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How To Save On A Development Budget


6 minutes read

Custom software is well known for its “never done” thing – you can always add more features, implement a few more ideas and throw away mint of money. How to save on a development budget and deliver the planned valuable product?

How to estimate a budget for your web app or any other idea?

Some companies don’t plan a particular budget at all and keep throwing money for unnecessary features, others allocate less than their project need and miss a lot of opportunities.

At ASD team, we use the term “smart budget”. What is it? This is the budget that provides you with enough funds to deliver a product able to pay for itself as fast as possible.

Here’s a quick practical guide on how to save on a development budget and deliver a valuable product at once:

Step 1. Visit your business / IT consulter: this helps to get some clues on how to save on a development budget.

This simple step may not be obvious for everyone, but it’s essential in the very beginning of your path.

Why you want to seek advice from your IT or business consulter:

  1. He/she will help you to develop your idea and before making a global plan of saving the world with your app you’ll start with planning an MVP.
  2. Your consulter will give you a clue how to avoid reinventing the wheel and save on integrating and using already existing solutions.
  3. In case you consult your IT partner you’ll have an opportunity to start developing your Development & Implementation Plan.

In case you consult your IT partner you’ll have an opportunity to start developing your Development & Implementation Plan.

He shared with me a few basic issues this app’s supposed to solve and the main was AUTOMATION.

His web app will allow not only to choose the best provider, but also automate the process of applying to an account or getting an insurance quote in one click, and so on – he had a really long list of features and needs to be covered.

As his IT consulter, I helped our client to pick up the set of features for MVP and prioritize them. Now we’re on Phase 1 of development and will release in a month.

If you need help with planning your project and budgeting, we can help.

Step 2. Build a vision of how to validate your product.

Validating your idea is an essential step before diving in developing a fully-featured app.

How to validate your idea and product?

  • Create a minimum features list that add value to your app (it’s so-called MVP).
  • Research the market demand for your future app. Typically you’ll know this when your users will start using your web app. So, yes, you want to build an MVP first.
  • Receive first feedback from early adopters, then add more platforms/features. These insights might be surprising, and you’ll get the direction to move on or stop and revise the idea of making an app with features nobody wants.

Step 3. Create clear RFP (Request For Proposal).

Before starting to search for someone to code your web app prepare a Request For Proposal. This is a common practice in IT business.

Actually, RFP is the process from planning to project delivery. But it’s a good idea to start with RFP document which usually includes:

  • consistent info for future technology partners,
  • the ballpark figures of costs for development,
  • deadlines,
  • business needs,
  • other basic requirements.

Let’s review the most important points from this list.

  1. Let’s review the most important points from this list.
    • Concept – describe your project Big Idea.
    • Business Case – add a case with financial info pitching your project.
    • Research – this can be both market and feasibility research data section.
    • Functional Requirements – e.g. User Stories.
    • Non-functional Requirements – e.g. appearance, reliability, usability, etc.
    • Prioritization – which features will be implemented first, and which will go to the backlog.
  2. Project Development
    • Purpose and Background – explain business needs.
    • Scope of Work – describe what needs to be done on Phase 1.
    • Deliverables – list the expected deliverables, like algorithms, quality control, etc.
    • Estimated Timing and Budget.

Step 4. Choose your technology partner: no need to build an in-house team for your app.

The next step on saving development costs is finding the outsourcing technology partner, that understands your requirements and have enough expertise to deliver your app, rather than hiring the entire in-house team from scratch.

Remember, the most important on this stage is to get your web app into your customers’ hands. Outsourcing the design and development processes will save you both on the cost of hiring a team and a lot of time, therefore.

Here’s your motto for Phase 1: “Build less, release sooner!”

Step 5. Secure more funds than your tech partner estimates.

The fact about custom software development – it’s never done. There will always be more features to add or platforms to extend. So, the amount of ideas usually exceeds the allocated budget.

In the process of development, your team may uncover previously unknown complexity that can add cost to a project.

And it’s wise to allocate 150% of the ballpark estimates from your technology partner and be sure that you avoid being undercapitalized. It’s not necessary to spend all 150%, but protect yourself from the unknown risks.

Step 6. Set fixed budgets for each Phase of the project.

Work with your software developers’ team and set a fixed budget for Phase 1 (or MVP).

This will keep both you and coders focused on prioritized features and build your first release faster. Remember – “Build less, release sooner!” Still works.

After releasing an MVP you’ll start receiving first feedback from your users and you’ll still have budget left for bug fixes and further updates.

Step 7. Review SOW after project start.

Scope of Work or SOW is a real document with tasks to be done within your project. It usually includes:

  • Project Description
  • Business requirements
  • Technical requirements
  • Schedule or Milestones
  • Estimated Budget
  • Payments Schedule

Step 8. Watch project milestones and check-ins.

Every customer imagines a perfect picture: he/she explains all the needs and requirements to the team and ‘ta-da!’ receives a ready-made product in a few weeks.

The reality differs a bit. You should regularly take part in meetings with your team, watch milestones and deadlines by constantly checking in

Here’s a common milestone breaking down:

  • Dates
  • Percent of completion
  • Deliverables completed
  • Payment schedule


Summing up this 8-Step Guide on how to save on a development budget, I’ll show you how we estimate a project budget in ASD team:

  1. We use several estimation methods, consider your project from many angles and identify risks (both known and unknown).
  2. Then we present you a budget range in terms of time and a team of developers / designers and other involved team members.
  3. After this we’ll help you to evaluate different options and choose the “smart budget” for your Phase 1 product or MVP.

If you love numbers more than words, here’s a brief stats of custom software development costs:

  • Low price: $5,000 – $20,000
  • Medium price: $20,000 – $50,000
  • Average price: $50,000 – $150,000
  • High price: $150,000 – $500,000
  • Unique price: $500,000 – $unlimited
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