STAX includes pre-built components, in addition to featuring military grade encryption for added peace of mind.
If you’re ready to develop a new mobile app or need help refining, updating or expanding an existing application, turn to the experts at SevenTablets. Serving clients in Dallas, Houston, Austin and nationwide, our team deals with all aspects of app development, ranging from predictive analytics to testing, creative UI/UX services and beyond. Contact us today to discuss your project.