Software Development Costs Explained: What You'll Actually Pay

"How much does an app cost?" is like "How much does a car cost?" - the answer ranges from €5,000 to €5,000,000. But unlike buying a car, software often lacks transparent price tags.

In this guide, we give you an honest overview: What does software development actually cost, what factors influence the price, and where do hidden costs lurk?

Table of Contents

1. Quick Answer: Typical Price Ranges
2. The 7 Biggest Cost Factors
3. Costs by Project Type
4. Hourly Rates Compared
5. Hidden Costs Many Forget
6. Pricing Models: Fixed Price vs. Time & Material
7. How to Reduce Costs (Without Sacrificing Quality)
8. ROI: When Is the Investment Worth It?
9. Conclusion & Checklist

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Quick Answer: Typical Price Ranges

Here's a realistic assessment for the European market (as of 2025):

Project Type	Price Range	Typical Duration
Simple Website	€3,000-€15,000	2-6 weeks
Landing Page	€1,500-€5,000	1-2 weeks
MVP / Prototype	€15,000-€50,000	1-3 months
Web App (medium)	€50,000-€150,000	3-6 months
Mobile App (native)	€50,000-€200,000	3-8 months
Enterprise Software	€150,000-€500,000+	6-18 months
SaaS Platform	€100,000-€300,000	4-12 months

Important: These figures are guidelines. An experienced team in Munich costs more than freelancers from Eastern Europe - but often delivers faster and with less risk.

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The 7 Biggest Cost Factors

1. Requirements Complexity

The biggest cost driver. A simple CRUD app costs a tenth of an AI-powered analytics platform.

Examples of complexity levels:

Level	Example	Effort Factor
Simple	Contact form, static pages	1x
Medium	User login, database, admin panel	3-5x
Complex	Real-time data, integrations, roles	8-15x
Very complex	AI/ML, high load, multi-tenant	20-50x

2. Design Requirements

Design Level	Description	Cost
Template-based	Adapt ready theme	€500-€3,000
Custom Standard	Individual but simple	€3,000-€10,000
Premium Design	Brand-appropriate, thoughtful	€10,000-€30,000
Award-worthy	Animations, micro-interactions	€30,000-€80,000

3. Number of Platforms

Platform	Additional Cost
Web only	Baseline
+ Mobile (responsive)	+10-20%
+ Native iOS App	+50-80%
+ Native Android App	+50-80%
+ Desktop App	+40-60%

Tip: Cross-platform frameworks (React Native, Flutter) can cover iOS + Android for approximately +60-80% instead of +100-160%.

4. Integrations

Every interface to external systems increases effort and risk:

Integration	Typical Effort
Payment (Stripe, PayPal)	€2,000-€8,000
CRM (Salesforce, HubSpot)	€5,000-€20,000
ERP (SAP, Odoo)	€10,000-€50,000
Accounting (Xero, QuickBooks)	€3,000-€15,000
Shipping (DHL, FedEx)	€2,000-€8,000
Own legacy systems	€5,000-€30,000

5. Security Requirements

Level	Example	Premium
Standard	Internal blog	Baseline
Elevated	Customer data, GDPR	+10-20%
High	Financial data, healthcare	+20-40%
Regulated	Banks, insurance	+50-100%

6. Scalability Requirements

Expected Load	Architecture	Cost Impact
< 1,000 users	Simple server	Baseline
1,000-50,000 users	Scalable cloud	+20-40%
50,000-500,000 users	Microservices	+50-100%
500,000+ users	Enterprise architecture	+100-200%

7. Team Experience and Location

Team Type	Hourly Rate	Risk
Freelancer (Offshore)	€15-€40	High
Agency (Nearshore)	€40-€80	Medium
Agency (UK/Germany)	€80-€150	Low
Premium Agency	€120-€200	Very low
In-house Team	€60-€120 (all-in)	Variable

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Costs by Project Type

MVP / Minimum Viable Product

What is an MVP? The simplest version of your product to test the market.

Typical costs: €15,000-€50,000

Component	Effort	Cost
Discovery & Concept	2-3 days	€2,000-€4,000
UI/UX Design	1-2 weeks	€3,000-€8,000
Frontend Development	3-6 weeks	€6,000-€15,000
Backend Development	2-4 weeks	€4,000-€12,000
Testing & Launch	1 week	€2,000-€4,000

Our tip: Start with the absolute minimum. We've built MVPs for €20,000 that later became €500,000 products.

Web Application (medium complexity)

Examples: Customer portal, internal tool, SaaS base

Typical costs: €50,000-€150,000

Phase	Share	Cost
Conception & Architecture	10%	€5,000-€15,000
Design (UI/UX)	15%	€7,500-€22,500
Frontend	30%	€15,000-€45,000
Backend & API	25%	€12,500-€37,500
Integrations	10%	€5,000-€15,000
Testing & QA	10%	€5,000-€15,000

Mobile App (native)

Examples: Customer app, e-commerce app

Typical costs: €50,000-€200,000

Component	iOS	Android	Both
Design	€8,000-€20,000	€8,000-€20,000	€10,000-€25,000
Development	€30,000-€80,000	€30,000-€80,000	€50,000-€140,000
Backend	€15,000-€40,000	(shared)	€15,000-€40,000
Testing	€5,000-€15,000	€5,000-€15,000	€8,000-€25,000

Enterprise Solution

Examples: ERP extension, company-wide platform

Typical costs: €150,000-€500,000+

Phase	Duration	Cost
Requirements Analysis	4-8 weeks	€20,000-€50,000
Architecture & Concept	4-6 weeks	€25,000-€60,000
Design & Prototyping	6-10 weeks	€30,000-€80,000
Development	20-40 weeks	€100,000-€250,000
Integration & Migration	4-12 weeks	€25,000-€80,000
Testing & Rollout	4-8 weeks	€20,000-€50,000

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Hourly Rates Compared

By Region

Region	Hourly Rate	Quality (Average)
India	€15-€30	⭐⭐
Ukraine/Poland	€35-€60	⭐⭐⭐
Portugal/Spain	€50-€80	⭐⭐⭐⭐
UK/Germany	€80-€150	⭐⭐⭐⭐⭐
Switzerland	€120-€200	⭐⭐⭐⭐⭐

By Role

Role	Junior	Mid-Level	Senior
Developer	€60-€80	€80-€120	€120-€160
Designer	€50-€70	€70-€100	€100-€140
Project Manager	€70-€90	€90-€120	€120-€150
Architect	-	€100-€140	€140-€200

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Hidden Costs Many Forget

1. Ongoing Costs After Launch

Item	Monthly Cost
Hosting (Cloud)	€50-€2,000
Domains & SSL	€5-€50
Monitoring & Security	€50-€500
Support & Maintenance	€500-€5,000
Updates & Patches	€500-€3,000

Rule of thumb: Plan for 15-20% of development costs annually for maintenance.

2. Changes During Development

Every requirement change costs:

Timing	Cost Factor
During concept phase	1x
During design	2-3x
During development	5-10x
After launch	10-20x

3. Training and Onboarding

Measure	Cost
Admin training	€500-€2,000
User documentation	€1,000-€5,000
Video tutorials	€2,000-€8,000
Train-the-trainer	€3,000-€10,000

4. Data Migration

When switching from a legacy system:

Complexity	Cost
Simple (CSV import)	€1,000-€3,000
Medium (Mapping needed)	€5,000-€15,000
Complex (Transformation)	€15,000-€50,000

5. Licenses and Third-Party Costs

Service	Cost/Month
Auth0 / Firebase Auth	€0-€500
Algolia (Search)	€0-€1,000
SendGrid (Email)	€15-€500
Twilio (SMS)	€50-€500
Maps API	€0-€2,000

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Pricing Models: Fixed Price vs. Time & Material

Fixed Price

How it works: Scope is defined, price is fixed.

Advantages:

• Planning security
• Clear expectations
• No cost risk

Disadvantages:

• Changes expensive
• Risk premium included (20-40%)
• Less flexibility

Suitable for:

• Clearly defined projects
• Small to medium projects
• Clients with fixed budgets

Time & Material (T&M)

How it works: Billing based on actual effort.

Advantages:

• Flexibility for changes
• No risk premium
• Pay only what you need

Disadvantages:

• Budget can be exceeded
• Requires close monitoring
• Trust relationship needed

Suitable for:

• Complex projects
• Agile development
• Long-term collaboration

Hybrid Model (our recommendation)

• Phase 1 (Discovery): Fixed price for concept
• Phase 2 (MVP): Fixed price with defined scope
• Phase 3 (Evolution): T&M with monthly budget cap

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How to Reduce Costs (Without Sacrificing Quality)

1. Brutally Prioritize Scope

The MoSCoW Method:

• Must have: Cannot work without it
• Should have: Important but not critical
• Could have: Nice-to-have
• Won't have: Consciously omit

Our tip: Start with 50% of what you think is necessary. You probably won't need the other half.

2. Use Existing Solutions

Custom Build	Alternative	Savings
Login system	Auth0, Supabase	€5,000-€15,000
Payment	Stripe, Mollie	€3,000-€10,000
CMS	Strapi, Sanity	€10,000-€30,000
Email system	SendGrid, Mailjet	€2,000-€8,000

3. Develop in Phases

Instead of: €150,000 for everything at once

Better:

1. MVP: €30,000 → Learn
2. V2: €40,000 → Optimize
3. V3: €50,000 → Scale

4. Choose the Right Partner

Not the cheapest, but the most efficient.

A €150/h team that delivers in 200 hours (€30,000) is cheaper than a €50/h team that needs 800 hours (€40,000) - and you save 6 months of time.

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ROI: When Is the Investment Worth It?

Typical ROI Scenarios

Scenario 1: Process Automation

• Investment: €50,000
• Savings: 2 FTE at €60,000/year = €120,000/year
• ROI: 5 months

Scenario 2: Customer Portal

• Investment: €80,000
• Support request reduction: 40%
• Savings: €50,000/year
• ROI: 19 months

Scenario 3: E-Commerce Optimization

• Investment: €30,000
• Conversion increase: 15%
• Additional revenue: €200,000/year
• ROI: 2 months

Break-Even Calculator

Simple formula:

Break-Even (months) = Investment / (Monthly Benefit)

Example:

• Investment: €100,000
• Savings: €8,000/month
• Break-Even: 12.5 months

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Conclusion & Checklist

Key Takeaways

1. Software development costs €15,000-€500,000+ - depending on complexity
2. The biggest cost drivers are complexity, platforms, and integrations
3. Hidden costs (maintenance, changes, training) often double initial costs
4. The cheapest provider is rarely the most economical
5. Phased development reduces risk and total costs

Checklist Before Commissioning

• Requirements clearly defined (in writing)
• Must-haves vs. nice-to-haves separated
• Budget for maintenance planned (15-20%/year)
• Provider references checked
• Pricing model understood
• Code ownership rights clarified
• Exit strategy considered

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Next Steps

Planning a software project and want a realistic estimate?

At Balane Tech, we give you an initial assessment of effort and costs in a free 30-minute call - no obligations and no sales pitch. Get in touch.