Are you an entrepreneur looking to grow your business? Do you want to launch an app or software solution to serve your customers better?Suppose you’re interested in launching an app or software. In that case, you might wonder whether you should outsource the development process to an agency or hire a full-time developer to join your staff.There are pros and cons to both options. However, partnering with an agency is generally the better choice if you're looking to save money. Why is it more cost-effective to hire a software or app development agency instead of a full-time employee? How much can you expect to save when working with an agency?This blog answers these and some of your other most pressing questions.
Why Does Hiring an Agency Save You Money?
Some people are surprised to learn that it’s more affordable to hire an agency than an employee. There are lots of reasons why outsourcing and working with an agency can help you save money, including the following:
Flat Fee vs. Salary
One of an agency's most apparent cost-saving benefits is that you pay a flat fee for the company’s services. With a full-time employee, you have to pay an annual salary plus benefits.
Pay for What You Need
For small business owners and startup founders, you might not be in a position where you need a full-time employee who works with you year-round. You might just need someone to work with you for a few months to create an app or software.
Avoid Recruiting, Onboarding, and Training Costs
It costs a lot of money to find and train a new employee — before you even start paying them a salary.For example, you have to pay to advertise a job. Then, you must sacrifice your time (time you could be spending building your business) to interview candidates and find the right fit. Once you’ve hired someone, your next job is to spend money and time onboarding and training them. All of these costs add up and eat into your business’s bottom line.
Save Time
Who is more likely to get a development job done faster:
- One full-time app or software developer, OR
- A team of app or software developers?
In most cases, a team will work more efficiently than one person. When you hire an agency, you get an entire group of developers working on your project rather than throwing all the work at one full-time developer.
Focus on Core Competencies
Hiring an agency also frees you up to focus on core competencies and handle the aspects of your business you’re trained and experienced in handling. In a sense, you’re buying back your time — and we all know that time is money, especially for entrepreneurs.You can rest easy knowing professionals are building your app or software when you outsource. As a result, you have more bandwidth to handle other vital tasks only you can do, such as meeting with investors, developing a marketing plan, or refining one of your other products or services.
Average Cost of Hiring an Agency
How much does building an app or developing a software solution cost?The specific cost of your project varies based on numerous factors, including these:
- Size
- Complexity and features
- Developer experience
- Design elements
- Platforms and devices supported
Here’s a general breakdown of how much you can expect to pay for a professionally developed app:
- Simple apps (no complex features): $15k-$35k
- Intermediate apps (a few custom or complex features): $30k-$50k
- Complex apps (many custom features): $60k+
As for software, the average development costs can be as low as $3,000 and as high as $120k.
Average Cost of Hiring an Employee
After reading those prices, you might wonder how hiring an agency could be cheaper than hiring an employee. You don’t have an extra $60k lying around to pay for an app or software, do you? Before you decide to take the employee route, let’s think about the average cost of hiring a full-time software developer to join your team.The average app developer in the United States earns $87,602 per year, and the average software developer earns $93,809 per year.Both of those numbers are already higher than an app's average cost, even a complex one. They’re higher than the costs of many software solutions, too.When you factor in other things 401(k) matching, certain benefits, and the overhead associated with bringing another employee into your office, you’re looking at many more additional expenses.
But You Don’t Have to Pay an Employee Their Whole Salary Upfront
Now, salaried employees don’t receive this amount all at once. They get paid weekly or biweekly.Consider your business’s cash flow, though. Then, ask yourself if you consistently bring in $1,684-$1,804 per week to pay your app or software developer.If you’re running a startup or small business, you might not generate enough income each week or have enough money set aside in your bank account to feel confident that you can afford to pay a full-time developer. Keep in mind, too, that you don’t have to pay a large sum upfront to get your app or software built, either. Many development agencies offer financing options (often interest-free) to reduce your initial costs and make their services more accessible.
What if I Hire an Entry Level Employee?
An app developer or software developer’s salary depends on multiple factors.The list of influential factors includes the developer’s location (a developer in New York City or Miami will earn a lot more than a developer in Oklahoma City or Boise, for example) and experience (the more training and knowledge someone has, the more they’ll expect to be paid. Some business owners might assume that hiring an entry-level employee is an excellent way to save money.You can indeed get away with paying a new developer a lot less than you would a seasoned pro. However, the money you save in their annual salary could create much more trouble than it’s worth.For example, when you hire an entry-level employee, you’ll have to spend more time teaching them about your company culture, your target audience, and the type of app or software you want to create.A new developer may also take much longer than an experienced developer to create a working product. The more time they spend developing your app or software, the longer it takes for you to launch it and start generating revenue.You should also take quality into account. Entry-level developers are more likely to make mistakes or create products with bugs than those with years of experience working on apps or software solutions.These issues can lead to a subpar user experience for your customers. They may also result in fewer downloads or purchases, which hurts your bottom line.
How Much Can You Expect to Save?
You can easily save tens of thousands of dollars by hiring an agency instead of an employee.Furthermore, you’ll also enjoy the benefits of reduced training and onboarding time, a more efficient development process, and a higher-quality finished product. All of these benefits can help you boost sales, generate more income from your app or software, and build your business.
What to Look for in a Software or App Development Agency
To see the most impressive benefits from your software or app development agency, you need to be cautious and take your time to choose the right one. Here are some tips to help you find a development agency that will save you money and produce a quality product:
Look at Their Portfolio
Most agencies share their portfolio online. They want to show off their developers’ work and let you see what they can do for you. Always check out the agency’s portfolio to see if you like their work's quality and if it aligns with your goals.
Read Reviews
Look up online reviews, too. Reviews from third-party websites give you a better idea of the quality of the agency’s work and how well they meet their clients’ needs.
Ask for References
If you get mixed signals from reading online reviews, take things a step further and ask for references. References allow you to talk directly to past clients and learn more about their experiences.
Get a Quote
Last, get a detailed quote from each agency you’re thinking about hiring. Quotes allow you to compare prices and understand what you get when working with each candidate.Keep in mind, though, that price shouldn’t be the only deciding factor. It can be worthwhile to pay a bit more (especially when comparing the cost of an agency to an employee) to get a quality product.
Connect with an Agency Today
Are you interested in the cost-saving benefits of hiring a software or app development agency instead of a full-time employee? Do you want to work with an award-winning agency that offers unparalleled service and affordable rates?If so, get in touch with us at Alpha Bravo Development for a free, detailed quote and a consultation with a project manager.
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