Quantifying the App Development Costs

The following steps will help you quantify the costs you will incur during the app-development stage:

1. Make a list of all monetary costs you think you will incur during the development stage of your app. These expenses include office space, developer payroll, training, travel, hardware, and so on.

2. Make a list of all intangible costs you are likely to incur. This would include your own time if you are developing your app, risks if the app fails, lost time on other apps, and so on. Granted, it is quite difficult to quantify these areas, but some attempt is better than no attempt. Table 11.1 provides an example of the monetary and intangible costs you'll want to include on your list of overall expenses. Keep in mind that this is not an exhaustive list, and you should modify it for your unique circumstances.

Table 11.1 App Development Expense Table for Estimating Costs

Monetary Cost Intangible Cost App Development Items Estimate Estimate

Hardware (laptop, desktop PC, networking equipment, and so on)

Software (development tools, compilers, testing tools, and so on)

Google developer registration fees Self-developed app, contract development costs (by project or hourly)

Miscellaneous (printing, postage, domain registration, programming books, and so on)

Totals

Once you have a list of your anticipated expenses, you can add numeric values where appropriate. Do your best to estimate intangible costs. This part of the exercise gets a little bit fuzzy, but it's still important to have some numbers down in writing. At the bottom of the table add up the totals for each column.

If you are new to developing Android apps, you'll most likely need to get some training unless you are the type who can learn by reading manuals and then doing. Many people are best served by getting some training from experts who can teach basic (and not-so-basic) coding skills in a few weeks or months.

Android training companies such as BigNerdRanch (www.bignerdranch. com) can cost $3,500-$4,750, plus your travel and lodging expenses, but offer face-to-face instruction and will get you started with a solid development foundation.

An example of the expense table with some financial values included is shown in Table 11.2. In this example, the person is a fairly new developer in the Android app space but has a development background and needs some training in this unique space.

Table 11.2 Filled-out App Development Expense Table

App Development Items

Monetary Cost Estimate

Intangible Cost Estimate

Hardware (laptop, desktop PC, networking equipment, and so on)

$2,000 (Dell, HP, or similar + accessories)

Software (development tools, compilers, testing tools, and so on)

Google developer registration fees

$25

Self-developed app, contract development costs (by project or hourly)

Self-developed (250 hours @ 50/hr ): $12,500.00

Development training courses

$3,500 with Big Nerd Ranch or another trainer

Two weeks time (10 hours/ week @ $50.00/hr*): $1,000

Office rent

Home office

Product website development/web copy costs

$2,000

Marketing/advertising costs

$1,500

Opportunity cost of creating this app versus another app

No other apps scheduled

Table 11.2 Filled-out App Development Expense Table

Monetary Cost

App Development Items Estimate Intangible Cost Estimate

Table 11.2 Filled-out App Development Expense Table

Monetary Cost

App Development Items Estimate Intangible Cost Estimate

Miscellaneous (printing, postage,

$250

domain registration, programming

books, and so on)

^Assuming this person has development skills that would be worth $50/hr. This is a cost for his time. Granted, this may be low, but it's impossible to peg this number with any exactness.

Totals $9,275 $13,500

^Assuming this person has development skills that would be worth $50/hr. This is a cost for his time. Granted, this may be low, but it's impossible to peg this number with any exactness.

As you can see from this simple analysis, you might spend over $9,000 in real dollars to develop your first app. You may have the hardware already and so you could deduct $2,000 from the total. Regardless, you would still be at $7,000 or more to develop your first app. If you added in your own time (intangible costs), you can see that you might spend $21,000 to $23,000 in time and actual expenses to develop an Android app. The question for you to ask yourself is whether you still feel that your app can make you enough money to justify your time and expense to get the app created, approved, posted, and marketed to the Android Market.

Although you can pay a foreign developer to get an app created for $1,000 in just a few weeks, it is highly unlikely that you will see success from such an app. The time-honored phrase "You get what you pay for" applies. Most often these apps are quickly designed and buggy. You're better off going to Vegas over a long weekend with your $1,000 and rolling the dice!

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