Budgeting for an app is not all that different to budgeting for any other project. You’ll need detailed budgeting in order to make it happen. How much an app costs to build is an area that we know many new mobile app developers struggle with. It takes years of experience to be able to budget well. Even then, it’s still uncomfortable most of the time. Budgeting isn’t called an “artform” for no reason.
Much of the problem with creating a budget comes from the fact that it’s very hard to be exact. A lot of the math applied is fuzzy at best and all you’re usually left with is a well educated estimate when you start your project. With so many requests for mobile app development trends you will need to really clarify your clients’ requirements. One way is to make sure you are asking the right questions up front. Really understanding what is critical to include in the first version of your app will also make sure you focus your budget on the most important features. If you use an Agile Development Methodology, this is called your Minimum Viable Product or MVP.
So it’s tough, really tough, that’s why we at Kumulos have decided to take you through the most important things involved in making an app budget work, and the little things that can make a difference.
Identifying Project Costs
When it comes to identifying your costs, the main thing to look at is the project management triangle.
Its three sides are: scope, time and resources.
In the grand scheme of things, the mobile app budget comes under resources, but those three things are also essential to the first stage of budgeting which is identifying your initial project costs. Please note, your costs are not your project’s budget! They are just one part of it.
So, first you look at your scope. Hopefully you have a clear document that outlines the requirements of the project, whether it’s from a client or you’re working on an in-house project you should always have clear project requirements. Be clear on requirements for analytics, push notifications & in-app messaging, crash reporting etc. Unclear requirements open the door to major scope creep, something you want to avoid. Your scope will detail just what you have to do, and from that you can start to plan out how long something will take with the resources available, which will then give you an idea of your costs.
If you’re a small mobile app developer business, you probably don’t have more than maybe two teams of developers, and usually only one. This makes it easy as you know how many people are able to work on the project. Talk to your lead developer and get them to give you an estimate on how long it will take to create the app and use past projects as examples of individuals working speeds and ability to help you come to a number of man hours. Watch for people exaggerating their working speed, but don’t pad the hours as a “just in case” yet, that’s for the risk assessment phase.
Take into account things like planning time for creating the app, deployment, publishing fees (for example the $25 charge to publish to Android’s Google Play), integration, debugging and quality control. These things are often overlooked at the start of a project but they take time, and with things like debugging, can quickly take a very significant amount of that time if the problem is big enough. By including these things in your initial costs, you’re ensuring your budget plan is as realistic as possible, something you (and your client if you have one) will be thankful for later.
Future Expansion & Recurring Revenue
One last thing to bear in mind with your costing is future expansion of the app and app store optimization. It’s unlikely that the app you initially launch will be the absolute final version; instead you will likely want to expand its features as time goes along. Add in this estimated time into your costs, but don’t go crazy, you don’t want to scare away a client by posting a budget that’s way more than they thought it would be. When it comes to recurring revenue, don’t forget to interest your client in ongoing app store optimization (ASO) services and mobile marketing automation services too.
Risk assessment is, in a way, the padding of the budget, with the core being the initial costs. It’s there so you can have an idea of and plan for special circumstances of any nature within your project, of which there are usually many. Without RA, anything that goes wrong and incurs extra time spent or costs will be affecting your bottom line, something we’re sure you want to avoid. If you’re creating an app for a client, remember that risk assessment is part of your initial budget estimate and isn’t sales mark-up, it’s part of the costs for the project as a whole.
First, identify your risk items. These should include, but not be limited to, developer experience, technological stability (as in, how likely it is one of your computers or any software, including the app, will break), the distance and accessibility of your client, the app’s dependencies (does it need a database? geolocation?) and also general unknowns. These unknowns can be anything, but it’s important to acknowledge that you cannot plan for everything and so set aside money in your budget to compensate for this.
Once you’ve identified all your potential risks, assign an estimated “scope” or resource drain that those risk might incur, and a percentage of your overall budget to cover the cost of that drain. For example, if one part of your development team is more fluent in Android programming but you’re making an app for iOS, they have a higher “risk” than those developers more comfortable with iOS.
Remember as well that all of you, at the end of the day, are human beings and that at some point you’re likely to make mistakes and forget things, or get ill or have personal issues that will affect work. These things happen, it’s just part for the course, so remember to assign a risk to that as well. Some developers recommend as much as 5% of your overall budget, but we say to leave it to your best judgement. If you have a good team, who have worked well and on time before, then perhaps adjust that percentage to less than 5.
By the end of your budget you’ll notice that risk assessment is taking up a noticeable chunk of your total, this is normal. On some projects it can be as much as 30% of the budget estimate going into risk assessment. At the end of the day though, you have to make a trade off; you don’t have unlimited funds to pad any and all problems, and you also can’t run without protection because things will always go awry somehow. As with the human element, use your better judgement, look back on previous projects and use your performances in them to get a good estimate of how you’ll handle this most recent one.
After you’ve had your budget approved and your project is rolling, you should always be keeping a close eye on your money. Keep tabs on overall spending and also specific details of where the budget is going. Are there any elements that are sucking down cash like there’s no tomorrow whilst others sit high and dry? What about employee hours? Are your team working within the budgeted man hours? These are some of the things that you need to always be aware of, which is why constantly reviewing your budget is important. It helps you, as project manager, keep control of your ship and to see which direction it’s heading in and to make sure you deliver your app on time and on budget.
Part of developing any app is working out what services it will depend on to work properly. Many apps these days require databases to recall from for example. Having your team of app developers create backend server solutions can put a lot of strain on your time and budget, so why not relieve yourself of that stress and talk to us at Kumulos today about using our Mobile Backend to not only help you make a better app, but to do better business.
Kumulos is the world’s leading mobile app performance management platform. It’s the only fully integrated platform that lets you manage the technical and commercial performance of mobile apps. All from a single pane of glass! The Kumulos APM platform comes with a comprehensive range of services covering the entire life cycle of the app. Its 5 integrated services include app store optimization, analytics & reporting, backend hosting, crash reporting & API endpoint monitoring and its award winning push notifications & in-app messaging service, which received awards from Business of Apps, Mobile App Daily and The Tool. Contact us for a tour today, or start your free trial.