Every agency website has a "custom software costs $50K-500K" page. That range is useless. Here's how to actually think about what your project will cost, from someone who's quoted hundreds of them.
Why cost ranges are meaningless
When someone asks "how much does custom software cost?" they want a number. What they get is "$50,000 to $500,000 depending on complexity." That's like answering "how much does a house cost?" with "between $100K and $10M."
The range is technically correct and practically useless. The real answer depends on three things: what you're building, who's building it, and how long you need them.
The three cost drivers
Team size and composition
Software is built by people. The cost is fundamentally a function of how many people work on your project and for how long.
A typical retained team for a mid-complexity product:
- 2-3 senior developers: $50-99/hr each
- 1 QA engineer: $40-70/hr
- 1 part-time tech lead or architect: $80-120/hr
- 1 part-time project manager: included in most studio rates
At EltexSoft's rates ($50-99/hr for seniors), a 4-person team costs roughly $35,000-60,000/month. That's $420,000-720,000/year.
For a smaller project — say, a single senior developer and a part-time QA — you're looking at $15,000-25,000/month, or $180,000-300,000/year.
Duration
Software projects take longer than you think. Every time. The most common mistake buyers make is underestimating duration by 2-3x.
A mobile app with a backend and admin panel: 4-8 months to launch, then ongoing maintenance and feature development.
A SaaS platform with user management, payments, and integrations: 6-12 months to launch, then continuous development.
A data pipeline or internal tool: 2-4 months, then periodic updates.
The "launch" is not the end. It's the beginning of the expensive part. Maintenance, bug fixes, performance optimization, new features, security patches, infrastructure scaling — this is where most of the lifetime cost lives.
Where you hire
Geography is the biggest cost lever. The same senior developer costs:
- $150-250/hr in the US
- $100-180/hr in Western Europe
- $50-99/hr in Eastern Europe or Portugal (nearshore)
- $25-50/hr in India or the Philippines (offshore)
A 4-person team for 12 months:
- US: $1.2M-2M
- Nearshore (Europe): $420K-720K
- Offshore: $200K-400K
Nearshore gives you 60-70% of the offshore savings with significantly better communication, timezone overlap, and code quality. That's why we operate from Lisbon and Kyiv.
Real project costs from our experience
These are actual ranges based on projects we've built.
Mobile app (iOS + Android, native): $150K-400K for v1, plus $5K-15K/month maintenance. Our Unfold project (Apple Best of App Store) was a multi-year engagement with a dedicated team.
B2B SaaS platform: $200K-600K for v1, plus $10K-30K/month ongoing. Our HeyTutor marketplace has been an 8-year continuous engagement.
LegalTech claims portal: $300K-800K for the full platform including integrations with airlines, courts, and payment systems. Our MyFlyRight engagement has been running for 10 years.
E-commerce marketplace: $150K-500K for v1. Our Ripe project (B2B catering marketplace) was built from zero and later acquired by Hungry.
Internal tool or data pipeline: $50K-150K. Shorter engagements, smaller teams, well-defined scope.
The hidden costs nobody tells you about
Infrastructure. Hosting, CDN, monitoring, error tracking, email services, payment processing fees. Budget $500-5,000/month depending on scale.
Third-party services. APIs, authentication providers, analytics, search, file storage. These add up to $200-2,000/month.
Security and compliance. If you're in FinTech (PCI DSS), HealthTech (HIPAA), or handling EU user data (GDPR), compliance adds 15-25% to your development cost and requires ongoing investment.
Technical debt. If you build fast to hit a launch date, you'll accumulate shortcuts that slow you down later. Budget 15-20% of ongoing development time for refactoring and debt reduction.
Team ramp-up. New engineers need 2-4 weeks to become productive on your codebase. If your vendor has high turnover, you're paying this cost repeatedly.
How to budget realistically
For a startup (pre-revenue): Budget $15K-40K/month for a 2-3 person team. Plan for 6-12 months to launch. Total: $90K-480K to get to market. Keep a 3-month runway buffer beyond launch.
For a scaleup (revenue-generating): Budget $30K-80K/month for a 3-5 person team. This covers feature development, maintenance, and technical debt reduction. Annual: $360K-960K.
For an enterprise project: Budget $50K-150K/month for a larger team. Expect longer timelines due to compliance, integration complexity, and stakeholder management. Annual: $600K-1.8M.
Fixed-price vs. retainer
Fixed-price sounds safe but creates bad incentives. The vendor is incentivized to minimize scope and cut corners. You're incentivized to maximize features. Every change request becomes a negotiation. Most fixed-price projects end up costing more than retainer projects because of change orders.
Monthly retainer aligns incentives. You pay for a dedicated team. They work on your priorities. If priorities change, the team adapts. No change orders, no scope negotiations. You can scale up or down with 30 days notice.
We work on retainer exclusively. Our clients pay for a team, not a project. That's how you get engineers who stay for years and deeply understand your product.
What to do next
- Define your product scope at a high level — not detailed requirements, just what the thing does
- Estimate team size: 2-3 people for most products, 4-6 for complex platforms
- Pick your geography and multiply: team size × rate × months
- Add 30% buffer for unknowns
- Talk to 3-5 studios and compare their estimates against your math
If you want to discuss your specific project, we're happy to give you a realistic estimate based on similar work we've done.
Last updated May 9, 2026