How much does custom software cost? An honest breakdown

4 min read

"I need a system to manage our projects/customers/production. What will it cost?"

As a software developer, I hear this question in every initial call. And while "it depends" is technically the correct answer, it's not helpful for your planning.

If you are a mid-sized business (KMU/SMB) looking to modernize a process, here is the honest truth about the numbers.


The short version: Typical price ranges

In my experience with B2B projects for the German and European mid-market, costs usually fall into three tiers:

1. The Focused Tool (€8,000 – €15,000)

This is a solution for a single, clearly defined problem.

  • Example: A tool to automate complex commission calculations that currently take a staff member 3 days a month in Excel.
  • Timeline: 4–6 weeks.
  • ROI: Often pays for itself within 6–12 months through time savings.

2. The Core Business Platform (€15,000 – €35,000)

A central system that maps a main business process.

  • Example: A transaction management system for real estate sales, including a client portal, document management, and status tracking.
  • Timeline: 2–3 months.
  • ROI: Enables growth without adding headcount.

3. The Enterprise-Grade Solution (€35,000+)

A comprehensive platform with deep integrations and complex logic.

  • Example: An ERP-like system that connects production, warehouse, and sales, with live interfaces to existing legacy software.
  • Timeline: 4+ months.

Why is the range so wide?

If you buy a car, the price depends on the engine, the interior, and the brand. In software, the "interior" is what drives the cost:

1. Data Complexity

Are we just saving names and dates, or are we processing thousands of documents, calculating complex tax rules, or syncing data across 5 different systems? Every "edge case" requires logic that needs to be built and tested.

2. Integrations

Does the software need to talk to your existing DATEV, SAP, or Salesforce setup? Standard APIs are manageable; old "legacy" systems without modern interfaces can double the development effort for that specific module.

3. User Groups & Permissions

Is it just for your back-office? Or do external partners, customers, and different departments need different levels of access? Granular permission systems add complexity to both the UI and the database.


The "Cheap" Trap: Why €2,000 offers are expensive

You can find freelancers on global platforms offering to build your app for €2,000. Here is why that is usually a bad deal for a German SMB:

  • Missing Business Understanding: They build exactly what you say, not what you need. A professional partner asks "Why?" and "Does this process even make sense?" before writing a single line of code.
  • Maintenance Debt: Cheap code is often "spaghetti code." It works today, but when you want to add a feature in 6 months, the whole house of cards collapses.
  • No Handover: Will they be there in a year when your server needs an update? Do they provide documentation so another developer can take over?

How to get a predictable budget

I don't believe in "open-ended" billing for SMB projects. It creates a conflict of interest. Instead, I use a two-step approach:

Step 1: The Initial Call (Free)

30 minutes to understand your goal. I can usually give you a "ballpark" range immediately. If your budget is €5k and the project is clearly a €20k endeavor, I will tell you honestly.

Step 2: The Analysis Phase (€2,500)

For complex projects, we don't start coding immediately. We spend a week defining requirements, architecture, and risks.

  • Result: You get a detailed technical concept and a Fixed Price Proposal.
  • Benefit: The risk is on me. If I underestimate the work, you still pay the agreed price. If we decide not to proceed, you keep the concept and can use it with any other developer.

Is it an investment or a cost?

The best way to look at the price is the "Schmidt Factor":

If Mr. Schmidt in your office spends 10 hours a week manually copying data from Excel to your CRM, that costs you roughly €15,000 per year (including employer social contributions).

If a €15,000 software completely automates that task, your ROI is 100% in the first year. Every year after that is pure profit.


Ready for a real number?

If you want to know what your specific project would cost, let's talk. No sales pitch—just a technical assessment of your requirements.

Schedule a free consultation

Still fighting manual processes?

Modernizing your business is a journey. If you need a technical partner to navigate it, I'm here.