Individuals or companies often estimate the cost of developing Software. The constraints most clients face in Project work are “Can I afford it?” and “Can it still be completed on time?” These are the two most important questions that every sales meeting about Software development revolves around. Customers often don’t know the factors that impact software development costs. Software development costs are not always easy to estimate.

This article will explain what factors go into estimating the effort and cost of developing Software. These points will assist you in understanding the differences between action and timeline and the elements used to create an estimate. Next, we’ll discuss specific Projects that have pricing estimates.


Each engagement is different, and no single formula works for every situation. We have been working with companies for more than a decade. We are happy to share some guidelines to help you estimate Project costs. We have identified 3 key components that have the greatest impact on Project cost and timeframe. 

How much will Software development cost? 

People looking at the cost of developing Software often ask the first question: “How long does it take? How much do I have to pay?” However, this answer depends on how much effort is required.

Answering the question, “How Much effort?” We need to distinguish between effort and time. Time refers to the time it takes to complete a task. Step measures how many hours are required to complete a Project.

If 5 engineers work on the same Project, it is possible to put in 40 hours in just 8 hours. If we could not dedicate an engineer to the Project, it might take us 40 hours to accomplish the same amount. Suppose we run into issues external to the Project, such as a client refusing access to a server or waiting for credentials approval for over a week. Both cases require 40 hours of engineering time, but the timelines can differ.

When you receive a quote for a Project, ensure that it includes both time and effort. Is it 3 weeks to complete a task or 3 weeks? Let’s now see how we can determine the effort required to complete a Project. If the reports from the industry are any indication, inadequate management of expectations has resulted in the demise of 47 percent of Projects.

Why is the cost of developing Software so high?

Pricing is based on how hard it takes to get the desired result. i.e., How many engineers will be needed to complete the task, and how many hours per day?

After estimating how hard a Project will take, it is time to think about what other circumstances may arise. These circumstances can include the following:

● Client’s ability to assign staff to the Project team to perform requirements analysis, design checks, and user testing

● How do you get system or database access? Is it a quick call to the DBA, or does it require committee approval?

● It is so easy to make firewall changes

● What is needed to approve a cloud-based solution?

● What is the deployment procedure?

● How much will Software development cost

● Is developing Software expensive? 

● How much should a Software developer charge?

These issues can magnify the differences between effort and time frame. The longer the timeline is, the more effort it takes to manage the Project.

In 2022, I.T. expenditure on enterprise Software is anticipated to amount to approximately 675 billion U.S. dollars globally, a growth of 11 percent compared to the previous year.

We now know the difference between effort and timeline. Let’s examine the three factors that help us to determine our expected effort and Software cost.

Three Key Factors in Software product development Costing

Let’s look at 3 major factors that affect pricing/Software development efforts:

1. Type of Software Project

2. Software Project Size

3. Size of the Development Team  

  1. Type of Software Project

At a high level, you can break down most Software development engagements into these types:

New Software Design – new Software that involves custom development.

Software Modification – Enhancement of existing Software.

Software integration  Custom code to integrate Software into other processes. This aspect could include plugins for packages such as Office and data manipulation between Netsuite‘s inventory system and Quickbooks.

Web Development  custom web-based Software development

Each Project requires a different development effort and team composition. The first step to estimating a project’s cost is understanding its type. This information, the Project’s size, and the team will determine the final cost estimate.

2. Software Project Size

Next, determine the Project’s size. It cannot be easy to decide on the size of a Project. Although there is a strong correlation between Project complexity and size, this is not always true. The following are the most common categories for Project sizes:

Time Estimates Based on Project Types and Sizes – “How Long?”

Once Project types and sizes have been defined, you can combine them to create the following time frames:

This grid is a great starting point for estimating a Project’s duration. Now Sales and Delivery can give clients a quick estimate of the time it will take to complete a task. Hire the best Software developer.

3. Development Team Size (per Project)

The next step is calculating the team size after defining the Project. Each Project needs at least three roles: a Project Manager and a Developer. This aspect does not necessarily mean that each part is equal to one resource. You can have multiple functions from the same resource.

A Developer could also be a Tester on a small Project. The role of Business Analyst may be filled by the Project Manager in a medium-sized Project. If the Project is large and difficult, team resources can only play one role.

These structural roles may appear in rough estimates of team size:

How much will Software development cost? 

The easiest way to estimate the Project cost is Project resource cost x Project time = Project Cost.

It isn’t always easy. As we mentioned, some resources can play multiple roles in a Project. Most resources don’t work full-time on Projects. For example, once an individual is in a design role (Architect or UX/UI), they are no longer required to be on the Project for 8 hours daily. While they may be required to verify that the coding meets design requirements or make minor design adjustments, full-time work is not necessary.

You may now wonder, “Why would you pay for a full-time Project team when the entire team doesn’t work full-time?”. There are several answers.

● A full-time Project team is not required to be paid as costs are averaged according to work completed per resource. A tester’s effort is typically a percentage of the Project. This percentage is what determines the price of a tester.

● You pay for a combination of skill sets if your Project calls for a team. This aspect means you can access premium skills at a lower price because you only pay for a portion of the person’s time.

● It is essential to have a hardworking team for the Project. It is difficult to regain momentum after a Project has been stopped.

The Project team should behave like a well-rehearsed production. If done well, the necessary resources are available for the Project without noticeable lapses in productivity. You can outsource the best Software developers. Consider Zoom and Google Meet to help you.

You have to consider the following: Creation Cost, App Costs and Cost Comparison, Cost Of App Development, App Maintenance Costs, Cost Of Custom Web, Levels Of Complexity, Complexity Grid, Full-Time Project Team, Dedicated Project Team, Corporate Websites, and Blog Websites.

How do you react to the following: Complex Websites, Custom Website Creation, ECommerce Websites, Cloud Software Products, Software Development Rates, Average Rates, and Customer Retention Rates?

You must consider the role of Markup Developer, Frontend Developer, Experience With Projects, Customer Experience, Budget Holders, Budget Range, Budget Planning, and Type Of Application. Apt functionality and make Content Ready.

Bug fix – known issue

We can resolve an issue with the existing Software we maintain. This aspect assumes the problem is unknown and affects only a small number of objects.

Software Modification


Timeframe – 1-2 Weeks

Cost: $2k-10k

Proof Of Concept Applications

These Projects are often the first steps for startups and tend to be more about the design and possibility of achieving the desired outcome than the functionality.

Type – New Software


Timeframe – 4-8 Weeks

Price – $25k-$35k

Mobile Apps

A standalone application for iOS or Android. Moderate data collection, location awareness, and secure cloud database interaction. Push notifications and administrative portals/functions are also available.

Type – New Software

Size – Med

Timeframe – 4 Months

Cost: $60k-$70k

Consider the following steps before deciding: Levels of ComplexityComplexity GridHardware FeaturesList Of FeaturesCreative Designand Design Requirements.

Never neglect the importance oDesign rolesBudget HoldersBudget RangeBudget PlanningGovernment Programs, Federal Government, Government Officials, Mobile Developers, Engagement Models, Customer Relationship Management, and Customer Retention Rates.

Never ignore the following: Major Factors, Complete Control, App Idea, Secure Cloud Database Interaction, Cloud Environments, Code Snippets, Business Leaders, Driver State Combinations, Execution Change Drivers, Actual Pricing, and Pricing Chart.

Consider the Difference between Timelines. Consider enterprise Software development. We at Squash Apps are familiar with all natures of Projects and all sizes of teams. 


You now know what factors and steps go into estimating the cost of Software development. Every Project is distinct, so it’s impossible to cost everyone using a formula. However, defining the Project type, team size, and cost of developing Software will give you an idea of your budget range. We can help you with cost and determine your Project without obligations if you require custom Software solutions.