Effective Tips for Start-ups to Reduce Software Development Costs


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One of the biggest challenges that most tech start-ups face today is – How to develop business software on a low budget? On average, one in six projects appears to have increased its budget by 200%.

Nowadays, more and more organizations are deciding to digitize their operations to improve operational efficiency and ensure business continuity. But this Covid-19 thing has intensified the need to reduce software development costs, which has become an important goal for many CEOs.

And if we talk about the main reasons for budget overrun? Poor planning, lack of communication, and sometimes unrealistic capabilities or requirements in technology can be counted as the main reasons.

So, is there a way to develop your software successfully without losing all your money? Of course, there is!

In this article, we enumerated a number of practical tips that can help you significantly reduce the cost of creating software without compromising its quality.

But, before we move ahead, let’s take a look at the factors that affect the cost of software development.

Factors Affecting the Cost of Software Development

1. Feature Set

The set of functional features is a major part of software development and an important factor that affects the cost of developing software.
The whole idea of creating MVP is to launch a product with simple features to get feedback from end-users as soon as possible. The more features you implement, the harder it will be for your team to invest time and effort. Also, the cost of your software development will go high.

However, it would be best to remember that MVP is not a prototype or mock-up. MVP is an effective product and should deliver value to your target audience.

2. User Experience and User Interface Design

User experience (UX) and user interface (UI) design are critical factors in how users interact with your product. UX determines how easy it is for customers to use your product, how long they use it, and how often they return to use the product. The user interface helps you express your brand image and stand out from the competition.

The total cost of MVP depends on the number of user streams, navigation elements, screens, pages, buttons, pictures, and animations created by your product designers. Also, the use of complex design techniques such as 3D modeling or motion design increases the cost of software development.

3. Software Complexity

Before embarking on the development phase, you should clearly define the platform you want to reach your end-users. For example, you can develop a responsive web app so that your target audience can use your app in a browser on any device, or you can create separate web and mobile apps. If you choose to reach your audience via mobile, you’ll also need to decide whether you’re building an Android or iOS app (or both). The more platforms you want to cover, the higher will be the cost of your software development.

Software development cost also depends on the number of external integrations in your software product (e.g., third-party payment processors) and internal integration (e.g., CRM and HR systems).

Innovation of software solutions also plays an essential role in your project budget. Creating an MVP for a marketplace or other existing software is a routine and easy-to-understand task. Meanwhile, MVP development is more difficult for unique applications than no analog ones. Suppose the development team does not have a clear vision of how to implement or execute the functionality of your product. In that case, more resources may be needed to research the product and build a prototype.

4. Team

An optimized team is needed to avoid the rising cost of software development. It may seem plausible that hiring more professionals means faster development. However, this is not always the case. The more experts involved in your project, the more it will be difficult to ensure effective communication and effectively manage the development process. Poor communication or management hinder development, resulting in delays and increasing the project’s overall cost.

Ways to Reduce Software Development Cost

Now that you know the aspects that impact the cost of software development, let’s have a look at proven methods to reduce the cost of software development cost:

• Consider Outsourcing

When it comes to reducing software development costs, outsourcing is one way to achieve this. Fortunately, you will find many custom software development companies, and you no longer have to worry about geographical constraints. By partnering with a custom software application development company, you can take advantage of a wide range of resources and save on many expenses, such as sick leave, insurance, staffing cost, etc.

However, there are a few things to keep in mind when choosing a software development partner so that it doesn’t affect your budget:

– Hire globally. Consider finding a partner outside of the USA and Canada region. This way, you can get the perfect value for your money.
– Make sure the custom software development partner has the strength you need. Many external development agencies hire developers for specific projects and retain those developers once the project is completed. Some agencies may include this cost of hiring at your end, leading to higher prices for you. To avoid this extra cost, you can work with partners who will hire and give you the pricing as per your project.

• Provide Detailed Project Scope and Requirements

Whether you start working with a software outsourcing company or have an in-house team, make sure the project’s scope, objectives, and functional requirements are clearly stated. When the project is in full swing, you don’t have to spend much time figuring out how to complete each task. If it is already defined, it also reduces back-and-forth requirements and avoids spending time and money doing the same thing.

If there are no well-defined requirements for the job, you may see a high cost of resources in terms of overtime and missed deadlines.

• Work Upwards from the Least Viable Product

One of the biggest mistakes made by inexperienced start-ups and even well-established companies is their choice to develop the entire software. This allows problems and challenges to be explored during the launch period. This results in more overhead, as you will have to start over.

Instead of going into a whole software project, start with the least viable product and gather feedback. Many organizations feel that they need to make adjustments and changes before launching the final product.

• Have a Look if you Can Use Pre-built Features

If you are out to save money, one of the tricks that can help you is to use pre-built features and templates. That doesn’t mean you need to pick up everything off the shelf; You can think of features and add-ons that can be easily and seamlessly integrated without writing code to the development team from scratch. This saves time and reduces the overall cost of the project. Furthermore, since pre-built features are already being tested for performance and functionality, they can help in developing relatively affordable and high-quality products.

• Involve Quality Assurance Experts in the Development Process

Another way to reduce development costs is to make sure your software products are free of bugs. You will need a Quality Assurance Professional who will analyze your software at various stages of development and ensure that the final product is error-free and working as desired. If you postpone testing to the final stage, you run the risk of accumulating many errors that require time and resources to resolve.


Cost reduction is a top priority for many industries. A few years ago, reducing costs was a secondary goal, as companies focused on customer satisfaction and increasing agility. However, this year’s survey shows that there has been a significant increase in the number of companies cutting costs following the global recession caused by the pandemic.

So, take the notes from this blog and apply them to your organization.

Abel Willium
A highly motivated and ambitious professional who comes with a robust and resilient personality. I'm responsible for devising marketing strategies for the profitable growth of the company. I also ensure campaign execution, monitoring the marketing channel budgets against projected plans, continuously optimizing the marketing channels, and striving to push them to an auto-pilot mode of lead inflow where minimum intervention is required.


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