Software-as-a-service (SaaS) solutions have made an incredible journey over the last decades, going from an exciting new technology to industry mainstays that every major company relies on. SaaS cost of development has evolved as well, giving smaller companies the chance to try their hand at creating their own platforms.
This doesn’t necessarily mean that building a high-quality SaaS solution is cheap, of course. However, you can really cut down on your expenses with structured preparation and an experienced team. In this article, the JetBase team uses our experience and know-how to introduce you to the world of SaaS and its development within a budget.
We’ll break down the cost factors, highlight ways to follow in the footsteps of market leaders, and point out the hidden costs that many companies overlook. As a result, you’ll go into SaaS development knowing what to expect and how to manage it. Plus, should you need our help in practice, JetBase will gladly lend a hand. But before that, let’s talk about SaaS development costs.
Analyzing the Factors That Determine SaaS Development Costs
As with any other type of development, the cost of creating a SaaS platform isn’t a monolithic number. Multiple major factors influence the SaaS startup costs, and we’ll start by taking a closer look at them and how they impact your final product. It’s important to remember that anything that influences the price also changes your solution’s features, look, and usability.
Application Complexity
This is probably the most obvious factor one can name, so we’re putting it first. The more features you add to your solution and the more complex they are - the higher the cost. Plus, the same rules apply to your tech stack. If you’re choosing to use the newest, cutting-edge technologies, be prepared to pay extra and end up with a high budget.
What’s crucial here is finding the right balance between complexity and cost. Gauge whether your audience’s potential response is worth the money you’ll spend on a feature.
In fact, it’s easiest to have a regular solution that works well but has just one killer feature. Most current hits were born as a fairly simple idea, an upgrade to an existing service or a twist on a familiar formula. This is how you can capture a market segment, catering to an audience with one specific feature that will be the selling point.
Choice of SaaS Type
There is plenty of variety among SaaS products as they serve different industries and end-users. Some types have an inherently higher cost of SaaS development, such as enterprise-centric solutions that need high scalability and a wide array of features. On the other hand, software that serves a more straightforward purpose, such as email marketing, will be cheaper to create.
Meanwhile, enterprise resource planning systems will require a lot of investment, both in terms of money and time. So it’s pretty clear that those seeking to make a less expensive SaaS product should choose specific types of software, right?
Well, there’s a little snag here: most companies don’t plan their work like that. You first outline your own capabilities and your target audience and then tailor the rest to those. As a result, you might be better off making ERP solutions if that’s what your team truly excels at. Granted, there is a way around this, and that’s what we’ll talk about next.
Development Team Structure
So the trick to keeping SaaS development cost low regardless of software type is simple. It’s all about picking the right team. We’re not just talking about picking professional developers and designers. What matters most is choosing your approach and whether you want to handle development in-house.
This is the first fork in the road and your core choice: is it going to be cheaper to create your SaaS platform with your own team or give the job to someone else? More importantly, which option will deliver a better product? Any company must assess their staff and determine whether their skills are sufficient to make a hit solution.
If you opt to go outside your own company, the second choice comes - do you go for freelancers, a local company, or an outsourcing team from afar? The third option tends to be the most popular as outsourcing is a years-old model that simply works. Thanks to these teams’ geographic location, their rates will quite often be favorable to you.
Moreover, a good outsourcing company will have years of experience with verified projects, letting you estimate if they can do exactly what you want. Negotiating the exact details of what you want to see is very important when it comes to outsourcing teams. With that in mind, let’s talk about some projects that many companies seek to clone and how much that could cost.
Case Studies: Cost Analysis of Developing Popular SaaS Clones
This section isn’t about pushing you to copy a major product. Instead, we offer a way to measure the approximate cost to start a SaaS company. These are all real-world examples of building a solution that hits the market at the right time and with the right offerings. Perhaps, you will also find some inspiration for your own projects.
Slack
Arguably the world’s most popular corporate communication software, Slack boasts messaging and calls, as well as robust integration capabilities. This makes it a pretty pricey piece of software to copy, regardless of your team make-up and location. On average, creating a clone of something like Slack will take upwards of $70,000, and that’s only for an MVP.
The complexities lie mainly in crafting a high-quality video call processing protocol, as well as enabling flexible integrations. While a skilled team won’t have issues doing it, you’ll certainly have to pay a hefty rate to find professionals that can do it.
MailChimp
This SaaS marketing platform has garnered a huge customer based on its email-centric features and sprawling automation. Despite that, it’s not a prohibitively complex piece of software and, with the right team, could be reasonably created by a new company. Your budget would have to start at around $50,000 for a barebones clone and go up if you want a proper copy.
However, with a solution like MailChimp, it might be best to hop on the bandwagon quickly as AI personalization is driving email marketing upward. You’ll be facing a much tougher market with higher SaaS costs as time goes by.
Pipedrive
Last but not least, a sales-oriented CRM that offers a lot of automation and high-quality data visualization. As a result, it’s gained a solid foothold in the industry and sees a lot of competitors trying to copy it. That kind of solution takes at least $60,000 and upward to clone, though the cost fluctuates depending on how many integrations you build in and how you work with automation.
While we’re obviously not advocating for you to clone any of these, knowing this data is important. This way, you can assess if the price tag given to you by your team is adequate and fits the scope of the project. After all, if you’re making a much less impressive system and it costs you more, it might be worth asking a few questions.
Key Components Influencing SaaS Development Budget
You asked, “How much does it cost to build a SaaS platform?” We gave some estimates based on industry giants. However, the financial side of things doesn’t end once you know the cost and set the project budget. You need to understand which parts of development take up bigger chunks of your budget and how to manage them properly. That’s exactly what we’ll talk about next.
Complexity of Business Logic
This point encompasses almost all aspects of development, from feature complexity to team size to third-party integration. It’s important to understand that these expenses can fluctuate heavily, especially without proper planning. Therefore you should build in a bit of leeway to accommodate newly added integrations or expand your dev team.
Understanding your project’s complexity and its potential to morph and grow as development continues is an essential skill. If you’re able to predict the most likely obstacles and challenges, you can easily adapt to them and keep the budget structured.
UI/UX Design and Its Value
SaaS solutions exist in a constant state of competition, as your entire model relies on essentially selling your software over and over again. That means that a product with a subpar look and feel will not survive long in the market. It’s important to devote a solid part of the budget to your design team and their processes.
When it comes to UI/UX Design:
- Allocate a significant portion of the budget to the design team and their processes to have relevant design.
- AB testing and iterative design are crucial for winning over the target audience.
- Consider current trends and future forecasts to prevent the software's look from becoming outdated too quickly.
A/B testing and iterative design are absolutely essential if you want to be a hit with your target audience. In addition, try to consider current trends and future forecasts, so that the look of your software doesn’t become outdated too fast.
Architectural and Technical Requirements
Here you need to determine what standards your solution seeks to reach. Are you prioritizing scalability? Interoperability with hundreds of third-party APIs? Establishing these demands and meeting them is the whole point of development. But, in budget terms, it’s all about compromises.
Learn to find shortcuts that save a bit of your budget without reducing the overall quality of the product. Sometimes that means leaning on external resources, such as cloud storage providers, other times it’s more about sacrificing one-tenth of your target capabilities to make sure the other nine-tenths are available.
Overlooked and Hidden Costs in SaaS Development
While the SaaS startup budget isn’t difficult to manage when you know how to approach it, it’s important to account for all variables. Before we move on to the last parts of our guide, we want to highlight two key expenses that are often overlooked. Both of these are long-term costs, as well, so including them in your budget is paramount to an accurate cost assessment.
Ongoing Maintenance
It’s no wonder that maintenance is an overlooked cost, as many companies create their products with the hope of perfection. But it’s important to be realistic and understand that technology always moves on. What works now will inevitably run into compatibility or scalability issues later. So remember to bake in the cost of maintenance into your product budget.
Realistically, you can keep these expenses manageable if you’re opting to outsource development. The same team that makes your product can usually offer maintenance services for years to come. This is good because they’ll be intimately familiar with the software and because their rates will likely be quite lucrative, especially for those seeking to keep a tight budget.
Marketing for Success
You don’t want your product to be a hidden gem. A gem deserves to be seen and appreciated and that’s where marketing costs come in. While it’s clear that an advertising campaign at launch is necessary, some companies make the mistake of stopping there. In reality, though, marketing is a long-term endeavor.
When it comes to marketing of your SaaS product remember that:
- Marketing costs are essential to ensure your product gets the visibility it needs.
- Marketing is a long-term effort.
- Invest in marketing campaigns across industry websites, emails, and social media.
- While not every expense needs to be included in the initial budget, leaving room for general marketing expenses.
Keeping your product relevant years down the line means investing in marketing campaigns that span industry websites, emails and social media. We’re not saying every single one of these expenses must be included in the preliminary budget. But leaving room for general marketing expenses lets you spread the word about your SaaS solution and recoup its cost of development.
Strategic Planning for SaaS Development
We’ve emphasized before that the best way to manage SaaS startup costs is to plan ahead. Understanding what to expect from your project lets you prepare for any force majeure and easily navigate the most precarious challenges. Here’s how you can prepare and plan your SaaS development.
Estimating Your SaaS Development Costs
Our previous section mentioned the often overlooked expense categories, but estimation doesn’t stop at just knowing what you’ll be spending money on. For example, you need to assess your team and determine whether you might need extra staff during the dev cycle. These can be useful if someone falls ill or if it becomes clear that your initial deadline is too ambitious.
Similarly, you should have a clear breakdown of what each aspect of the software will take, budget-wise. It’s vital that your entire development process is included, from the very first design sketches to post-release maintenance. This way you can understand exactly what you’re spending money on.
How to Approach Budgeting
One of the best tips (and one that can be difficult to implement) is setting a hard line for expenses. Yes, development isn’t a straight line and you may face some unpredicted costs. But it’s a matter of quality management to have specific limits set on each department’s expenses. By defining these boundaries, you ensure that your team understands the importance of managing their budgets carefully and avoiding mistakes.
JetBase also recommends creating a tier list of all features and technologies you plan to use in your SaaS solution. If it becomes clear that compromises must be made, look at the low-tier parts of the list and consider cutting them. It may be hard to part with certain ideas but determination is key for successfully managing a project’s budget.
Minimizing Costs and Maximizing Efficiency in SaaS Startup Launches
We’ll leave off with a couple of practical pieces of advice. In addition to planning, which we already covered, JetBase always has the same recommendation for SaaS development. Picking the right team will, without fail, save you a lot of money and prevent headaches. You’re paying not only for professional developers but for their understanding of how to navigate tight limits.
To minimize the costs remember:
- Choose the right development team to save costs and avoid complications. Look for professionals who can navigate tight constraints effectively.
- Ensure multiple oversight points to maintain objectivity and clear decision-making.
- Project managers should make timely decisions, like adjusting team size or expanding scope, to meet goals efficiently.
- Outsourcing teams bring valuable experience and expertise, delivering quality within budget constraints.
- Prioritize planning, team selection, and effective project management for successful SaaS development.
In the same vein, we find it essential to have multiple points of oversight. Having one person in charge of the project can cloud your judgment, while a second point of view can offer clarity. These project managers should also make solid judgments within the moment: is it best to cut the team down if the deadline looks easy to meet or, perhaps, expand the scope and try to fit more into the budget?
The whole point of working with an outsourcing team is having experience and knowledge at your disposal, which will make all of the above possible. These teams can stick to a budget while delivering quality, creating SaaS solutions on a budget. And with that in mind, we proceed to the last part of our article.
Ready to Build Your Own SaaS?
Now that you know what determines SaaS development costs and how to keep those expenses manageable, it’s time to get down to business. Perhaps you already have an idea of the project in mind or you’re just pondering what solution could best represent your brand. To get a consultation and move on to the next step, consider JetBase.
Our team has over a decade of experience creating custom software that’s well-optimized and fits the client’s needs to a T. We’ve worked with cutting-edge technologies and platforms, embracing VisionOS before any of our competitors. Whether you seek something that will shake up the market or simply need a polished product, we can deliver it.
Thanks to our extensive portfolio, you can verify our experience, as well as find inspiration for your own project. Our managers will gladly guide your planning stage and provide an estimate of the development cost for free, as well as a budget breakdown. Once our devs get to work, you’ll see why our reputation is spotless and our products are successful. Contact us now to get started.
