How Much Does Custom Software Development Cost? Complete 2026 Breakdown
Everything you need to know about software development pricing. From simple apps to enterprise systems, understand the true costs and how to budget effectively.
Zurihub Technology
Table of Contents
"How much will this cost?" It's the first question every business asks when considering custom software development. Unfortunately, there's no simple answer. Software development costs can range from $10,000 to $10,000,000 depending on countless variables. This comprehensive guide will help you understand what drives these costs and how to budget effectively for your project.
Whether you're building a CRM system, an ERP solution, a POS system, or a custom web application, this guide provides the detailed cost breakdowns you need to plan your investment wisely.
1. Software Development Cost Overview
Let's start with a high-level overview of what custom software development typically costs across different project sizes and complexities.
| Project Complexity | Typical Cost Range | Timeline | Examples |
|---|---|---|---|
| Simple | $10,000 - $50,000 | 2-4 months | Basic CRUD apps, simple dashboards, MVP products |
| Medium | $50,000 - $150,000 | 4-8 months | Business management tools, e-commerce platforms, basic CRM |
| Complex | $150,000 - $500,000 | 8-18 months | Enterprise CRM, multi-module ERP, AI-powered platforms |
| Enterprise | $500,000+ | 18+ months | Full ERP suites, banking systems, healthcare platforms |
Quick Cost Formula
Total Cost = Hourly Rate × Development Hours + Infrastructure + Support
- • US/UK Developers: $100-250/hour → Simple app costs $50,000-125,000
- • Eastern Europe: $50-100/hour → Same app costs $25,000-50,000
- • African/Asian Markets: $25-75/hour → Same app costs $12,500-37,500
2. Key Factors That Affect Software Development Cost
Understanding these factors helps you estimate costs more accurately and identify areas where you can optimize spending.
2.1 Project Scope and Complexity
The single biggest cost driver. More features = more development time = higher cost.
- Number of Features: Each feature requires design, development, and testing
- Business Logic Complexity: Simple CRUD vs complex workflows and calculations
- User Roles: Multiple user types require additional access control development
- Data Complexity: Complex data relationships increase database design effort
2.2 Design Requirements
UI/UX design can represent 15-30% of total project cost.
Basic Design
$5,000-15,000
Template-based, minimal customization
Custom Design
$15,000-50,000
Brand-specific, UX research, prototyping
Premium Design
$50,000+
Animation, micro-interactions, accessibility
2.3 Integrations
Third-party integrations add significant development time:
| Integration Type | Cost Range | Complexity |
|---|---|---|
| Payment Gateway (Stripe, M-Pesa) | $2,000 - $10,000 | Medium |
| Email Service (SendGrid, Mailchimp) | $1,000 - $5,000 | Low |
| Accounting Software (QuickBooks, Xero) | $5,000 - $20,000 | High |
| CRM Integration (Salesforce) | $10,000 - $50,000 | High |
| Custom API Development | $5,000 - $30,000 | Varies |
| Legacy System Integration | $20,000 - $100,000+ | Very High |
2.4 Development Team Location
Geographic location dramatically affects hourly rates:
| Region | Hourly Rate | 500-Hour Project Cost |
|---|---|---|
| United States | $150-250/hr | $75,000 - $125,000 |
| United Kingdom | $100-200/hr | $50,000 - $100,000 |
| Western Europe | $80-150/hr | $40,000 - $75,000 |
| Eastern Europe | $40-80/hr | $20,000 - $40,000 |
| India | $20-50/hr | $10,000 - $25,000 |
| Kenya/Africa | $25-60/hr | $12,500 - $30,000 |
3. Development Costs by Software Type
3.1 Web Applications
| Type | Cost Range | Timeline |
|---|---|---|
| Simple Web App (MVP) | $15,000 - $40,000 | 2-3 months |
| Medium Web App | $40,000 - $100,000 | 4-6 months |
| Complex Web App | $100,000 - $300,000 | 6-12 months |
3.2 Mobile Applications
| Type | Cost Range | Timeline |
|---|---|---|
| Simple App (Single Platform) | $20,000 - $50,000 | 2-4 months |
| Medium App (Both Platforms) | $50,000 - $150,000 | 4-8 months |
| Complex App (Enterprise) | $150,000 - $500,000 | 8-18 months |
3.3 E-commerce Platforms
Custom e-commerce development costs vary significantly:
| Type | Cost Range | Includes |
|---|---|---|
| Shopify Custom Theme | $5,000 - $20,000 | Design, basic customization |
| WooCommerce Custom | $10,000 - $50,000 | WordPress, full customization |
| Custom E-commerce | $50,000 - $250,000 | Full-featured, unique functionality |
| Enterprise Marketplace | $150,000 - $500,000+ | Multi-vendor, complex logistics |
4. CRM Development Cost Breakdown
Building a custom CRM system is a significant investment, but the ROI can be substantial. Here's what to expect:
CRM Cost by Feature Set
| CRM Level | Cost Range | Features |
|---|---|---|
| Basic CRM | $25,000 - $50,000 | Contact management, basic pipeline, simple reporting |
| Standard CRM | $50,000 - $100,000 | + Sales automation, email integration, advanced reporting |
| Advanced CRM | $100,000 - $200,000 | + Marketing automation, multi-channel, custom workflows |
| Enterprise CRM | $200,000 - $500,000+ | + AI predictions, full customization, enterprise integrations |
Industry-Specific CRM Costs
- Real Estate CRM: $40,000 - $150,000 (property listings, lead management, showing scheduler)
- Law Firm CRM: $50,000 - $200,000 (case management, billing, document automation)
- Healthcare CRM: $80,000 - $300,000 (HIPAA compliance, patient management)
- Financial Services CRM: $100,000 - $400,000 (compliance, portfolio tracking)
💡 Cost-Saving Tip
Consider starting with essential features and adding modules over time. A phased approach lets you validate the system with users before investing in advanced features. Learn more about signs your business needs a CRM.
5. ERP Development Cost Breakdown
ERP systems are the largest software investments most companies make. Understanding costs helps set realistic expectations.
ERP Cost by Module
| ERP Module | Development Cost | Complexity |
|---|---|---|
| Financial Management | $30,000 - $80,000 | High |
| Human Resources | $25,000 - $60,000 | Medium |
| Inventory Management | $20,000 - $50,000 | Medium |
| Manufacturing/Production | $40,000 - $100,000 | High |
| Supply Chain | $35,000 - $90,000 | High |
| Sales & CRM | $30,000 - $70,000 | Medium |
| Business Intelligence | $25,000 - $60,000 | Medium |
Total ERP Implementation Costs
Small Business ERP
$50K-150K
3-4 core modules, basic reporting
Mid-Size ERP
$150K-400K
Full modules, advanced analytics
Enterprise ERP
$400K-1M+
Full customization, global operations
6. Pricing Models Explained
6.1 Fixed Price
You pay a set amount for a defined scope of work.
6.2 Time and Materials (Hourly)
You pay for actual hours worked at agreed rates.
6.3 Dedicated Team
You hire a full team (developers, designers, PM) at monthly rates.
7. Hidden Costs to Consider
⚠️ Often Overlooked Costs
8. Onshore vs Offshore Development
Choosing between local and offshore development is a critical decision that significantly impacts your budget.
Cost Comparison: Same Project, Different Locations
For a medium-complexity CRM (estimated 1,000 development hours):
| Location | Rate | Total Cost | Savings |
|---|---|---|---|
| United States | $175/hr | $175,000 | Baseline |
| Western Europe | $125/hr | $125,000 | 29% |
| Eastern Europe | $65/hr | $65,000 | 63% |
| Kenya (Zurihub) | $45/hr | $45,000 | 74% |
💡 Why African Development Makes Sense
Countries like Kenya offer an excellent balance of cost savings and quality. Key advantages include: strong English proficiency, cultural alignment with Western business practices, growing tech talent pool, and time zones that enable some overlap with US and European business hours. Get a quote from Zurihub to see the difference.
9. ROI Analysis: Is Custom Software Worth It?
Custom software is an investment. Here's how to evaluate the return:
Typical ROI Sources
- Operational Efficiency: 20-40% reduction in manual work hours
- Error Reduction: 50-90% fewer data entry and processing errors
- Faster Processes: 30-60% improvement in process completion time
- Better Decisions: Real-time data enables smarter, faster decisions
- Customer Satisfaction: Improved service leads to retention and referrals
- Competitive Advantage: Capabilities competitors don't have
ROI Calculation Example
Scenario: Company spends $100,000 on custom CRM
- • Sales team saves 10 hours/week (5 people × $50/hr × 52 weeks = $130,000/year)
- • Reduced errors save $20,000/year in corrections
- • Better follow-up increases sales by 15% ($150,000/year on $1M revenue)
- Total Annual Benefit: $300,000
- Year 1 ROI: 200% (after $100K investment)
10. How to Budget Effectively
10.1 Start with Business Goals
Define what success looks like before discussing costs. What problems are you solving? What value will the software create?
10.2 Use the 80/20 Rule
80% of value often comes from 20% of features. Identify must-have features vs nice-to-have, and build the core first.
10.3 Budget Buffer
Always add 20-30% contingency for unforeseen requirements, scope changes, and integration challenges.
10.4 Plan for Ongoing Costs
Budget 15-25% of initial development cost annually for maintenance, updates, and support.
11. Practical Ways to Reduce Development Costs
12. Frequently Asked Questions
How much does custom software development cost on average?
Custom software development costs range from $20,000 for simple applications to $500,000+ for enterprise systems. Average mid-size projects cost $50,000-$150,000. Factors include complexity, features, integrations, team location, and development approach. Offshore development can reduce costs by 50-70% while maintaining quality.
How much does it cost to build a CRM system?
Custom CRM development costs range from $30,000-$300,000+. A basic CRM with contact management costs $30,000-$50,000. Mid-range CRM with sales automation costs $50,000-$100,000. Enterprise CRM with AI features and complex integrations costs $150,000-$300,000+.
What is the cost of ERP system development?
Custom ERP development typically costs $50,000-$500,000+. Basic ERP for small businesses costs $50,000-$100,000. Mid-size ERP with multiple modules costs $100,000-$250,000. Enterprise ERP with full functionality costs $250,000-$500,000+. Implementation and training add 20-50% to development costs.
Is it cheaper to hire offshore software developers?
Yes, offshore development can reduce costs by 50-70%. US developers charge $100-250/hour, while quality offshore teams in Eastern Europe or Africa charge $25-75/hour. The key is finding teams with strong English communication, proven portfolios, and established processes.
What is the ROI of custom software development?
Custom software typically delivers 200-500% ROI over 3-5 years through: reduced operational costs (20-40%), increased productivity (25-50%), eliminated manual errors, improved customer satisfaction, competitive advantage, and scalability. Break-even often occurs within 12-24 months.
Get an Accurate Quote for Your Project
Now that you understand software development costs, get a detailed estimate for your specific project. We provide transparent pricing with no hidden fees.