What does it cost to build an app?
Sooner or later, discussions of mobile apps come down to money. You'll find no easy shortcut to this one. Among the businesses we interviewed, development costs varied dramatically, ranging from virtually nothing (with some businesspeople learning how to code by reading off-the shelf reference books and building the app in their spare time) to hundreds of thousands of dollars. It all depends on how ambitious and complex your app is, and how you go about building it. Apps tend to cost more to develop than mobile websites, however.
Little Idea, mentioned previously, spent $4000 to create its app, using an independent developer. (“The first person we talked to, who was on point in every way,” says Hudson.) Work took two months to complete.
Or consider the app developed by MyMovingReviews, a website that rates and reviews moving companies. The company’s My Move app, which helps consumers plan and execute a move, took $24,000 and five months of “hard work,” says manager Martin Panayotov. The company used an eastern European software outfit to build an iOS-only app, which the company initially sold for $2 a pop. Now the app is free, and last year My Move was ported to Android, a much cheaper prospect since “the legwork had already been done.” Still, for My Move, it’s an iOS world: “The iPhone app greatly outperforms the Android one, no matter that Apple holds about 20 percent of the smartphone market,” says Panayotov.
At the far end of the spectrum you’ll find Brightleaf, which spent an estimated $300,000 to build a mobile app and a back-end system for its customers (attorneys) to use when drafting forms and documents for their clients. It’s a complex system, but Brightleaf offers it to customers for free. “We give the mobile stuff away … but we make our money when lawyers want to use the full, paid version of Brightleaf to modify, customize, and publish their own forms,” says Luke O’Brien, the company’s VP of strategy.
If your mobile ambitions are a bit more basic, several DIY app-building services are available, such as JamPot’s TheAppBuilder. These services take much of the hassle out of app development by letting business owners create apps through a variety of what-you-see-is-what-you-get templates, and the results can be surprisingly slick. Cost varies depending on the service; most charge one-time creation fees, and many impose monthly maintenance fees. You’ll also be on the hook for the developer-registration fees for whatever platforms your app resides on. Google charges a one-time $25 fee, whereas Apple and Microsoft require a yearly $99 developer subscription.
Such services aren’t cheap, but they’re often less expensive than hiring a dedicated developer. Just pay attention to the recurring monthly fees and determine whether it might make more fiscal sense to pay the up-front premium for a developer, to avoid being bled by repeat charges over the long haul. If you have a truly unique app in mind, you'll almost certainly have to hire a professional.
What’s the payoff?
Small-business owners have never been much for analyzing return on investment, and the world of mobile apps is no different. It should come as no surprise that unless you’re selling goods or trying to make money by selling the app directly, measuring ROI is difficult.
Competition is fierce in the app arena, and the businesses we spoke to reminded us that success is determined by how you market and promote your app. You can’t rely on being featured by Apple (though it’s awfully nice if you are). You must constantly promote your app on your website, on social accounts, and probably through advertising, too.
MyMovingReviews is one of the few companies we talked to that said it could quantify the app’s value. Panayotov estimates that the company’s app paid for itself within a year. He gushes about its success: “Creating the mobile app was one of the best decisions we made. Because of the exposure, we were able to increase brand awareness and help our website get more popular over time. Having a mobile-app link on the homepage immediately makes you trusted in the visitor’s eye.”
Another company, MyCorporation, which offers business incorporation and startup services, says it used internal resources to build an app, which has since garnered just 500 downloads. But those downloads, says social media manager Heather Taylor, have generated $50,000 in extra business. Was it worth the effort? “Most definitely,” she says. It doesn’t always take millions of downloads to make significant money.
Apps don’t always work out
Of course, an app isn’t a sure thing. One small business we spoke to, Bella Reina Spa, had trouble from the start. CEO Nancy Reagan says, “It was a very tedious process deciding who could build it.” She finally hired a small company to do the work for $299 plus monthly upkeep charges of $29. “We had tons of downloads and people used it for information, but in the end it was not as powerful as a mobile website.” Eventually the app was scrapped.
I can't stress this enough: Doing your homework before building an app is crucial. Even the best-laid plans often go awry, as the saying goes, but it is important to pin down what you expect from your app—or whether you even need one—before committing your SMB's resources. Can you justify the extra expense of an app, or could a mobile website accomplish the same goals?
As a final note, remember that you don’t have to share your app with the general public for it to be useful. The ROI of internal apps can be even harder to calculate, but their value can be immense if they save you time and headache. Generally such apps are more popular with larger businesses—or at least those with larger clients.
One example is Bell Nursery, which supplies plants to 150-plus Home Depot garden centers and is responsible for 1700 people stocking those plants at each store. Bell Nursery developed a mobile app to let employees track inventory at each store without having to physically go inside, saving countless hours of employee time.
And although SWAT teams and fire crews aren’t really a small business, developer VeriPic created a mobile app that lets such groups access secure photos of public buildings and intersections during emergency calls, showing them where gas valves and exits are located so that they don't have to consult old-school maps.
The takeaway: Apps don’t have to bring in revenue to be indispensable. A small mom-and-pop garage, say, might not see much return on a customer-facing app, but it could find an inventory-management app to be worth its weight in gold.