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Tips for calculating the cost of developing software

It is necessary to factor in how potential risks may impact the time and price to complete a project.

person typing on laptop software
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It can be challenging to estimate the costs of software design, architecture, and engineering in advance. However, for everyone to be on the same page, it is necessary to provide a thorough and accurate estimate as part of the contract between the designer and client.

Estimating costs of software design depends on a lot of factors, and it is necessary to take them all into consideration to achieve accuracy. There is always a chance that someone unexpected comes up or goes off track, so it is essential to factor that in as well.

Here are some of the key determining factors when pricing software creation:

Recurring Costs

Software design programs and just about any program you may need to complete a project tend not to be free. Some will require a one-time payment, others may require an annual payment, and some may require a more frequent payment. When you are calculating the cost for a project, make a list of all the paid programs that you will have to use to complete the project. This may be one of the higher costs, as specific programs tend to be more expensive.

Take Resources into Consideration

Resources can break down to mean a lot of things. One critical resource that is necessary is something like Wi-Fi or computer space, which is frequently forgotten to factor into the charge. Another resource that is relevant for some individuals and companies is office space. If you already have space, however, you will also have to factor in utilities and rent. 

A resource that is often forgotten about is human resources. If the project isn’t necessarily a one-person project, or you need to outsource parts of it, you will need to factor in paying those who are working on the project with you.

Time and Effort

Of course, when you are doing a project, it is necessary to factor in how much of your time and effort a project takes. It is essential to establish your own hourly rate when creating an estimate for a project, and then to put that in context with how many hours you will spend on it. Middle of the line programmers often charges about $35 an hour.

Those who are more experienced can charge more each hour, and those who are just starting off may start less.

You don’t necessarily have to have a general flat rate for your services, as the extent and details of each project are different. If the project is much more advanced to do, it is okay to charge more as it is utilizing a higher caliber of your skills.

As previously mentioned, you always want to have in mind that nothing goes 100% as planned. It is necessary to factor in how potential risks may impact the time and price to complete a project. Think of it as a safety cushion—always estimate a bit higher than you need so you can account for the costs that pop up last minute.

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Chris has been blogging since the early days of the internet. He primarily focuses on topics related to tech, business, marketing, and pretty much anything else that revolves around tech. When he's not writing, you can find him noodling around on a guitar or cooking up a mean storm for friends and family.

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