How Much Does It Cost To Start A Crm Business? (In 2024)
Looking to start a CRM business?
But curious about:
- how much it costs to start a CRM business?
- what are the typical CRM business startup costs?
- or the actual cost of starting CRM businesses?
Well, we have the data to prove it, supported by real CRM businesses and how much they actually cost to start.
Let's go over it.
What is the average cost of starting a CRM business?
Based on our data reported by actual CRM business founders, the average cost of starting a CRM business is between $500 and $1,000,000.
Additionally, our data shows that the the median startup costs for a CRM business are around $60K.
Remember, though, not all CRM businesses are the same - and neither are people's budgets. It's important to distinguish between different levels or types of CRM businesses
Real World Examples: How much does it cost to start a CRM business?
We asked real CRM business founders and business owners how much it actually cost to get started?
Here is what they said:
Lars Helgeson
Founder of GreenRope ($160K/month)
"It took 2 years of development before we had a minimum viable product (MVP)."
Lars Helgeson is the founder of GreenRope, a CRM and marketing automation platform that started in 2000 and has grown to serve over 1,000 customers in more than 20 countries.
Erick Vargas
Founder of Followup CRM ($60K/month)
"Another aspect to consider when launching a business is time and resources. In our case, it took close to 8 months to make a suitable version of our product and be able to sell it to the public with just two developers in the team."
Erick Vargas is the founder of Followup CRM, a CRM business tailored for the construction industry that helps companies organize sales, convert more leads into jobs, and win high-margin bids.
Pierrard
Founder of Efficy ($2.1M/month)
*"With one colleague, Robert Houdart, we offered to buy our former company and we were supported by a business angel. We kept learning about CRM... In 2005, we sold this first company and left with some money and the idea to create a new company just afterward. We wanted a European CRM solution highly customizable, easily upgradable and 100% SaaS-based. Here we had our specifications! We just had to do it… Concerning our financial situation, as I wrote, we had some money in our pocket after the first exit. That’s an important point in my opinion. On my side, I chose not to get paid during several months but this might not be possible in every situation: in my opinion, financial comfort (=not having to worry about paying the mortgage or food, nothing too fancy!!!) is important when you create your own business." *
Cédric Pierrard is the founder of Efficy, a CRM software company that has grown to dominate the European market with its customizable and efficient CRM solutions.
Sunny Paris
Founder of noCRM.io ($220K/month)
"We used probably 80k€ to get a product and 500k€ to break even."
Sunny Paris is the co-founder of noCRM.io, a Lead Management Software business launched in 2014 that has grown to $2.4M in annual recurring revenue and $200K in average monthly revenue.
John Cheney
Founder of Workbooks CRM ($50K/month)
"Knowing we would need to invest several million pounds into the business before we would even make any sales, we put together an investment document and presentation and then pretty much hit the road trying to raise seed capital."
John Cheney is the founder of Workbooks, a cloud-based CRM and business application platform that started in 2008.
Oleksii Avramenko
Founder of EspoCRM ($30K/month)
"There were only three of us and we bootstrapped our startup by equally investing our own savings into it."
Oleksii Avramenko is one of the founders of EspoCRM, an open-source CRM application that helps businesses with sales, marketing, and support functionalities.
Abhishek A Agrawal
Founder of CompanyHub ($40K/month)
"The MVP took just 2 weeks to build and cost only $400. I registered the domain and it cost $12.99. It really didn't cost much."
Abhishek A Agrawal is the founder of Integrately, a 1-click integration platform, and CompanyHub, the world's easiest CRM, which helps users automate their processes efficiently.
Chris Garbacz
Founder of Studio Ninja ($150K/month)
"We started work in August 2015 and by February 2016 we were ready to launch version 1 of Studio Ninja to the world, and we were also very broke."
Chris Garbacz is the co-founder of Studio Ninja, a photography business management app that helps photographers manage their leads, clients, shoots, invoices, and more.
Rahul
Founder of TeleCRM ($5K/month)
"It was costing us $2500/mo."*
Rahul is the co-founder of Flamon Cloudtech, which owns TeleCRM, a CRM software company helping salespeople manage and streamline their processes.
Rohit Gadia
Founder of OneHash, Inc. ($12K/month)
"OneHash's journey began like any other startup's: with a two-person team and a modest investment of $2 million from their savings."
Rohit Gadia is the co-founder of OneHash Inc, a SaaS business that provides CRM and customer support solutions particularly for small to medium-sized enterprises (SMEs).
Enjoyed reading these real world examples?
Our platform is full of case studies of successful CRM businesses that you can learn from.
Starting a CRM business - what you should know:
Getting a CRM business off the ground involves various costs, but understanding the nuances can help you manage your budget effectively.
Initial Development Costs
Developing a CRM solution from scratch can be highly costly. On average, the initial development can cost anywhere from $50,000 to $150,000, depending on the complexity of the features and integrations. Opting for a minimum viable product (MVP) with essential features can significantly reduce initial expenses, potentially bringing costs down to the $20,000 to $50,000 range.
Operational Expenses
Once the CRM is developed, you'll need to account for operational expenses. This includes server costs, which can range from $500 to $3,000 per month, depending on traffic and data storage needs. Additionally, customer support and regular maintenance might add another $2,000 to $5,000 monthly. Employing a small in-house team versus outsourcing can also impact these figures.
Marketing and Sales
Marketing and sales strategies can add up quickly. Digital marketing campaigns, including SEO, PPC, and content marketing, can cost between $2,000 and $10,000 per month. Sales team salaries and commissions can also vary but generally fall between $50,000 to $100,000 annually per salesperson. Bootstrapped approaches, like leveraging social media and networking, can keep these costs much lower.
Licensing and Compliance
For software businesses, licensing and compliance costs are crucial. Licensing fees for necessary tools and platforms can range from $500 to $5,000 annually. Compliance with data privacy regulations, like GDPR or CCPA, can involve additional costs for legal consultations and system adaptations, sometimes costing up to $10,000 annually.
Scalability Considerations
Finally, consider scalability options. Cloud solutions can offer flexible, scalable server options, often as a pay-as-you-go model which can range from $100 to several thousand dollars monthly, depending on usage. Planning for scalability from the start can prevent costly overhauls later on, saving potentially tens of thousands of dollars.
Understanding these key areas will help you navigate the financial landscape of starting your CRM business more effectively.
Potential Costs of Starting a CRM Business
Starting a CRM business involves numerous expenses ranging from technology costs to labor fees. Understanding these costs upfront can help you budget effectively and plan for future growth.
| Expense Category | Description | Estimated Cost Range |
|---|---|---|
| Software Development | Building the CRM software from scratch, including design, coding, and testing. | $50,000 - $150,000 |
| Third-Party Licenses | Licensing fees for third-party technologies or plugins used in your CRM software. | $5,000 - $20,000 per year |
| Hosting Fees | Web hosting for your CRM platform, depending on the scale and resources required. | $100 - $500 per month |
| Domain Registration | Fees for registering the domain name for your business website. | $10 - $50 per year |
| SSL Certificates | Security certificates to ensure your CRM platform is secure. | $50 - $200 per year |
| Cloud Storage | Cloud storage costs for storing customer data securely. | $200 - $1,000 per month |
| Marketing | Expenses for digital marketing, social media promotions, and online ads. | $2,000 - $10,000 per month |
| Employee Salaries | Salaries for software developers, customer support, sales reps, and other staff. | $50,000 - $200,000 per year per employee |
| Office Space | Rent for physical office space if you are not fully remote. | $1,000 - $5,000 per month |
| Legal Fees | Costs for legal consultation, contracts, and other legal services. | $1,000 - $10,000 |
| Accounting Services | Fees for accounting services to manage financials and taxes. | $1,000 - $5,000 per year |
| Hardware | Computers, servers, and other hardware required for development and operations. | $2,000 - $10,000 |
| Customer Support Tools | Tools for managing customer support, such as help desk software. | $50 - $200 per month |
| CRM Infrastructure | Additional infrastructure costs for scalability, like load balancers or additional servers. | $500 - $2,000 per month |
| Networking Events | Fees to participate in industry conferences and networking events. | $500 - $5,000 per year |
These estimated ranges offer a comprehensive overview of the potential costs involved in starting a CRM business. Planning for these expenses will be crucial to get your business off the ground and ensure its long-term success.
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
