Crunching Numbers: The Costs of Launching a SaaS Biz Mobile App

Introduction

The global mobile application market size is estimated to be valued at US.33 billion in 2017 and is expected to skyrocket to US2.71 billion by 2023. However, just like with any business venture, there are various associated costs to consider before entering.

To open a successful mobile SAAS business, entrepreneurs require spending and budgeting accordingly. In this article, we will discuss the different and essential start-up costs that an aspiring businessman should consider. We’ll also explore various practical and cost-effective ways to maximize your budget and maximize your potential sustainability in this booming market.

start-up costs

Starting a mobile SaaS business is undoubtedly expensive, with an estimated initial cost of around ,000 to ,000. Below is a list of some of the typical start-up costs that should be considered when establishing this type of business.

In addition to these start-up costs, it’s important to remember the ongoing costs associated with running a business. These may include support staff and updating existing software and hardware. Additionally, selecting the right pricing model for your business and marketing it effectively should be taken into consideration for the long-term success of this type of business.

Legal fees

When starting a mobile application SaaS business, it is important to consider the associated legal fees. Even starting a small business requires you to make important legal decisions, from deciding on the best business structure, to registering the business with regulatory bodies and getting advice on possible responsibilities.

The costs for these services vary widely depending on the type of advice you get, the complexity of the legal setup, the country of incorporation, etc., but generally the legal cost to open a mobile app SaaS business can range from 00 to ,000.

According to the latest figures from Statista, the average legal fee for launching a mobile app SaaS business in the United States was ,500 in 2019.

The cost of legal services also varies depending on the size of the business. For example, a small business can obtain a wide variety of services such as setting up a corporate entity, drafting contracts, registering the business with tax authorities and more, often at a cost of less than a bigger business.

Outsourcing certain legal processes can also be a cost-effective way to start a mobile app SaaS business. Many companies offer legal services at an hourly rate. This can be useful if you only need a few hours of legal advice or help with a few specific tasks.

Mobile Application Development Platform License

Developing mobile apps with a service like a mobile app development platform requires a license. The annual fee depends on the number of users and features required. The cost of the license varies according to the features and services offered.

The average cost of a mobile app development platform license for a single app in 2020 is around ,558 . This cost can go as low as ,000 for a basic application with limited functionality and up to 0,000 for advanced software with a large number of features.

When choosing a mobile app development platform, be sure to ask about the details of any licensing options available. In most cases, you will be able to choose between a one-time license that covers the development cost of a single application or an annual subscription with all updates included.

Here are some common pricing models for getting a mobile app development platform license:

• Pay-as-you-go (Payg): You pay per user per month and have access to unlimited features.
• Perpetual subscription/license: You pay annually and receive all updates during the year.
• Per app license: You pay per app and the cost of each app depends on the features used and the number of users.

The cost of a mobile app development platform license depends on how many features you want to include in your app. Depending on your needs, you may have more than one option when it comes to obtaining a license. Be sure to research the different licensing models and find the best one for you.

Server infrastructure setup

Establishing a server infrastructure is an important step in launching a mobile application SaaS business. The cost of setting up the server infrastructure will depend on the size and scope of the business. Factors that need to be considered include software license fees, hardware costs, storage, data connectivity, and hosting costs. It is important to plan ahead to ensure the infrastructure is efficient and cost effective.

Costs for setting up an on-premises server typically range from a few thousand to several thousand USD, depending on the server configuration. This cost usually does not include software license fees. For cloud-based servers, costs could range from several hundred to several thousand USD per month per server. Data connectivity charges can range from a few hundred to several thousand dollars, depending on the type and amount of data.

Storage costs can range from several hundred to several dollars per gigabyte per month, depending on the type of storage used (such as S3, block storage, or object storage).

Hosting costs can range from several hundred to several thousand dollars, depending on the type of hosting used and the number of users. For example, a cloud-based hosting solution such as Microsoft Azure typically ranges from several hundred to several thousand dollars per month, while a dedicated server typically costs several hundred to several thousand USD per month.

The cost of setting up server infrastructure can be a major factor when opening a mobile application SaaS business. It is important to weigh the cost of the infrastructure against the expected benefits to ensure the setup is cost effective and efficient in the long run.

Infrastructure maintenance and support

The cost of infrastructure maintenance and support (IMS) will vary depending on the type and size of business you are running. Generally speaking, IMS costs will include things like hosting and server fees, maintenance, upgrades, and desktop support. For a mobile application (or SaaS) company, these costs can range from around ,500 to ,500 per month , depending on the complexity of the infrastructure and the support needed. This includes all costs associated with maintaining the system functional, optimized and secure.

Companies that run mission-critical applications, or those that need more comprehensive support and upgrades, will often face higher costs. For example, PayPal reported an IMS budget of 2 million in 2017, and Amazon spends around 0 million per year on IMS.

In addition to the costs associated with keeping your system operational, there may also be additional costs associated with deploying and maintaining critical system upgrades or mitigating security risks that may arise. These costs will vary depending on the size, complexity and specific needs of the business. In 2017, average spending on infrastructure security exceeded .6 million, according to Gartner.

Finally, when running a mobile application (or SaaS) business, it’s important to remember that the costs associated with infrastructure maintenance and support are ongoing expenses. Companies must be prepared to allocate ongoing funding for the ongoing maintenance of their system to ensure that their applications continue to be reliable and secure.

External hosting services

Starting a mobile app SaaS business typically requires external hosting services for content storage and delivery. Costs for external hosting services vary depending on the scope of your SaaS application and the type of service you use. However, as cloud computing and SaaS hosting services have become more and more affordable, more and more companies are able to start a SaaS business. In 2021, the average cost of external hosting services for SaaS businesses ranges from 0-0 per month .

Depending on your particular usage and storage needs, many external hosting services provide a wide range of pricing plans to choose from, so it’s important to take some time to research the pricing associated with various hosting services. external hosting to ensure you get the best value for your money.

You should also consider the features of the external hosting service and whether they meet the needs of your SaaS application. For example, popular external hosting services typically provide varying levels of scalability, secure hosting, and support services, including database administration, troubleshooting, and technical support.

Some external hosting services also offer additional features such as uptime guarantee, content delivery network optimization, automated firewalls, and disaster recovery plans. These features can add to the cost of the external hosting service, but can also provide valuable security and reliability benefits for your SaaS business.

API documentation and support

Building a mobile app that succeeds and stands out from other apps requires reliable and comprehensive API documentation and technical support. As a mobile application SAAS business developer, you must keep up with ever-changing industry technologies. This is where API documentation and technical support comes in and is one of the expenses you will incur while launching your mobile app.

As of 2021, the costs associated with API documentation and support are considered to be among the highest costs of a mobile app SaaS business launch and development. Depending on the complexity of the project, costs can often start at around ,000 and can go as high as 0,000+ . Some of the services contained in this fee are:

• Provide technical support to application developers and users
• Writing, editing and maintaining necessary web/API documentation
• Guidance on app design, security, and feature selection
• Test and debug existing and new features

The costs of integrating APIs into the system, having a technical team available for all conditions, the cost of additional software and tools, and the cost of maintaining documentation are all factors to consider when launching your SAAS business. of your mobile app. It’s also important to consider any additional support or functionality, including customer service and technical support options, outcome-oriented documentations and user manuals, and a support roadmap and continuous updates.

All in all, when starting a mobile app saas business, be sure to consider the costs associated with API documentation and support to ensure your app’s success.

User experience research and design

User experience (UX) is one of the most important factors when it comes to developing a successful mobile app. This involves understanding the needs and wants of the app user, how they will access the app, and how the app should look and feel. User Experience Research and Design (UXRD) is the process of collecting and analyzing user data to create an application that meets their needs and expectations. This process may include research to understand user behavior and preferences, user testing, and creating user interface designs.

The cost of researching user experience research and design depends on the level of complexity of the user’s needs and the size of the development team. The average cost of UXRD can range between ,000 and ,000, with additional costs on user testing and focus groups. This cost should be taken into consideration when creating a budget for mobile app development. Additionally, it is important to note that UXRD is often a necessary process for mobile application companies seeking to optimize mobile applications for user adoption, positive experiences, and device adaptations.

Statistical information

• The average cost of UXRD ranges between ,000 and ,000.
• Additional costs may be incurred for user testing and focus groups.
• UXRD is essential for companies looking to optimize mobile applications.

Software testing and quality assurance

When venturing into the world of software-as-a-service (SAAS) software software testing and quality assurance should not be overlooked. Without thorough testing, users can experience unexpected bugs and errors, hurting your brand and driving customers away. In 2019 , the Global Software and Quality Testing Market was estimated at billion . According to Statista, the market size is expected to maintain a CAGR of 10.5% in the period 2020-2025, reaching .37 billion by the end of 2025 .

When budgeting for software testing and quality assurance services, there are several factors to consider. The size and complexity of the code, the development platform, the scope of the project, and the number of tests required are all important variables that determine the cost.

Software testing and quality assurance involves several sets of activities and within each activity there are different types of testing. There are Unit Tests, Integration Tests, Functional Tests, System Tests, Stress Tests, and Regression Tests . Depending on the scope of the project and the risk/significance of the features being tested, the cost for each type of testing differs.

Running tests manually can be done by in-house testers, but this process is quite labor-intensive and can be quite expensive. Using automation can help increase the speed, scope, and accuracy of testing, which in turn can help your business ensure that

For small to medium SaaS businesses, the cost of automated testing can range from ,500-,000 depending on the level of complexity of the project and the type of testing required. For larger projects, the cost could exceed ,000 .

Ultimately, software testing and quality assurance can be one of the biggest expenses in the product development lifecycle. To ensure a successful launch, find a reliable QA provider and allow them to create a bespoke test plan for your project.

Setup and marketing support

Starting a mobile app SaaS business isn’t free. It takes money to get started and keep running, and setup and marketing support costs will likely be a big part of the budget. It’s possible to get started successfully without spending top dollar, but it’s wise to expect that taking a preventative approach can help the business succeed faster. Here, we’ll look at current statistics on setup and marketing support costs.

Initial entry costs

Referral costs can vary greatly depending on the scale and scope of the business. Small businesses should expect to pay between ,000 and ,500 for initial start-up costs, while larger companies looking to fully establish themselves in the market can pay up to ,000. This initial budget should cover expenses such as creating and filing incorporation documents, website design and hosting, business license fees, trademark registration fees, and fees associated with processing payments.

Marketing and Advertising

The marketing and advertising setup could range from a few hundred dollars to well over 0,000, depending on the scope of the advertising. This portion of the budget will be used to pay for advertising space, including setting up display ads on websites and search engine advertising campaigns, as well as other advertising methods; Market analysis, campaigns and market research; writing, graphic design and production of marketing materials; SEO and SEM setup; Website and blog optimization; social media setup; and send email campaigns.

Market research

• Target audience and keyword research: ,000 – ,000
• Paid Marketing Research Surveys: ,000 – ,000
• Analytics setup and continuous monitoring: 0 – ,000
• Marketing Consulting Tips: 0-0/hour

Support services

Businesses need operational support to perform sales and customer service and keep operations running smoothly; And support staff can come at a cost. The most popular methods are to hire internally or outsource to a third party. Costs associated with hiring support staff can range from ,000 to 0,000 depending on the scope of operations and the number of people required.

Ongoing costs

• Marketing and advertising: ,500 – ,000/month
• Market research: ,000 – ,000/month
• Support services: ,000 – ,000/month

In conclusion, the cost of opening and launching a mobile application, like the SaaS business, can range from a few hundred dollars to over 0,000 for the complete configuration. It’s wise to be realistic about your budget and be prepared to invest in setup and marketing support.

Conclusion

Opening a mobile app SaaS business can be a daunting and expensive process. All of the costs associated with building an application from scratch, from legal fees to software testing and quality assurance, add up quickly and can be extremely difficult to manage and budget for.

Setting up a mobile app SaaS business requires immense creativity and innovation, as well as a significant ability to forecast market trends, so it’s essential to fully consider all associated costs before diving in. Entrepreneurs should also take advantage of various profitable measures that can be tailored to their specific needs and goals.

Although there are many costs to consider, if a comprehensive plan is implemented and managed correctly, the potential gains can be enormous. By consciously considering the associated costs and budgeting accordingly, entrepreneurs can ensure that their mobile app SaaS business is well capitalized and poised for success.