The Question Everyone Asks, Nobody Answers
“How much does custom software cost?” Search that phrase and you’ll find a hundred articles that say “it depends.” Technically true. Completely unhelpful.
We’re going to give you actual numbers. Not because every project costs the same, but because you deserve ballpark figures before you commit to a single meeting.
The average custom software project for an SMB runs between EUR 50,000 and EUR 250,000. That’s a wide range. By the end of this post, you’ll understand what pushes a project toward either end.
Realistic Price Ranges by Project Type
| Project Type | Typical Range (EUR) | Timeline |
|---|---|---|
| Internal tool or dashboard | 50,000 - 100,000 | 3-4 months |
| Customer-facing portal | 80,000 - 150,000 | 4-6 months |
| SaaS platform (MVP) | 80,000 - 300,000 | 6-12 months |
| Mobile app (iOS + Android) | 40,000 - 120,000 | 4-6 months |
| AI integration pilot | 15,000 - 30,000 | 4-8 weeks |
| Full AI integration | 30,000 - 80,000 | 2-4 months |
These ranges assume a mid-market European development partner charging EUR 100-150/hour. Agencies in Western Europe (Germany, UK, Nordics) sit at the higher end. Central and Eastern European teams average EUR 50-70/hour with comparable quality.
What Drives Cost Up
Not all projects are created equal. Here’s what makes the number climb.
Complexity of business logic. A simple CRUD app with five screens costs a fraction of a workflow engine with conditional branching, role-based permissions, and real-time notifications. More rules, more code, more money.
Number of integrations. Every system your software talks to adds cost. A tool that connects to your ERP, CRM, payment processor, and email service requires four separate integration layers.
Each one needs building, testing, and maintaining. Integrations are where budgets quietly expand.
Compliance requirements. GDPR data handling, audit trails, encryption at rest, and right-to-deletion workflows don’t come free. Healthcare, finance, and government projects carry a 20-40% compliance premium.
Design scope. A functional internal tool can use a component library and skip custom design. A customer-facing product needs UX research, prototyping, and pixel-perfect implementation. That adds 15-25% to the total.
Timeline pressure. Need it in 8 weeks instead of 16? Expect a premium. Compressed timelines mean larger teams and less margin for iteration.
What Drives Cost Down
You have more control than you think.
Clear requirements save tens of thousands. One client came to us with a 12-page document mapping every screen, user role, and edge case. Their project came in 30% under budget.
Another client said “we want something like Salesforce but simpler.” Their project went 40% over. The difference wasn’t the project. It was the clarity of the starting point.
An MVP approach cuts scope by 40-60%. Don’t build all 47 features from your wish list. Build the 5 that solve 80% of the problem, then launch, learn, and iterate.
Our MVP vs. full build guide covers this in detail.
Reusable components accelerate development. Authentication, admin panels, notification engines, payment processing. Good agencies have these built already. You shouldn’t pay to reinvent the login page.
The Hidden Costs Nobody Mentions
The sticker price is just the beginning.
78% of total software cost happens after launch. Maintenance, updates, scaling, bug fixes, security patches. This is true for custom software and SaaS alike.
Budget 15-20% of your build cost annually for maintenance. A EUR 100,000 build needs EUR 15,000-20,000/year to stay healthy. Skip this and you’ll have a decaying codebase within 18 months.
Hosting runs EUR 200-2,000/month depending on scale. Cloud services (AWS, Hetzner, Azure) charge by usage. Start small, scale as needed.
Training and onboarding take 2-4 weeks. Your team needs to adopt new workflows. Factor this in.
Then there’s the cost you never see on a quote: the hidden costs of cheap development. A EUR 30,000 project that needs rebuilding after six months because the code is unmaintainable actually cost you EUR 60,000 plus half a year of lost time.
Hourly Rate vs. Fixed Price vs. Retainer
Three pricing models. Each with trade-offs.
Hourly rate (time and materials) means you pay for actual hours worked. Best for projects with evolving requirements. Risk: scope can expand without clear limits.
Typical rates run EUR 100-150/hour in Western Europe, EUR 50-70 in Central and Eastern Europe.
Fixed price means defined scope, defined cost. Best for well-specified projects where requirements won’t change. Risk: the agency builds in a buffer for their uncertainty.
Monthly retainer means ongoing partnership with a set number of hours per month. Best for continuous development and maintenance. Risk: you pay whether you use the hours or not.
Our recommendation: start with a fixed-price discovery phase (2-4 weeks, EUR 5,000-15,000), then move to time-and-materials for the build. Clear budget for exploration, flexibility during development.
How to Budget Realistically
Here’s the framework we give every client.
Start with the build estimate. Get 2-3 quotes from qualified agencies. Ignore the outliers. The median is your baseline.
Add 20% contingency. Every project encounters surprises. A 20% buffer turns surprises into plan changes instead of budget crises.
Plan for Year 1 maintenance at 15-20% of build cost. Plan for hosting at EUR 200-2,000/month. Plan for at least one feature iteration post-launch at 10-15% of build cost.
So a EUR 100,000 project really costs about EUR 130,000-140,000 in year one. That’s not a hidden cost. That’s what software costs to own.
The ROI Frame That Actually Helps
Stop comparing build cost to SaaS sticker price. Compare total cost of ownership over 3 years.
Say your current solution costs EUR 3,000/month in SaaS fees plus EUR 4,000/month in manual labor for workarounds. That’s EUR 84,000/year. Over 3 years: EUR 252,000 (and SaaS prices rise 8-12% annually, so it’s actually more).
A custom solution at EUR 100,000 build plus EUR 20,000/year maintenance plus EUR 6,000/year hosting totals EUR 152,000 over the same 3 years. And it does exactly what you need.
Which number is bigger? That’s the only math that matters.
One manufacturing client ran this calculation and found their seven-tool SaaS stack cost more over 3 years than a custom replacement that eliminated 15 hours per week of manual data entry. Payback period was under 12 months.
German Market Specifics
If you’re building in Germany or the DACH region, a few additional factors affect pricing.
German developers command EUR 90-150/hour, among the highest in Europe. DSGVO (GDPR) compliance is non-negotiable, adding 10-20% for data handling architecture. And if you’re in a regulated industry, NIS2 requirements (adopted December 2025) add another layer of security architecture.
The upside? The KfW offers digitalization loans specifically for software development projects. The ERP-Digitalisierungskredit covers up to EUR 25 million at subsidized rates. If you’re investing in custom software, check whether your project qualifies before you start.
For more on when custom makes sense, see our complete guide to custom software development and build vs. buy framework.
Want a realistic estimate for your project? Get a build strategy in 48 hours. It’s free and includes a transparent cost breakdown tailored to your specific situation.
