How much does it cost to build a SaaS product?

Many corporate leaders aim to boost their income and uncover new opportunities. They frequently wonder about the feasibility of tripling their profits within three years and the strategies to accomplish this objective.
Software as a service (SaaS) has emerged as a known answer for chasing these goals. SaaS, a product type delivered over the Internet, is revolutionizing the functional scene for organizations.
SaaS product development is growing quickly. In 2024, it's anticipated that individuals will spend almost $1 trillion on SaaS products. That is up from $491 billion in 2022, showing a critical increase. This growth draws numerous enterprises to invest in SaaS development, with around 17,000 SaaS organizations in the US in 2022.
Developing a SaaS product can go from $15,000 to more than $100,000, depending upon features, complexity, and target audience. However, investing in SaaS can prompt significant benefits and business growth opportunities.
Software as a Service Global Market Overview
You may be thinking if paying for SaaS is an intelligent idea. Let's see a few numbers. The SaaS market is expected to grow to $328.03 billion by 2027, increasing by around 6.6% every year. But which sorts of organizations are spending the most on these services?
The 2022 SaaS Industry Market Report says that most finance organizations (86%) want to spend more money on automating their process. Nearly as many manufacturing companies (85%) also plan to do this. Healthcare and transportation aren't far behind, with 80% of organizations in each sector also looking to invest in process automation.
Stages of SaaS Product Development and Their Costs: Breakdown
There are various things that affect the SaaS product development. Let's look at each of these things to understand them better.
1. Complexity
SaaS platform complexity refers to its features' intricacies and the application's various user roles. It also reflects the challenges developers face when creating the SaaS.
Although complexity is subjective, we can classify it into four levels: micro, basic, average, and complex. Generally, the more complex a SaaS platform is, the longer it takes to develop. This can also lead to higher costs.
To assist you further, we can provide a spreadsheet detailing the estimated SaaS development costs associated with different levels of complexity.
Complexity |
Average price in $ |
Micro SaaS |
15,000 |
Basic SaaS |
35,000 |
Average SaaS |
60,000 |
Complex SaaS |
1,50,000 |
2. SaaS Product development team
The team assigned to develop a SaaS application fundamentally impacts the overall project costs. For instance, engaging with a local agency might cause greater expenses than outsourcing skilled experts from South Asia.
You can pick a team that lines up with your monetary goals. Engaging freelancers with skills in specific regions like operations, application development, or design could be a financially savvy option in contrast to employing in-house staff.
It's crucial to investigate the advantages and disadvantages of various team structures. As a client, assessing your objectives and choosing the proper team is fundamental to accomplishing your targets.
In summary, the expense to build SaaS Product varies depending on the picked team structure:
Team Type's |
Approximate Costs |
In-House |
$130,000-$140,000 |
Local Agency |
$170,000-$180,000 |
Freelancers |
$40,000-$50,000 |
Outsourcing Agency |
$70,000-$80,000 |
3. Stages of Development
Developing an application includes going through different steps to address the client's issues. The more steps there are, the more costly because each step has expenses and requires investment. Here is a closer glance at the expenses for various phases of application development.
Stage of Development |
Average Hours |
Approximate Prices |
Validation & Planning |
30 to 200 |
$30,000-$75,000 (MVP) |
MVP Creation |
250 to 300 |
$30,000-$70,000 (MVP) |
UI/UX Design |
100 to 220 |
$3000-$5500 |
Front-End |
350 to 550 |
$10,000-$30,000 |
Back-End |
650 to 850 |
$16,000-$56,000 |
4. Geographical location
Geographical location is yet another answer for your concern, “how much does it cost to build a SaaS platform?”
Where the development teams or talented people come from concludes the amount it costs to make a SaaS application, even if the application does the same things. This is a breakdown of how much it could cost to build a SaaS product based on where the teams or talents are located.
Geographical Location |
Approximate Pricing |
USA |
$170,000-$180,000 |
UK |
$140,000-$150,000 |
Eastern Europe |
$50,000-$60,000 |
Western Europe |
$90,000-$100,000 |
Australia |
$110,000-$120,000 |
South Asia |
$40,000-$50,000 |
5. Cost based on SaaS development company
Hiring a SaaS product development company is usually more expensive than hiring just one developer. But it comes with several benefits. These companies have lots of experience and follow a more organized process, especially those focused on SaaS (Software as a Service).
You won't need to check on the work because they can manage themselves constantly.
Expect to pay around half more for a company than an individual developer. For a typical venture, recruiting a developer could cost about $80,000, yet for complex SaaS projects, it could go up to $150,000.
How To Minimize the Cost to Build your SaaS product?
You can save money when starting your SaaS business by:
1. Using free open-source technologies
These tools don't cost much or are totally free. They can lower your expenses for making your product.
2. Outsource development
If you don't have enough people to make your software or products, you can ask another company to do it. Find someone reliable.
3. Try free marketing tools
You can use many useful tools for marketing that don't cost anything or are very affordable. It's an excellent way to save money on advertising.
4. Develop an MVP
Creating a basic version of your product, known as a minimum viable product (SaaS MVP), can save money on development. You can launch quickly without spending too much by focusing on essential features. After it's out there, you can always add more features based on feedback. This approach gets your product to market faster and at a lower cost as well.
5. Keep your team small
Having a small team costs less money compared to having a big team. If you're working alone as the founder, you won't have to spend as much money on running things. So, having a small team to save money is better, especially if you're starting independently.
6. Don't overcomplicate things
The more complex your product is to make, the more money it'll take. So, aim for simplicity to save costs.
Conclusion
Here's everything you want to comprehend about the amount it takes to make your own SaaS platform.
As you've seen, the SaaS cost can contrast depending on the features you need and the complexity of the platform. But if you plan cautiously and work with skilled engineers, you can make an essential variant without spending excessively.
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