Any web application that you want to create will have the following costs:

• Resource development
• Operating costs
• Marketing costs (if it’s a multiplayer platform)

Let’s take a closer look at them.

Resource development

How companies calculate their development costs.

It’s important to be clear that when you contact a developer company you aren’t buying a product, but rather a service.

The invoice you receive is based on the amount of time the company’s employees spent to create that product.

Therefore, when contacting the developer, don’t just consider the bill for services, but also their evaluation criteria. How many people will be employed on the project?
What are the stages of project implementation?
What are the options for implementing your product?

Based on this, an account is formed. And depending on the company’s experience, there will be different stages of implementation. Accordingly, prices will vary.

Here we describe building an app from scratch.

The goal here is to create the MVP (Minimum Value Product). The MVP will be sufficient to get your product out there and get statistics on whether your idea works in the real marketplace.

Our experience can confirm that usually, 2 to 4 months of work is enough to create an MVP (for simple web applications).

Participants in this process:

• architect
• UI / UX designer
• 2-3 programmers
• tester
• project manager

Naturally, not all of them work on the product continuously — an architect and a UI / UX designer are needed in the initial stages and at the stage of expanding the functionality (1-2 weeks).
Programmers and a tester are needed at all stages.

Each person has their own hourly rate.
The average rate of one web development programmer in Ukraine ranges from $20 to $100 per hour, depending on the company’s experience and the complexity of the project.

Operating costs:

As the project develops and the number of users on the site increases, improvements will be needed. Therefore, it’s important to indicate the number of users that you are targeting so that the developer company gives you the optimal solution.
That said, in 2020, the growth issue isn’t quite as pressing. Cloud solutions from Google and Amazon services provide a scaling system that help you to grow without the usual technical problems. This is more expensive than using a personal server, but it solves the scalability issue and you don’t need to worry about hiring a developer for this stage of implementation.

To support the project, you’ll need to hire a developer at the same rate — from $20 to $100 per hour. This is necessary at the project launch stage. And, in case of success, the development of the project.

The cost for maintaining your resource on Google and Amazon servers is about $100 / month for simple projects and scales up based on the project’s complexity. Oftentimes, the development fits into the free service limits.

Marketing costs

To properly utilize your application, you have to be informed and know what your goals are. If your product is targeted at a large number of users, you need to understand at the start what advertising costs you’ll need.

This is something that doesn’t apply to the developer — the developer won’t be able to help you with marketing, but the success of your project depends on it.

Therefore, when contacting a developer company, start with the MVP (minimum value product). That will save you money. You will develop the project gradually. If successful, you can add additional functionality — the bells and whistles. But in case of failure, you won’t complete the project with higher development costs than necessary.

The best-suited continuous-development models are Agile and Scrum. We recommend reading about the differences between Scrum and Waterfall when developing Web products.

Summary

Based on the average employee pay rate, an MVP will cost you $15-25K.

For this kind of project, your operating costs for maintaining the server and supporting the system by a programmer (if the project is developing) will be $1-2.5K / month.

You can take over parts of the development process yourself — like project management or testing — to reduce your costs. However, you should be aware that doing it yourself may put quality at risk.