How Much Does It Cost To Build A SaaS Application

You've got a great idea for a SaaS app. The market looks good, and you're eager to start. But hold on - let's talk about money first. How much will it actually cost to turn your idea into a real, working product? 

The global Software as a Service (SaaS) market is experiencing significant growth. By 2032, the market is expected to reach $1,228.87 billion demonstrating a compound annual growth rate of 18.4%. With this massive growth exposure, one of the most common questions we encounter from business owners and startup entrepreneurs regarding SaaS is: How much does SaaS applications costs? This guide isn't here to scare you off. It's to help you plan smartly. We'll look at all the costs - from building the first version of your app to growing it into something bigger. We'll also point out expenses that many new business owners don't see coming. 

We won't sugar-coat things. Building a SaaS app can be expensive but the value it gives in return results in greater ROI. But knowing the true costs upfront can save you from nasty surprises later. It can also help you make better choices about how to spend your money. 

By the time you finish reading, you'll have a clear picture of what it takes to fund your SaaS business. You'll know what to expect, where to save, and how to plan for success. 

How Much Does It Cost To Build A SaaS Application? 

The short answer is that the cost for a SaaS application can range anywhere from $40,000 to $150,000 or more for a complex, enterprise-grade solution. However, the long answer is much more intricate than it seems. Let's break down the various factors that influence the cost of building a SaaS application and explore both the obvious and hidden expenses. 

Detailed Breakdown of SaaS Application Development Costs 

Building a SaaS application involves multiple stages, each with specific cost components. Here’s a comprehensive breakdown from planning to maintenance: 

Are you a startup founder, product leader, or serial entrepreneur curious about the cost of building a SaaS platform? This guide will help you understand: 

• The costs involved in developing SaaS software 
• Factors that influence SaaS development costs 
• Hidden expenses associated with building a SaaS platform 
• Real-world examples of SaaS platform costs 

By the end of this guide, you'll have a clear picture of what it takes to bring your SaaS idea to life. Let's dive into the details. 

What Does It Cost to Build a SaaS App? 

Developing a minimum viable product (MVP) for a SaaS startup generally costs between $60,000 and $150,000. However, several factors can influence the final cost, including: 

• The complexity of the solution 
• The type of product 
• The type of development team 
• The location of the development team 

Let's explore each of these factors in detail. 

SaaS Development Costs Based on Complexity 

The complexity of a SaaS platform refers to the number of functionalities, user roles, and their interactions within the application. We can categorize complexity into four levels: micro, basic, average, and complex. Here's a breakdown of the estimated costs based on complexity: 

1. Simple SaaS Applications Basic features targeting a specific niche. Cost $20,000 - $40,000. 
2. Medium Complexity SaaS Applications More features, integrations, and a robust architecture. Cost $40,000 - $150,000. 
3. Complex SaaS Applications: Enterprise-grade solutions with advanced features and extensive integrations. Cost: $150,000 - $500,000+. 

Keep in mind that additional hidden costs, such as purchasing a domain name or integrating APIs, may arise during development. 

SaaS App Development Costs Based on SaaS Type 

The type of software being developed also impacts the cost. Some SaaS projects require advanced features and heightened data security, which can drive up costs. For example, accounting software needs robust data protection technologies.  

• Micro SaaS Focused on a niche with limited features costing approx. $20,000 - $40,000. 
• Basic SaaS More features than Micro SaaS, relatively simple costing average SaaS pricing around $40,000 - $70,000. 
• Average SaaS Moderate complexity with multiple features and integrations costs you in the range $70,000 - $150,000. 
• Complex SaaS Highly complex with custom features and scalability. With complex SaaS products, usually there’s no bar, depending on the technicality & expertise falling somewhere near this range $150,000 - $500,000+. 

Here's an estimate of costs for different types of SaaS applications: 

SaaS Software Development Costs Based on Team Type 

The type of development team you choose significantly affects the cost of building your SaaS app. Here's an overview of average costs for different team types: 

• In-House Team Offers control and direct communication but is more expensive due to salaries and benefits. Cost $80,000 - $300,000 annually. 
• Freelancers More affordable but may lack cohesion and consistency. Cost $20,000 - $150,000. 
• SaaS Development Company Provides comprehensive services and expertise. Cost $50,000 - $300,000+.  

Let's explore these team types in more detail. 

Type 1: In-House Team 

An in-house team works directly within your startup environment. This model provides quick access to developers and keeps sensitive information within the company. However, it comes with high costs and requires adherence to labor laws. 

Pros 

• Quick access to the development team 
• Control over development workflow 
• Better understanding of company goals 

Cons 

• High costs 
• Hidden expenses related to developer hourly rates 

Type 2: Local Development Company 

Hiring a local software development company can be expensive, especially in high-income countries like the USA, UK, UAE and Canada. While this option eliminates time zone and cultural differences, the cost can be prohibitive for startups. 

Pros 

• No cultural and time zone differences 
• Legal recourse available within the same jurisdiction 

Cons 

• High costs, especially in high-income countries 

Type 3: SaaS Freelancers 

Freelancers are independent developers experienced in various tech stacks. While they offer flexibility and expertise, they may lack loyalty to your project and can switch clients easily. 

Pros 

• Expertise in developing functional SaaS products 
• Cost-effective 

Cons 

• Limited control over workflow 
• Potential lack of commitment 

Type 4: Outsourced SaaS Development Team 

Outsourcing development to a team in a different country can offer the best value for money, especially if the team is in a region with robust technological infrastructure. However, communication and cultural differences can pose challenges. 

Pros 

• Cost-effective 
• Scalable team 
• Access to a network of talented developers 

Cons 

• Potential communication barriers due to time zones 
• Cultural differences may affect workflow 

SaaS Development Cost Based on Location 

The location of your development team plays a crucial role in determining the cost. For instance, developing a SaaS solution in the USA might cost $180,000, while the same project in India might cost around $80,000.  

Factors that influence SaaS development costs 

Application Complexity

More features and advanced functionalities increase the development cost. Simple applications are cheaper to develop compared to complex ones. 

Technology Choices 

The programming languages, frameworks, and tools used can affect the cost. Some technologies are more expensive due to licensing fees or the need for specialized skills. 

Team Size and Location 

Larger teams or those with highly skilled developers can cost more. Also, developers in different regions charge different rates. For example, developers in the U.S. generally charge more than those in India. 

Design Requirements 

Custom designs for the user interface (UI) and user experience (UX) add to the cost. High-quality design work requires more time and expertise. 

Integrations 

Connecting your SaaS application with other services, like payment systems or customer management tools, can increase costs. Each integration requires additional development work. 

Security and Compliance 

Ensuring your application is secure and meets legal requirements (like GDPR for data protection) can be expensive. It involves extra development time and possibly additional certifications. 

Scalability 

Building an application that can handle many users and high traffic from the start can be costly. This involves using advanced technologies and architecture. 

Ongoing Maintenance 

After the initial development, you need to maintain and support the application. This includes fixing bugs, updating features, and ensuring everything runs smoothly. 

Development Timeline 

If you need the application developed quickly, it might cost more. Short timelines can require more resources or overtime work. 

Real-World Examples of SaaS Development Costs 

To provide a clearer picture, let's look at some real-world examples of SaaS development costs. 

Case Study 1: Slack Clone 

Slack, a communication platform, includes features such as in-app notifications, messaging channels, and app integrations. Developing a SaaS messaging app like Slack costs between $70,000 and $100,000. 

Case Study 2: MailChimp Clone 

MailChimp, a marketing platform, offers features like custom forms, email automation, and A/B testing. Developing a similar MVP would cost around $80,000 to $100,000. 

How Much Does It Cost to Build a SaaS Application? - A Brief Overview 

Understanding the costs involved in developing a SaaS application is crucial for budgeting and planning. Here's a detailed breakdown of both one-time and recurring expenses you can expect, with the total cost ranging from $60,000 to $150,000+. 

One-Time Expenses

Recurring Expenses (Per Month)

Total Cost 

Total 

One-Time Expenses + First Month of Recurring Expenses 

Average Cost

$50,500 - $150,500

Disclaimer: Note that these costs are averages and can vary significantly depending on factors such as the scope of the SaaS project, complexity, features, and more. It’s important to conduct thorough research and planning to get a more accurate estimate of the costs specific to your SaaS business. 

Key Factors Influencing SaaS Development Cost 

• Business Logic Complexity More complex logic increases development and testing costs. The overall workings of the app, its purpose, and user outcomes. 
• Tech Architecture Robust and scalable architecture requires more investment. 
• UX/UI Design Design complexity directly impacts development activities and costs. High-quality design enhances user experience but requires significant resources.  

Post Release/Hidden Expenses of SaaS Development 

In addition to the visible costs, there are hidden expenses in SaaS development, such as: 

• Maintenance Typically, about 25% of the development cost, covering hosting, domain name, SSL certificate, and technical support. 
• Marketing Essential for growth, marketing costs can be as high as $200,000 to $300,000 annually, covering SEO, email marketing, PR, and more.  

Choose Prioxis as your trusted SaaS Product Development Company 

Opting for an India-based development team can be a cost-effective choice without compromising quality. Our vast talent pool and competitive rates make it a preferred software development company for SaaS development. Skilled professionals and cost-effective solutions ensure high-quality services at a fraction of the cost compared to North America and Western Europe. 

Estimating the Cost of Developing a SaaS Application with Prioxis 

Suppose you choose Prioxis, an IT outsourcing agency based in India, where the average hourly rate ranges from $20 to $60. Developing a SaaS solution typically takes 3 to 6 months with a team of 3 to 5 specialists. This results in a cost range of $60,000 to $150,000+, depending on the complexity, customization, and team expertise. 

Building a SaaS app involves careful planning, budgeting, and execution. With Prioxis as your development partner, you can reduce risks and control costs while achieving a successful outcome. Our subscription-based services cover all common business needs at a monthly fee, providing cost-effective, advanced solutions. 

Our team at Prioxis can help turn your SaaS idea into reality. With over 5+ years of experience and a talented team of 50+ developers with an average of 7 to 12+ years of expertise, we offer comprehensive digital solutions. Check out our portfolio and reviews on Clutch for proof of our expertise. 

Contact us today to schedule a free consultation and get a no-obligation estimate for your SaaS project. Let’s start building your SaaS platform today!