Startup Costs: Freelance App Development Business

How much does it cost to start a freelance app development business? The average starting costs are $19.4K.
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If you are planning to start a freelance app development business, the costs are relatively low. This of course, depends on if you decide to start the business on your own or bring on a big team at first.

We’ve outlined two common scenarios for “pre-opening” costs of a freelance app development business and outline the costs you should expect for each:

  • The estimated minimum starting cost = $667
  • The estimated maximum starting cost = $33,119

The average starting costs are $19,368.

See our full guide to starting a freelance app development business ➜

Startup Expenses: Average expenses incurred when starting a freelance app development business. Min Startup Costs: You plan to execute on your own. You’re able to work from home with minimal costs. Max Startup Costs: You have started with 1+ other team members.
Website Costs
Website builder: The cost of your website will vary depending on which platform you choose. There are many website builders on the market, so it's important you choose the right one for your business and overall goals. To learn more about your options + how to build a great website, check out this article. $15 $100
Web Designer: If you have the necessary skills to design your website, then it may not be necessary for you to hire someone. However, if you do decide to go that route, make sure you establish an understanding of upfront cost, design and what the ongoing costs will be to manage the site. Here is what to expect when hiring a web designer. $0 $6,000
Email hosting: Email is a critical piece for running your business. Once you have your domain name, you will want to set up email accounts for each user on your team. The most common email hosts are GSuite (typically starting at $6+ per user, per month) or Microsoft Office (typically starting at $5+ per user, per month). The number of email accounts you set up will determine the monthly cost breakdown. $5 $75
Register Your Domain: Once you decide the name of your business, you will need to make sure the URL is available and purchase the domain. You can check availability and register your domain here. $12 $75
Server Hosting: To start a freelance app development business, you will need to set up and manage a server. The cost for this is typically billed monthly and depends on the platform you choose (typically ranging anywhere from $0-$50/mo). $0 $50
Website chat function: If customer service is a big piece of your business, you will want to consider implementing a chat bot on your website. Typically, there are different tiers of pricing and some businesses even offer freemium services. To find what chat software is best for your business, check out this guide. $0 $75
Total Website Costs $32 (min) $6,375 (max)
Office Space Expenses
Rent: This refers to the office space you rent out for your business. To minimize costs, you may want to consider starting your business from home or renting an office in a coworking space. $0 $2,000
Utility Costs (office space): This refers to the first month's utility bill for your office space. If you are not responsible for this bill, this would not apply to starting your freelance app development business. $0 $150
Office Supplies: Although these may seem like minor costs, things like your desks, chairs, pens, paper, filing cabinets do add up. To avoid these adding up too much, try to be as lean as possible and go paperless! $25 $1,000
WiFi: Whether you work from home or in an office space, WiFi is an expense that's tough to avoid. Although the cost is minimal in most cases, it should be appropriately budgeted for each month! $10 $100
Total Office Space Expenses $35 (min) $3,250 (max)
Business Formation Fees
Small Business Insurance: Depending on which state you live in and the business you're operating, the costs and requirements for small business insurance vary. You can learn more here. $500 $2,000
Trademarking: Filing trademark registration will protect your brand and prevent other businesses from copying your name or product. USPTO has several different types of trademarks, so the cost to apply can vary (typically anywhere from $400-$700). $0 $700
Permit and License Fees: Depending on your industry, there are certain licenses and permits you may need in order to comply with state, local, and federal regulations. Here is an article that goes over all the permits and licenses you may need for your freelance app development business. $50 $700
Lawyer Fees: Although you may want to avoid attorney fees, it's important that your business (and you) are covered at all costs. This comes into play when creating founder agreements, setting up your business legal structure, and of course, any unforeseen circumstances that may happen when dealing with customers or other businesses. $0 $1,500
Set up business: LLC & Corporations: The first step in setting up your business is deciding whether your business is an LLC, S Corp or C Corp. The cost for this depends on which state you form your business + which structure you decide on. We put together an article that goes over the 10 Steps To Setting Up A Business. $50 $500
Obtain a patent: Securing a patent can be a very valuable tool, but it's important that you are 100% sure this will be a smart business move for you, or if you may not be ready quite yet. A basic utility patent typically costs anywhere between $5,000 and $10,000 to file. Here is a great resource to walk you through the entire process. $0 $10,000
Total Business Formation Fees $600 (min) $15,400 (max)
Training & Education Expenses
Online Learning Sites: With a freelance app development business, you and your team may not know all the steps for starting and growing a business. There are plenty of resources out there to help you, such as online courses or learning platforms, but they aren't always free! Starter Story is a great resource for case studies, guides and courses for starting your business. $0 $1,000
Total Training & Education Expenses $0 (min) $1,000 (max)
Advertising & Marketing Costs
Business Cards: A freelance app development business involves quite a bit of customer interaction, whether that is attending tradeshows, sales calls or simply having face to face interaction with prospective clients. Business cards are a great way to stay front of mind with your clients. $0 $50
Total Advertising & Marketing Costs $0 (min) $50 (max)
Employee & Freelancer Expenses
Payroll: This number depends on if you decide to pay yourself a salary upfront and how many employees you have on payroll. At first, many founders take on all responsibilities until the business is up and running. You can always hire down the road when you understand where you need help. Keep in mind, if you do plan to pay yourself, the average salary founders make is $50K. $0 $4,000
IT Support: You may find yourself needing IT support when starting your business. It may not be possible (or necessary) for you to hire someone full-time, but hiring on a freelancer platform such as Upwork is a great way to save money and resources. $0 $500
Other Employee Expenses: Aside from payroll and benefits, there are other costs associated with hiring employees. This includes the cost to advertise the job, the time it takes to interview candidates, and any potential turnover that may result from hiring the wrong candidate. $0 $1,000
Employee Reward Ideas: It's important to recognize and reward employees - whether they hit their goals or are doing an exceptional job. This doesn't have to cost you a lot - simply taking them out to lunch, giving them a gift card or offering a pay-check bonus are all ways to recognize your employee! Here are 65 ways to reward your employees. $0 $500
Total Employee & Freelancer Expenses $0 (min) $6,000 (max)
Software Expenses
Design Programs & Software: These programs might include the Adobe family of design tools: Photoshop, Illustrator, InDesign and others. This is typically a monthly subscription ranging from $10-$50/mo. $0 $50
CRM Software: CRM (customer relationship management) software is used to track your company’s interactions with clients and prospects. Although this is not a necessary tool to have for your freelance app development business, implementing this in the beginning may set your business up for success and save you a lot of time later on. For a full list of best CRMs to use for your business, check out the full list here. $0 $250
Project Management Software: You may want to consider using a project management and collaboration tool to organize your day-to-day. This can also be very beneficial if you have a larger team and want to keep track of everyones tasks and productivity. For a full list of project management tools, check out this full list here. $0 $25
Internal Communication Tool: If you plan to have multiple members on your team, you may want to consider an instant message tool such as Slack or Telegram. The cost is usually billed per month (approx $5/user/month) or there are freemium versions available on many platforms. $0 $20
Social Media Management Tools: If you plan to do social media marketing for your freelance app development business, you should consider investing in a social media automation or publishing tool. This will save you time and allow you to track performance and engagement for your posts. Here is a list of 28 best social media tools for your small business. $0 $50
Accounting & Invoicing Software: When starting your freelance app development business, it's important to have an accounting system and process in place to manage financials, reporting, planning and tax preparation. Here are the 30 best accounting tools for small businesses. $0 $50
Email marketing tool: If you plan to grow your email list and email marketing efforts, you may want to consider investing in an email marketing platform (ie. Klaviyo, MailChimp). We put together a detailed guide on all of the email marketing tools out there + the pricing models for each one here $0 $100
Online data storage: It's important to make sure the information for your freelance app development business is stored and protected should something happen to your computer or hard drive. The cost for this is affordable and depends on how much data you need to store. To learn more about the different options and pricing on the market, check out this article. $0 $299
Payroll Software: The main purpose of payroll software is to help you pay your team and track each of those payments (so that you don't have to do it manually). If you do not have any employees or have a very small team, payroll software may not be necessary at this stage. Here are the 11 best payroll tools for small businesses! $0 $200
Total Software Expenses $0 (min) $1,044 (max)
Total Starting Costs $667 (min) $33,119 (max)

Want to start a freelance app development business?

See our full guide ➜