How Much Would It Take To Create a Mobile App
For A SAAS Application?
SaaS applications have transformed the software industry over the past decade. It has fostered a culture of startups that can build a product on a shoestring budget. This article examines how much it costs to build a SaaS application, including factors such as complexity, development stages, solution type, team type, and geographic location.
Are you a founder or co-founder of a SaaS product? Or are you a serial entrepreneur with an amazing startup idea? Then, block a few minutes from your busy schedule as we dive deep into the ocean of calculating the cost of building a SaaS application. It revolves around various topics like this
- The cost of developing a SaaS application depends on various factors
- Factors that affect the cost of building a SaaS platform
- The Hidden Cost of SaaS Application Development
- Ways to reduce SaaS software development costs
- Examples of popular SaaS companies and their development costs
Software as a service, also known as SaaS is a cloud-based software that offers available ready-made handy software to the customers through a mobile app or web browser. Today, there is a lot of demand for top-class saas development services. So, if you’re planning to enter this fierce competition of SaaS providers, this guide will help you prepare and practice effective budgeting to remain profitable.
How much does it cost to build a SaaS platform?
The SaaS development cost for a minimum viable product (MVP) lies somewhere between $50,000-$150,000. However, various factors contribute to these numbers:
- Complexity
- Development stages
- Type of solution
- Type of team
- Geographical location
Let’s analyze them in detail.
As per complexity
Complexity can be a combination of different functions, user roles and relationships, or the level of difficulty faced by developers. While building a SaaS application, factors like scalability, high-level data security, access control, payment integration, and customization can affect the process and its timeline.
Also, with security threats and vulnerabilities on the rise, data security is an important aspect that you cannot afford to ignore. Hiring an expert in information security who knows how to properly manage data by application is a time-consuming process that significantly limits costs that require continuous monitoring.
SaaS products for healthcare industries have complex functions and multiple integrations, while a basic productivity application may have basic features. However, there are some SaaS products for one purpose, but their functions are more complex.
So, complexity is a relative term that you can’t exactly define. However, you can say that more complexity means more developing hours, which leads to higher costs. Based on those assumptions, we can divide SaaS applications into four categories:
Complexity Average Price (Apporx.)
Micro SaaS $10,000-$15,000
Basic SaaS $30,000-$35,000
Average SaaS $50,000-$60,000
Complex SaaS $140,000-$150,000
According to developmental stages
When you determine the total cost of ownership of a SaaS product, you need to consider the various software development stages it goes through. Each phase has a time and cost associated with it, which contributes to the final cost calculation. So, let’s analyze each phase separately.
Complexity Hours Required Total Cost (Approx.)
Validation and Planning 30-200 $30,000-$75,000 (MVP)
MVP Creation 250-300 $30,000-$70,000 (MVP)
UI/UX Design 100-220 $3000-$5500 (MVP)
Front-End 350-550 $10,000-$30,000
Back-End 650-850 $16,000-$56,000
Validation and planning
Start by clearly understanding what you want to achieve with your product’s value proposition. Then, gather information about customer feedback to help validate the idea. It allows you to define a roadmap for SaaS application development. Opting for full-scale product development can be risky and expensive. Instead, you can focus on building a SaaS MVP that requires minimal feature development, relatively low cost, and validation of your idea. You can estimate between $30,000-$75,000.
UI/UX
UI/UX is one of the essential stages of SaaS product development because it determines how your product’s interface will look and what kind of user experience it can provide. This is the first point of contact your audience will have. Generally, it takes two to three weeks to create a good UI and UX design, with an average UI/UX design hourly rate ranging from $25-$45, the cost is approximately $3000-$5500.
Front-end
Before starting front-end development, SaaS vendors need to determine the technology stack based on their core features. Now, the question is, why should you prioritize the front-end? Here’s why: It only takes 50 milliseconds for users to form an opinion about your app, and most users will reject your application after that.
Creating a front-end is more than creating a stunning design; Primary tasks include reducing resources, optimizing images, reducing server calls, removing custom nodes, compressing files, using caching and lazy loading. They contribute to a good user experience that requires expertise. Front-end developer hiring options include an in-house development team, freelancers, or an outsourcing agency. It can take about 10-12 weeks to build a robust front-end, and the average developer rate is $25-$75 per hour, with costs ranging from $10,000-$30,000.
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Back-end
Developers are required to create everything from scratch according to the functionality of the app. However, you can save some money by taking help of back-end APIs available for standard features. Back-end development mainly includes file management, push notifications, export, search, and the basics of data structure and security. These take about 20-25 weeks, and the average developer rate ranges from $20-$70, with costs ranging from $16,000-$56,000.
As per the type of SaaS solution
To know the cost of building SaaS products, you first need to know the type it belongs to, as the price varies accordingly. Some SaaS products require a lot of effort, while others have basic features that developers can build within a limited time frame.
So, according to the type of SaaS solutions, the cost calculations are as listed below:
Type of SaaS Solution Price of MVP (Approx.) Example
Accounting $70,000-$80,000 Quickbooks
CRM $50,000-$60,000 Freshworks
Email Marketing $60,000-$70,000 Mailchimp
ERP $110,000-$120,000 NetSuite
Martech $90,000-$100,000 HubSpot
Project Management $60,000-$70,000 Confluence
Visual Website Builder $140,000-$150,000 Weblium
As per the type of team
The type of team you opt for significantly influences the final cost of your SaaS application. For example, hiring a local agency can prove costly for SaaS startups if you’re living in the UK, which is a massive economy. However, you can outsource and reach out to the developer’s team in South Asia, where charges are lower. Moreover, SaaS startups are often on a tight budget, so hiring in-house isn’t feasible., Alternatively, you can hire freelancers with expertise in specific areas such as design, development, operations, etc., and save costs. The cost of developing a SaaS application varies based on these options:
Type of Team Average Price (Apporx.)
In-House $130,000-$140,000
Local Agency $170,000-$180,000
Freelancers $40,000-$50,000
Outsourcing Agency $70,000-$80,000
As per the geographical region
The country where the development team resides plays a massive role in deciding the overall cost of SaaS application development. However, the price varies across regions and continents significantly. For example, the cost in the United States may vary from that of the UK or Canada. So, let’s look at the breakdown of development rate per various geographical regions:
Geographical Region Average Price (Apporx.)
USA $170,000-$180,000
UK $140,000-$150,000
Eastern Europe $50,000-$60,000
Western Europe $90,000-$100,000
Australia $110,000-$120,000
South Asia $40,000-$50,000
Key Factors Affecting the Cost of SaaS Application
Business logic
It covers processes related to the overall operation of the SaaS application. It contains the purpose of the application and the expected effect of solving the demands of the target audience. Finally, this is the basis on which you decide the features and functions of the product.
Includes business logic
- Technology layer of the front-end and back-end
- The complexity of the SaaS solution
- Number of team members
- Number of outer coordinates
- Application size
The SaaS pricing calculator will display a specific amount based on the choices you make for all of these components.
Application framework
The architecture of SaaS involves the arrangement and interaction between various entities according to business and technical requirements. Some significant attributes of architecture that affect cost calculations
- Number of API integrations
- measurement
- Multiple leases and more.
So, the more complex your idea is, the more effort engineers need to build the integration, leading to higher prices for SaaS products.
Scope of the SaaS product
Project scope is one of the first things you need to decide. Next, you need to decide whether your SaaS application is a platform or a tool, as the functionality and following features will change accordingly. Finally, the time required to develop a tool or platform also varies, which affects how much SaaS implementation costs should be.
While the tools have a limited scope and manage critical functions, the platform has a broader scope; A proper implementation of a function here can serve multiple purposes. So, while Google Workforce is an example of a SaaS platform, Buffer is a suitable example of a SaaS tool. So, depending on the purpose of your application, the features will vary, and the time, effort, and cost will vary.
Features
To determine the cost of SaaS products, you need to list the components involved. The type of features a particular product offers determines the time and cost of a SaaS product. At the beginning of a project, you focus on key features when creating an MVP. Then, once you get customer validation, you can build a full-scale product. So, in both these levels, the price varies depending on the number, type, and complexity of the features.
Here is a list of features that any SaaS application should have:
- User permissions and role-based access management
- Security
- Communication
- Analytical tools
- Billing and Account Management
Platform
Just like any other application, you can decide on a platform for SaaS. For example, a B2B company needs to develop a web application because most customers use desktops or laptops. Conversely, B2C companies are more likely to opt for mobile apps as customers expect to access the product through smartphones. While the content is more or less the same, the UI/UX changes, which affects the cost of the SaaS product.
Post-release cost
Many believe that after the development of a SaaS product is complete, that is the end of the story and there will be no further tasks. However, that is not true. After the development phase, there are post-launch costs related to development, hosting services, maintenance servers, databases and integrations. Therefore, Total Cost of Ownership (TCO) depends on these factors and others mentioned above.
In addition to these factors, there are some hidden costs that you should keep in mind. We will explore them in the next section.
What are the hidden costs of SaaS application development?
Want a better idea of how to price software as a service? Then, it is very important to know the hidden costs. These overhead costs may not be immediately apparent to you as a startup founder, but they are necessary for your app to exist and remain relevant to the target market in the long run.
Maintenance
Generally, people forget to consider maintenance activities in cost calculations, but they take up 1/4 of your total cost. From hosting services, domain names, SSL certificates, email services, cloud services, etc., the list is exhaustive. These are essential tasks to get your platform up and running. Real-world components of aging software and hardware include a variety of factors, such as new engineers, engineering turnover, and the external environment and software-end features of program architecture. Cost is not easy.
Also, maintenance – predictive, corrective, adaptive or preventive. Therefore, it is safe to perform maintenance like handling a separate software development cost and requires experts from operations and production, which are difficult to find as experienced campaigners are needed, leading to high costs.
Marketing
A marketing team is essential for a startup business as it helps in attracting users and gaining visibility in the target market. Generally, marketing costs are two to three times higher than development costs. These include SEO, email marketing, product hunting, social media marketing, PR, content marketing, etc. If you look at successful SaaS products, they have one thing in common – a good and targeted marketing strategy.
Without promoting your products in front of the target audience, it is difficult to succeed today when technology is constantly evolving. Hundreds of new SaaS applications are coming to the market every day, and to stand out, you need to constantly be in front of the audience and show everyone your USPs. Marketing is an investment and not a hidden cost as it helps you gain visibility, conversion, reach and more revenue and ROI.
Legal Compliances
Compliance with federal and state laws is critical for any SaaS product. Whether you are developing financial, healthcare, banking and financial or any other applications, you need to comply with standard standards like HIPPA, PCI-DCS, GDPR and you have to pay a lot for that.
Updates
Since most SaaS products use cloud storage, you need to keep your enterprise software updated regularly to avoid security or user experience issues that could be vulnerable to threats. Also, new features should be added as the user base grows to keep the retention rate high. All of these tasks have time and cost associated with them.
Customer support
Once you have launched the product in the market, the next step is to set up a customer support portal. It helps to resolve customer queries and ultimately choose the best plan that customers will pay for. However, setting up a new board requires additional expenses.
Actionable ways to reduce SaaS software development costs
Automation
Generally, software testing or quality assurance activities account for 1/3 of the total development time. So, if you plan to manually test your SaaS product, it will take a lot of time and you will be forced to spend a lot. However, if you opt for test automation, it reduces the number of repetitive tasks and thus requires less effort, which helps reduce development costs significantly.
Third-Party Services
There are many features or functions that you can leverage third-party APIs like payment processing, login, subscription management, etc. Instead of writing new code for these features, use third-party services. This will help reduce a good portion of your total cost.
Flexibility with hosting
Hosting is a necessary component of your SaaS platform and consumes a lot of resources. However, you can make a wise choice by choosing a hosting provider with plans that are flexible and customizable to suit your needs. This will reduce the wastage of unnecessary services.
Outsourcing
Startups are constrained by their limited budgets and resources. In these situations, outsourcing can be a boon for startup founders as it allows them to build their apps at a lower cost where developer prices are cheaper than in their local markets.
Final calculations
After learning the factors that change pricing and opportunities to reduce costs, let’s do some final calculations. Please note that these price ranges are approximate. To get more accurate numbers, you should consult with the development team you work with. They will consider the type of your SaaS product, any features you want to include, stages of design and development, and other specifications.
Looking to build your SaaS application?
There is no doubt that building SaaS applications require a lot of effort, innovative thinking, and expertise, and you need an experienced campaigner to handle the various challenges. So, if you’re looking to build a SaaS application, look no further. At Smarteer, we have best-in-class developers and professionals to help design customized solutions. Contact our team offering multiple SaaS models to hire dedicated developers.
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