Custom software for a UK SME typically costs between 40,000 and 120,000 for a complete application. The cost depends on three factors: the scope of features, the number of integrations with existing systems, and the complexity of the user interface. The technology stack matters less than most people think. A well-scoped project with a clear priority order controls cost. A vague scope with constant additions inflates it.
We provide fixed-scope estimates after a discovery session, so you know the cost before committing. This guide explains the cost ranges for common project types and what drives the price up or down.
What Are the Cost Ranges by Project Type?
Different types of custom software have different cost profiles based on complexity, integrations, and user roles:
- Custom CRM: 40,000 to 80,000. Contact management, pipeline tracking, custom workflows, reporting, and integrations with email and accounting.
- Custom web portal: 30,000 to 70,000. Customer or supplier portal with login, document management, and self-service features.
- API development and system integration: 15,000 to 50,000. Connecting existing systems, automating data flow, building middleware.
- ERP replacement: 80,000 to 200,000. Full business management system replacing multiple SaaS tools. See our services for details.
- Mobile app: 30,000 to 80,000. iOS and Android app with backend API and admin dashboard.
- Legacy modernisation: 40,000 to 120,000. Rewriting an existing system with modern technology while preserving data and workflows.
- AI automation: 20,000 to 60,000. Adding AI features to existing processes, such as automated document processing or intelligent routing.
These are typical ranges for UK SMEs with 10 to 250 employees. Projects outside these ranges exist but are less common.
What Drives the Cost of Custom Software?
The cost drivers are not what most people expect. The programming language or framework has minimal impact on cost. The real drivers are:
- Feature scope: More features mean more development time. This is the single biggest cost driver. Every feature adds design, build, test, and documentation work.
- Number of integrations: Each integration with an external system (accounting, email, payment gateway, API) adds complexity. Integrations require understanding the external system, handling edge cases, and maintaining the connection.
- User roles and permissions: A system with one user role is simpler than one with five roles, each with different permissions and views.
- Data migration: Moving data from existing systems into the new software is often underestimated. Cleaning and mapping data takes real time.
- Custom reporting: Standard reports are quick. Custom dashboards with complex calculations and visualisations add cost.
- Compliance requirements: If your software needs to meet GDPR, FCA, or industry-specific compliance standards, additional design and audit work is required. The ICO (Information Commissioner's Office) provides guidance on data protection by design.
How Is Custom Software Priced in the UK?
UK development firms typically price in one of three ways:
- Fixed-scope project: A defined scope with a fixed price and timeline. Best when requirements are clear. Risk: if scope changes, the price changes. Typical day rate: 600 to 1,200 per developer.
- Time and materials: You pay for actual time spent. Best when requirements will evolve. Risk: cost is open-ended without disciplined scope management. Typical day rate: 500 to 1,000 per developer.
- Retainer or dedicated team: A monthly fee for a dedicated development team. Best for ongoing development. Typical cost: 8,000 to 20,000 per month per developer, depending on seniority.
We work primarily on fixed-scope projects for defined deliverables and retainers for ongoing work. The choice depends on how certain your requirements are. If you know exactly what you need, fixed scope gives you cost certainty. If you are building something new and expect to iterate, a retainer or time and materials approach is more honest.
How Do You Budget for Custom Software?
A practical budgeting approach:
- Start with the problem, not the solution: Define what the software needs to achieve, not what features it needs. This helps a development partner scope accurately.
- Prioritise ruthlessly: List every feature you want. Rank them by value. The top 40 percent delivers 80 percent of the value. Build that first.
- Get multiple estimates: Talk to two or three development partners. Compare not just price but approach. The cheapest is rarely the best value. See our guide on choosing a software development partner.
- Include ongoing costs: Budget for maintenance (15 to 20 percent of build cost annually) and hosting from day one.
- Build in contingency: Add 15 to 20 percent contingency for scope adjustments discovered during development. This is normal, not a sign of poor planning.
How Does the Cost Compare to SaaS?
The cost comparison depends on your user count and timeline. SaaS is cheaper in year one. Custom software is often cheaper by year three.
Example: A 50-user team on a CRM at 80 per seat per month spends 48,000 per year. Over five years with 7 percent annual price increases, that is about 276,000. A custom CRM build at 60,000 with 10,000 annual maintenance and 300 monthly hosting totals 139,000 over five years. The custom software saves 137,000 over five years and continues saving every year after.
Use our SaaS ROI calculator to run this comparison with your numbers. For the full framework, see our guide on custom software vs SaaS TCO.
Ready to get a specific estimate for your project? Book a free discovery call and we will provide a fixed-scope quote based on your actual requirements.