Cost and Features to develop Software for startups

Cost and Features to develop Software for startups

Startups are redefining the economy with their innovative solutions and addressing the problems of the common people through technology.

However, in order to attain growth, these startups require software for their daily operations and processes and hire software development services to build one for them. In this regard, they need to know the cost and features to develop software for their own purposes. 

Software engineers are essentially accountable for the quicker estimations of the cost. They need to provide a reason for which logic stands behind the actual price of the software. Wrong calculations can easily cause major problems for startups and their customers too. 

Majorly, the cost is made up of actual time as well as effort spent on the project. It has several components. Among them are the direct and indirect expenses. Essentially the direct cost of software projects majorly comprises the income of every individual of the team, payments for the essential hardware used, different expenditure on other things that are required for work. Indirect costs consist of control of the quality, security issues, audits, and much more. In simpler words, they are essentially not addressed for a particular project. There are a few more things that make up the actual cost of the software development of the project. 

  1. Efforts which are spent by the people on the requirements of the project.
  2. Resources required for tasks’ completion.
  3. Software purchases, along with maintenance.
  4. Rent of the office and payment of the bills.
  5. Risks associated with the project.

Factors Affecting Cost of Software for Startups

Essentially, there is hardly a particular list of things that make up the entire cost of software development for each project. However, there are several key factors that affect the cost. They are:

1. Size

Basically, it is quite easy to calculate the cost of development of software here. The more number of screens, the more work will be performed before the actual release. Also, the more you will be paying for the software. A screen is essentially what the user will see after the launch of the software. The same is for SaaS product development

2. Complexity

It means complexity in coding and testing. The design matters, and it can be added to the overall project complexity. However, if you require custom fonts, icons, or images, then you will have to ask the designer to deal with all of these issues. Hence, it is better to consider that there may actually be several iterations as well as re-design attempts after receiving feedback. If you wish to integrate the software with third-party software or systems and if you wish to let the users to easily choose between one of the different payment systems available, you have to integrate with all the systems and offer the users with this choice. 

Complexity also consists of data migration. Essentially, you may require a single script that will transfer data from one particular system to another. Basically, there might be a lot of different details that need to be solved in order to complete the entire process. Even, there will be a requirement to check if everything is performing the right way in order to prevent any problems in the upcoming future.

3. Budget

For a startup, it has a limited amount of money to spend on developing a new project. Hence, it is quite great to find a custom software development company that will not actually blow it up. In case the startups have a very limited budget as well as the number of features it wants to have cost much more, then there is a need to set the right priorities or actually find the money. Hence, it is essential to define the budget before starting a new project. It is better to discuss what the startup will do if the development company needs more hours or more number of people for the completion of the project. At present, there are different software development services which don’t request additional payments if they completely fail to finish the work on time. Hence, cooperation with such types of companies will provide a guarantee that the startup will not blow up its budget.

Estimating the cost to develop Software for Startups

It is an established fact that you can’t actually handle successfully what you cannot simply gauge. Whatever gets measured, gets easily done. If you wish to know how to estimate the cost to develop software, you need to know the most commonly used approaches to this particular issue, as well as key factors that you have to take into account. Mentioned below are the key points:

  1. Costs- It is measured in the currency, mostly in dollars.
  2. Durations- It is measured in calendar time.
  3. Efforts- It is measured in person-months.

Read the blog- How much does custom software cost to build?

Efforts, as well as costs, are very closely interconnected. Essentially, efforts are actually calculated in person-month, and it can easily be converted into a given price in dollars by simply defining an average charge or payment or rate per a certain period of time and then multiplying this particular rate by the overall efforts. Most development teams face the following challenges:

In most cases, expert opinion is generally utilized as one of the key ways to calculate the cost to develop software. Basically, this particular method is directly associated with the fact that most of the development teams essentially rely on the experience to estimate project costs. But, it comes with different issues like different specifications as well as the lack of experts.

Rather than judgment and opinion, development teams tend to utilize quantitative methods, which includes both analytical as well as empirical. In the case of empirical methodology, it utilizes information from previous projects to calculate the development cost of the project. In the case of the analytical method, it is based on the problems that need to be solved as well as the development rates. Both are necessary for finding the cost of the development of AI software solutions.

Steps to Estimate the Cost to Develop Software

In order to make a good estimate, the key attributes of the quote of the software cost are:

  1. It is based on reliable and trusted estimate methodology.
  2. It is comprehensive, which contains all the details.
  3. It is developed by the development team.
  4. All the calculations are duly approved by the stakeholders.
  5. All the risks are measured and understood.

On the basis of these points, the cost estimation should actually be completed in below steps:

Step 1- Defining the Scope as well as Velocity

The very first thing that you need to understand how extensive the project is. Essentially, it is recommended by experts to actually focus on an MVP or a minimum viable product that is the minimum of the product features required to develop software. Simply research the audience and understand its requirements and needs and deliver the most relevant features

In order to measure the velocity, you can utilize any of the following models:

  1. Running Sprints to understand how the development is actually going on.
  2. Determining the number of actual, fulfilled user requirements.
  3. Using the velocity of the team from a particularly similar project.

Step 2- Planning everything with Software Development Team Members

Now, planning is the next big thing you need to evaluate the average cost to develop software. The team gets together and then discusses the details of the project. In this process, team members often talk about different user stories and actually determine the project timescale. Also, only the development team members are the ones who are allowed to vote. The opinion of the stakeholders is valuable in order to identify the necessary and compulsory elements of the entire software development cycle. Also, it brings a particular shared vision of the complete process. This is quite essential in case of development of enterprise mobility software.

Step 3- Creating a Budget

It has been found in research that a significant number of IT projects have cost overrun. This means that even the most experienced professionals often fail to provide quite an accurate estimation of software development. In order to reduce this particular risk, you should stop creating a cost estimation of software and start developing the budget for the same. This means brainstorming about different valuable decisions such as:

  1. Coding the set of stories now or later on?
  2. Distributing the budget in this quarter or not?
  3. Involving more people or consider outsourcing?
  4. Launching a startup or not?
  5. Starting work on the first features now or later on?

It is quite obvious that the development of software in-house often leads to a higher cost than outsourcing the cost of the project. Also, on both basis, you can certainly have a fixed sum, which won’t greatly depend on the total number of hours that are spent.

Step 4- Budget the Costing of Software Development

Whenever you are utilizing the Lean Startup approach, in that case, it is time for the above-mentioned MVP. In order to speed up the entire process, use particular software. The main thing is to actually identify the features which are “must-have” as well as “nice to have” of the project. The compulsory features influence the entire project, while the different additional components will essentially make the product much more functional. Both should be considered in the development of SAP software solutions.

Step 5- Dividing Requirements to Improve Transparency

Essentially, it is a Scrum methodology whenever a team works on every feature in a given short time and moves on. Basically, it helps to actually see whether the particular expected budget actually matches the reality and what extra expenses may arise in the coming future. Hence, this point partially connects with the former one as it is quite crucial during the entire development phase.

Step 6- Using Both Capitalizations as well as Amortization

Basically, the capitalized cost to develop software includes different expenses like quality assurance, developer compensation along with direct as well as indirect overhead charges. Also, software capitalization actually consists of internally-developed software to utilize only within the company. Essentially, these are membership tracking systems, cash management tracking systems, accounting systems, as well as production automation systems. Also, capitalization is generally required to be in complete harmony with usually accepted accounting principles. 

After the software is in use, the entire capitalized costs required to be amortized. Essentially, amortization is based on the overall percentage of the outcome. 

Features of Software for Startups

When it comes down to features of the software for startups, there are three major sections that should be considered. Mentioned below are these essential features.

1. Accounting and Finance 

As per research, most of the businesses already utilize some sort of finance and accounting software. Some of the features which finance and accounting software should have are listed below:

  1. Accounts Payable
  2. Accounts Receivable
  3. Bank Reconciliation
  4. Invoicing and Billing
  5. Fixed asset management
  6. Expense tracking 
  7. Project accounting
  8. Payroll management

Read the blog- Cost And Features To Develop An HR Software

2. CRM or Customer Relationship Management 

Most of the businesses already utilize CRM software. However, not every CRM present in the market offer all of the features. Also, the overall value they actually add to the organization will certainly depend on the business goals. But, it is evident that CRMs with all of its features will offer you with the required tools you wish and a little bit of room to achieve growth. Some of the features are:

  1. Reminder System or Calendar
  2. Lead Scoring
  3. Mobile Access
  4. Marketing Automation Integration
  5. Segmentation
  6. Proposal and Quotes 
  7. Social Media Integration
  8. Email Marketing
  9. Task Management
  10. Internal Chat Integration

3. Information and Data Security

Essentially, there are numerous software categories that make up the entire data and information security, and the demands of your business will determine which kind you should invest in. 

A significant portion of businesses is already utilizing some sort of data and information security software. Here, we are highlighting the largest category, which makes sure the security of the business, which is computer security software. The list of features are mentioned below:

  1. Anti-Spam
  2. Audit Trail
  3. Vulnerability Protection
  4. Compliance Management
  5. File Access Control
  6. Database Security Audit
  7. Maintenance Scheduling
  8. Financial Data Protection.
  9. Security Event Log
  10. Real-time Monitoring
  11. Virus Definition Update 


Startups require reliable and robust software in order to efficiently streamline their processes and improve the productivity of their employees. However, to develop software for startups requires considering various aspects such as budget, features required, and much more. Here, we have discussed the factors affecting the cost of developing software along with estimating steps. We have also discussed the necessary features that a custom software development company should include in the software developed for startups.