How much is to build SaaS application?

Published 01 Mar, 2020 in business
In this article we review approximate cost of building SaaS and how it can be minimize.
SaaS Forge

Founder and author

It's not a secret that SaaS applications become more popular these days. Integrations with payment system, relative easiness of development and maintenance makes it attractive for founders. Availability of functions makes it attractive for potential users.

But what about cost? How much should you pay to get bugs-free, maintainable SaaS solution?

First of all, there is no such thing as bug-free solutions, just for your information. But the amount of bugs can be decreased significantly - by different factors that we will consider below.

What others say

There are many research and calculations already done on this topic. For example, SaaSDevelopers agency estimates the development of MVP (minimal valuable product) as a range from $30K to $100K.

Another agency, JHMG estimates uses the different classification: * SaaS tool (standalone SaaS app) - $15K - 100K * SaaS platform (more universal solution) - $50K - 250K

Ryan Shank in Neil Patel's blog tells how he was able to build and run his own SaaS under $40K.

Async Await agency estimates the development of SaaS MVP as low as $10K:

This estimates sounds pretty reasonable except they list many features that a real MVP doesn't need at all and skip others that every MVP should have. What are they?

The functionality every SaaS MVP should have (with estimated hours to develop):

  1. The project infrastructure: architecture linking front-end and back-end code (10)
  2. Database structures and models (10)
  3. Front-end design, layout, and UI (20)
  4. Back-end API to process requests (20)
  5. User authentication (15)
  6. Payments system (20)
  7. Setting up domain, SSL, deployment processes (5)
  8. Error handling, alerts, error pages (10)
  9. Simple user management dashboard (10)

120 hours just to implement the core functionality.

Note, that we skip some functionality that is really important but not for MVP. For example, unit testing can help to prevent problems, but MVP version can survive without it. The same about logging, social logins, and others.

Now, imagine we would like to create a very simple service that would allow to connect to your specific database, show tables (structure and data), and do simple queries on data.

  1. Page for connection settings + API (15)
  2. Page for working with tables + API (15)
  3. Page for doing queries and showing data + API (25)

Totally: 55 hours what is a half of the infrastructure functionality. And if you need something more complicated you would spend 5 - 10 - 20+ times more.

Can you imagine, in some cases, to create an MVP, you have to spend just a third of your time and money on your, core functionality...

Now, let's calculate possible expenses. Say, the average rate of development is about $35/hour (much more in some cases in some countries). So, the base would cost $4,200, and the main functionality - $1,925.

Don't forget the Hofstadter's law that claims that estimation is always wrong even with taking into account this law. In practice, it usually means that you would spend at least 1.5 - 3 times more the time you estimated. So, the expenses would grow accordingly: you can spend $10,000 - $20,000 and more just for core SaaS functionality.

But the good news is you don't need to spend 120 hours and $4,200 to it. If you use the SaaS application templated (called "boilerplate") you can save almost all this money and time. The SaaS boilerplate has several editions , the free version is open-source and allows you to create a SaaS application with all the core functionality except payment, user dashboard, and social login. This version could be perfect for non-profit projects, validation a concepts, and familiarizing with building modern SaaS applications.

The next version is $419 and contains all the core functionality including payment and user dashboard. The payment module is pretty advanced, with it you can:

  • connect your SaaS with your Stripe account and pull the list of plans and have all the interactions (obtaining credit card information, creating and canceling subscriptions);
  • specify different payment scenarios using just several server variables: for example, you can force a user to enter the payment information during the registration process; assign a default plan if no plan is selected; delay with payment until the trial period is gone and others;
  • have all the UI related to payment out-of-box: list of plans; form to enter and verify the credit card information; payment history; current status;
  • obtain the account information about the current user to restrict functionality based on the current plan/payment status etc.

If you would implement all this payment stuff you would add at least $5,000 to your budget.

The most advanced version is pretty pricy ($1,999) and designed for companies with more than 2 developers.

You may ask "Do I still need to know how to code or hire a developer?" Yes, you do. But you can save a lot of money, time, and nerves just using this boilerplate where many functions are already implemented.

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