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Points to Consider When Planning the Budget for On-Demand Mobile App

Posted By Praveen Joshi on 20 May 2020
Points to Consider When Planning the Budget for On-Demand Mobile App


In this digital age, goods and services are at people’s fingertips with the use of mobile internet. The ability to receive a product or service with just a few clicks on your smartphone saves all the time and effort required to procure it from a vendor personally. Often you find better availability and variety among products coupled with great offers in the online market. Thus, it is no surprise that On-Demand Mobile Apps have carved such a niche in today’s world. A study by forecasts that the Global Online On-Demand Services market expects growth at a rate of almost 53% to a revenue of USD 1574.86 Billion between 2020-2024. On-demand Mobile Apps cater to several market domains like food ordering, logistics, healthcare, education, beauty/grooming, laundry, fitness, taxi services and many more, where they have managed to surpass the traditional business models. According to Statista, Uber has more than 100 Million monthly users worldwide, and the company generated net revenue of USD 14 Billion in 2019.

Similarly, the famous On-Demand company Airbnb was valued at USD 38 Billion in 2018. The success of such companies bears witness to the profitability of the market and highlights the benefit of venturing into the domain. Though any successful venture relies on proper planning and an essential aspect of this is Budgeting. 

Sticking to the right budget plan is vital as it helps you:

  • Figure out your goals
  • Prevent unnecessary expenditure
  • Keep out of debt
  • Prepare for emergencies
  • Keep track of progress 

Here are some points to consider while planning the budget for On-Demand Mobile App.

Understand the structure of the App

The user and the service provider have different requirements. Hence the App will provide varying experiences and functions for each role. 

The User App will have an interface with features such as search bar for products and services, order history, order tracking, map navigation, pricing details, product recommendations etc. The cost of developing a basic one typically ranges from ten thousand to fifteen thousand dollars. 

The Service Provider App has sections for use by the vendors such as profile, active orders, chat and customer support, pricing, etc. The expected cost of development usually ranges from six thousand to eight thousand dollars. 

An Admin Panel to efficiently control and manage the service providers and users, which usually costs from four thousand to five thousand dollars. 

Identify your Market

Presently there are three major markets for On-Demand Mobile Apps: Transportation, Food Delivery and Home Delivery Service. Once you’ve chosen it, you can focus on the challenges of the particular market instead of wasting efforts on irrelevant issues. 

Target your User Base

After deciding on the market, research about the people expected to use your services so you may provide them with a better experience and convenience. It includes considerations like their interests, ages, taste, income and expectations. You are also expected to know and stay updated with the latest market trends.

Decide the App Platform

It would help if you decided whether the App will cater to a specific operating system (usually IOS or Android), or the App will be compatible across multiple Operating Systems. Single Platform Apps (Native apps) are generally cost-effective and faster to deploy, but they cater to a far limited audience. Whereas, Cross-Platform Apps are expensive but have a large user base. 

Whether to develop In-House or to Outsource

As In-House development allows close coordination with the team, it gives you the freedom to explore and add/ remove features as per the demand. 

But it can prove costly with all the extra salaries, rent, software licenses and more. 

Outsourcing removes this overhead, but you may not be proactively involved in the app development.

If Outsourcing, thorough research about the Mobile App Development Company should be done based on cost, reviews, quality of service, outsourcing model(hourly pricing or fixed pricing), experience and expertise. 

Make a Product Requirements Document (PRD) Sheet

A PRD is a technical document that covers the entire app development cycle, the details of each phase(such as back-end development, testing, architecture, etc.) and the expected outcomes. It allows a better estimation of costs at each stage for them to be included in the overall budget. 

Keep the Maintenance and Update Costs in Mind

For smooth running, various costs are incurred regularly, like paying a third party for certain services etc. Based on features and services, these costs may vary and prove significant in the long run. Additionally, new features and technological advancements might require incorporation in the App. The budget has to accommodate costs related to such issues. 

Consider the Marketing Expenditure

Marketing enables you to create awareness and gain user-base effectively. Better marketing gives you an edge over the competition; hence marketing should be a focus, and the budget should include this expenditure. 

Determine the right features

When it comes to On-Demand Mobile Apps, adding features affects the cost significantly, and unnecessary features might make it complicated. Alternately, skipping certain features could make it boring, and even change the app usability. A balance should be struck in choosing features without overlooking the essential ones. 

Here's a list of the must-haves:

  • User Registration/ User Profile
  • Vendor Profile
  • Tracking and Map Integration
  • Preference Filters
  • Seamless Payment Process
  • Comments/Ratings/Reviews
  • Query Resolution and Support (phone, chat, email).

On-Demand Mobile Apps connect the users to their desired services while delivering gratification and superior shopping experience. They are expected to flourish in the years to come and become a vital part of our lives. Going by the trends and success stories, venturing into this domain is a feasible proposition. You can have an In-House team or might decide to source the Mobile App Development Services, but cost considerations are vital, and a thorough budget needs to be planned based on all the highlighted points.

Praveen Joshi

Praveen Joshi

Praveen is a seasoned IT Solutions Leader and Director at RSK Business Solutions, a technology-driven IT Consulting Company that specializes in Bespoke Software Development, Agile Consulting, Mobile App Development, Smart Sourcing, and much more. For the last 17 years, he has been delivering quality custom IT solutions that help businesses achieve their goals.

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