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Custom Software Cost, Budget, and Scope: FAQs

Custom Software FAQ1

I had the good fortune of spending a day with an inspiring group of women entrepreneurs last week talking about how to work with software developers.

They’re thinking about how to utilize technology to grow their businesses and they asked some terrific questions. This is part 1 in a series of posts answering some of their most pressing questions.

Let’s dig right in.

Should I come to a developer with a scope of work in hand?  If not, what should I bring? 

While it’s essential for you to have a comprehensive understanding of what you’re trying to accomplish with a software solution, it’s typically not necessary for you to have a detailed scope of work documented and ready to hand over to a developer.

Having a good handle on the following things will help the developer work with you to outline the scope of work and provide you with a quality solution that achieves your goals.

  • Problem/Opportunity – What problem are you trying to solve or what opportunity would you like to take advantage of?
  • Goals – What are you trying to achieve?
  • Features – What high-level features need to be included?
  • Expectations of the developer – Do you expect them to do exactly what you say (contractor) or to collaborate with you and guide you to the best solution (consultant)?
  • Budget – How much can you invest in, or how much value do you expect to realize from, the solution?
  • Timeline – Is there anything driving a specific timeline for delivery (e.g., a trade show or conference, seasonality, etc.)?
  • Priorities – What’s the most critical constraint—time, money, or scope?
  • Definition of success – What would a successful project look like?

Is there a way to cost out a project before going to a technology partner?  In other words, how do I know if something is going to cost $10k or $100k or more?  

There are various app development calculators available online, though I can’t testify to their accuracy. Because there are so many factors that can impact the cost of developing a custom software application, your best bet is to understand what the value of a solution is to your business and then seek out qualified development teams to give you estimates.

If you’re not sure what the value is, ask yourself these questions:

  • Is this a short-term or a long-term problem?
  • How much money will I save by solving this problem?
  • How much revenue will I generate by solving this problem?
  • Will investing in a custom solution create enough value to make it worthwhile?

Do I have to reveal my budget to a tech provider? Aren’t they just going to use that to make a project fit that amount?  

No, you don’t have to share your budget—most people don’t even know theirs at the beginning stages. That said, if you know your budget, there is real value in sharing it.

Being up-front about your budget is important because it demonstrates that you’ve thought through the value of a solution and have the funds to execute on it. You want your relationship with your developer to be based on mutual trust. Reputable developers will not take advantage of your honesty. They will use the information to craft the best solution they can within the given constraints.

On a more practical level, it may help you to know that developers generally don’t charge for the time they spend putting together new project proposals. So, if you have a budget of $20,000 for something that would clearly cost 5 or 10 times that, it doesn’t make good business sense for them to invest a significant amount of time to draft a proposal only to find out it exceeds your budget. On the flip-side, you don’t have to waste your time waiting on them for a proposal that won’t meet your needs. You can move on to your next option much more quickly.

Will developers use your whole budget? Yes, it’s very likely they will. However, that should be perfectly acceptable as long as they provide adequate value in doing so. Using your budget as wisely as possible is what you’re after. Prioritizing the development of features based on value, starting with the highest value first, will help ensure you get the most bang for your buck.

The wonderful world of software development is foreign terrain for many people, and it can be scary to think about spending tens of thousands of dollars (or more) on what feels like a hope and a prayer. It doesn’t have to be, though. Finding the right development partner is key. So, make sure to ask questions—lots of them.

Stay tuned. We’ll be back with another set of questions to help you understand what to expect when seeking out and working with software developers.

If you have questions you’d like us to address in this series, reach out and let us know.

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