Launching a startup is a tricky business, especially for a greenhorn. But if you have succeeded in having a clear picture of what it is you’re putting out, then this post is for you; it will be a simple guide on costs evaluation and how to avoid incurring debt while ending up with a bad product still.
These questions will help you:
What should my budget look like? Trust me, you need one.
How much does software companies charge? Can I afford it?
What is the cost of development and marketing?
How long to monetize the Product?
The answer to these questions is that there’s really no answer and until you actually get started, you can never be sure.
Firstly, ask yourself how huge are the abilities you want for product? Do you want a Jiji or an Amazon, a 2go or a Whatsapp? Answering this simple question will clear certain doubts regarding Time of creation and eventual Costs.
An App, depending on its ability, can require approximately between 200hours to over 1000hours and this does not include Backend, software testing and project management which consume similar if not more number of hours. Apparently, it goes without saying that a product which uses encrypted securities, large volumes data and storage, multiple screen, location-based systems like Facebook will require more time and cost more than a Product with simple graphics, basic CRUD(create, read, update, delete) and other basic tools.
You wonder why charges are per hour and not just days or month, because saying 40days is easier than 1000hours. This is because Programmers work round the clock and Software companies that hire them pay per hour too.
Across Europe and in Australia, you should get an average hourly rate of between $25 and $80.
The United States, in its Silicon Valley glory takes the rate up to a staggering $130 per hour or more. But you can get still lesser rates at Central Asia, South America and Africa- as low as $15- because these areas does not have the reputation of Europe and the USA just yet. But Nigeria is apparently catching up evident by Mark Zukerberg’s recent visit to the country.
You can get the rates lower still by using freelancers; like the friend who swore he’s the next Jobs. The only problem with this is you’d need at least three of such friends; a designer, a developer and QA engineer. But do you really want to trust individuals with a full-cycle project that is expected to last forever? I don’t think so.
By now, you should be having an estimate money and time somewhere in your mind but don’t be in such haste. These time and costs are just estimates. The first meeting with your software developers, studying your Product together, will make a more precise estimate.
And because this is the first time you are doing this, you might be tempted to go with the team or company that offers the cheapest rate and this is quite understandable. But be careful not to get a bad product which means starting over all over again and incurring double expenses. Remember, it’s even easier and cheaper to create a new app than to correct a faulty one. Tracing the error alone can consume all the hours you paid for. Pray the Language used in not C else, you are so dead.
You should be conscious of cost however, but in this business, expertise is everything. Go with the best team of developers.
They will help you break up your budget so that cost can be flexible and money is injected as product develops. A budget of say $100,000 can be broken down into as low as $4,000 at the initial stages and money injected slowly at the middle and final stages so that you are not burdened with the total money at once. They can even just create a simple product for you and design it in such a flexible way that it can accommodate changes later after you might have started making money from the product, so that money made can be used to finance these new and bigger features. They will also help with maintenance and support services after product launch. And also tweaks and updates based on user feedback to maximize experience and sustain interest.
All these things should be considered carefully when ready to launch your product so you don’t end up with another Hi5 on your hands.