What Does Custom Software Cost? An Honest Breakdown for SMEs

“What will it cost?” is almost always the first question, and “it depends” is the most frustrating answer. It does depend, but not in a mysterious way. The price of custom software comes from a handful of factors you can estimate yourself, before you ever speak to a developer.

In this article I show where the money goes, which choices push the price up or down, and how to read a quote without getting surprised later.

You pay for time, not lines of code

Almost every quote is ultimately an estimate of hours or days, multiplied by a rate. Freelance developers in the Netherlands roughly charge between €70 and €120 an hour; agencies are often higher because account management and overhead come on top. Rates differ, but the biggest gap between two quotes is almost always the number of hours.

And only part of those hours go into programming. A realistic split on an average project:

• Working it out: which screens, which data, which exceptions. Often 10 to 20% of the work.
• Building: the functionality itself, including tests. The largest part, around 50 to 60%.
• Integrations and data: connecting existing systems, moving old data across. Often underestimated.
• Finishing: hosting, security, handover, documentation and the first weeks of adjustments after launch.

Five factors that set the price

1. How many kinds of users

A tool only your team uses is simpler than a portal where customers, suppliers and administrators also log in. Every role brings its own screens, permissions and edge cases.

2. Connections to other systems

Every outside party (your accounting package, a webshop, a marketplace, an ERP) is a small project of its own: learning the API, handling failures, and keeping it working when the other side changes something. One well-documented integration is manageable; five integrations with old systems are not.

3. How unusual your process is

Standard pieces like login, user management and exports are quick to build with modern frameworks. The time goes into the rules only your business has: the pricing calculation with three exceptions, the approval step that is sometimes needed and sometimes not.

4. Existing data

Moving twelve years of spreadsheets into a clean database is usually more work than expected, because real-world data is messy. Duplicate customers, empty fields, three spellings of the same product name.

5. Uptime and security requirements

An internal tool that can be down for an hour is different from a payment flow that must always run. Higher stakes mean more testing, monitoring and more careful hosting.

What you can roughly expect

Every situation is different, but these rough ranges help set expectations:

• A focused fix or small automation (a report, an import, a bug in an existing system): often under €2,000.
• A single integration or a small internal tool: usually between €2,000 and €10,000.
• A complete web application or the first version of a SaaS product: from €10,000, and with several roles and integrations quickly a multiple of that.

Treat this as orientation, not a price list. A good quote works it out for your situation and explains where the hours go.

How to keep the cost under control

• Start with the core. Which part of the process costs the most time or causes the most mistakes today? Build that first, and extend once it works.
• Share real examples. An actual export, a screenshot of your current spreadsheet, a sample invoice. Concrete input saves hours of assumptions.
• Use standard pieces where you can. Not everything needs to be custom. Payments, email and authentication are solved problems.
• Count the cost of doing nothing. If your team spends eight hours a week retyping data by hand, that is a cost you can put next to the quote.

How to read a quote

Look at what is out of scope, how changes are handled and what happens after delivery. A low price without a clear description often gets expensive the moment the first “that wasn’t included” comes up. Also ask who actually does the work: the person who wrote the quote, or someone you will never speak to.

With me you get scope, timeline and price in writing before we start, and the person who estimates the project is the one who builds it. Want to know roughly what your idea would cost? A 30-minute call is usually enough for a first estimate.