What does custom software really cost?

The short answer

Custom software can cost a few thousand euros for a small tool or several hundred thousand for a large platform. The range is wide because “software” covers very different things.

The ranges below are a rough guide for projects built by a small team in Europe. They are not a quote, and they change with the provider and the country.

Large agencies with big teams usually charge more than these figures.

What drives the price

Scope

Every screen, report and rule takes time. The biggest lever on price is how much you ask for in the first version.

Users and roles

One group of users is simple. Several roles that each see and do different things take more design and more testing.

Connections to other systems

Linking to accounting, a shop or a customer system adds work, especially when the other system is old or limited.

Existing data

Moving data from spreadsheets or an old database means cleaning it first. This step is often underestimated.

Look and feel

A simple, clear interface costs less than a heavily branded one with animations.

Security and rules

Personal data, payments or industry rules call for extra care, and extra time.

Who builds it

Rates differ between freelancers, small studios and large agencies, and so does what is included in the price.

Fixed price or paid by the hour?

There are two common ways to pay. With a fixed price you agree the scope and the price up front. It gives certainty, but only for what is written down, and changes cost extra. When you pay for the hours worked, you keep more flexibility while you are still learning what you need, but the final cost is harder to predict.

Many projects mix both: a fixed price for a clearly described first stage, then the next stage once you have seen the result.

Costs after launch

Software does not stop costing money when it goes live. Plan for hosting, updates, backups, small fixes and improvements as real use shows what you need.

Many providers suggest budgeting roughly 15 to 25 percent of the build cost per year for this. For a small tool it is often less. Ask for the figures before you sign, not after launch.

Custom software or an off-the-shelf tool?

Off-the-shelf software is cheaper to start with. Custom software can be cheaper over the years when your process does not fit a standard product. Here is a simple example with invented numbers, to show the math.

Your own comparison will differ. If a standard tool does the job, use it. Custom software makes sense when no standard tool fits the way you work.

For a closer look at when each option fits, read our guide on custom and off-the-shelf software.

Custom or off-the-shelf software?  →

Getting a quote you can compare

Two quotes for the same idea can differ a lot. Usually they describe different things. These preparations make quotes easier to compare:

• Describe your current process in plain words.
• Say who will use the software.
• Separate what must work in the first version from what can wait.
• List the systems it has to connect to.
• Share your deadline and a budget range.

Then ask each provider the same questions:

• What is included: design, testing, documentation and handover?
• How are changes handled during the project?
• Who owns the code and the data?
• Where is the software hosted, and who runs it?
• What does support cost after launch?

Keeping costs under control

• Start with one workflow, not the whole company.
• Separate must-haves from nice-to-haves, and build the first group first.
• Decide quickly. Waiting for answers is expensive for everyone.
• Reuse standard parts, such as logins and email, where it makes sense.
• Test with real users early, while changes are still cheap.

If you are replacing an old database, our guide on moving away from Access shows what that work involves.

How to replace an Access database  →