Hidden costs of software development

If you are a first-time founder you have a lot on your plate.

Worrying about many different expenses.

You might think that once you pay for your product to be developed you can cross it off your list. But don’t be so sure…

The truth is you might overlook some hidden costs of software development down the road. These costs can easily add up and create huge financial troubles.

This is why it's important to plan and create a budget for unexpected expenses.

To help you with this we have created a list of 7 additional costs you can expect that we always present to our clients at brigit.dev. With this list, there will be no unpleasant surprises and you can plan your budget worry-free.

List of 7 hidden costs of software development

1. Change request costs

If you want to make changes to the project scope, requirements, or specifications after the initial agreement, additional charges will apply according to these changes. This can significantly impact project timelines.

This sounds logical, but most first-time founders forget about it or don’t plan for this at all.

These changes are very common and happen at least once during the development process.

They can happen for many reasons. You might need new features, or you might want to adjust how something works.

Sometimes, things that seemed clear at the start might not be so straightforward as the project develops. Because of this, you will need to change a thing or two.

Each change means extra work for the development team. They might need to rewrite the code, test new parts of the system, or even redesign some aspects. This takes time and resources.

So any new changes after the project has started will have extra costs naturally. These change requests can also increase overall software development costs, including maintenance, testing, and troubleshooting.

It’s nothing to worry about, and if changes are not fundamental the costs won’t be high. But still, plan and talk about this before you start developing your solution.

2. Third-party costs

Sometimes third-party services, licenses, or tools may be required to complete the project.

These might be special third-party tools and plugins, external libraries, training expenses, vendor lock-in, or other services that you need to buy or subscribe to.

For example, you might need a specific tool to test the software or a license for a library that adds important features.

Any associated costs for these external resources will of course be communicated with you, just remember that these costs are fixed because they come from bigger corporations. So unexpected cost increases can happen at any time.

We always make sure to inform clients about any third-party potential hidden software costs before we include them in the project. This way, there are no surprises, and clients know exactly what they are paying for.

3. Overtime or rush changes costs

You can’t plan and prepare for everything. You have to accept that something will be out of your control.

Projects with tight deadlines or urgent changes require overtime work or changes in the work process. It is no one’s fault this happens and it’s inevitable to happen at least once.

This might include late nights, weekends, or even bringing in extra help to meet the deadline. These additional resources and the extended working hours are why extra charges apply.

We always communicate these unexpected costs clearly to our clients because we know how much they can impact the initial budget. This way, clients understand why the extra costs are necessary and can decide how to move forward.

4. Maintenance and support costs

This is probably the number one hidden cost first-time founders overlook.

It is not so hidden, as it is hard to grasp for some that it comes separately from the development costs.

Maintenance and support are necessary if you want to avoid bad reviews, poor customer experience, and potential abuse of your platform.

Once the project is completed, it needs regular software maintenance to ensure it runs smoothly. This can include fixing bugs, applying security patches, making compatibility updates, or providing support for users. The cost of these services depends on how much support is needed.

Neglecting regular maintenance can lead to an accumulation of technical debt, which can significantly impact long-term maintenance costs and the software's stability.

We discuss these potential costs with our clients at the start of the project. This way, clients know what to expect and can plan their budget accordingly.

5. Domain costs

Registering and maintaining a domain name is an important part of any online project.

A domain name is like your online address. To keep this address active, there are costs involved. These costs include the fee for registering the domain name for the first time and the fees to renew it each year.

These costs are usually not very high unless you want a name that is already taken or in any way associated with someone else’s business.

These costs usually come up once it’s time to launch the project, but it’s important to think in advance. We advise our clients to plan for it and buy a domain name on time before it’s taken.

Additionally, considering domain costs as part of the overall software project budget is crucial to avoid unexpected expenses.

6. Hosting expenses

Hosting is what keeps a website or application online and accessible. This service involves using server space and resources, which have associated costs.

Hosting costs are significant because they cover not only the server space but also the maintenance costs required for ongoing software maintenance, including bug fixing, scaling, refactoring, and security. These costs are interconnected and impact the overall budget and strategic planning.

Additionally, there is an ongoing monthly fee associated with hosting services, whether the software is hosted in the cloud or provided by a company.

These costs depend on the level of service required, such as the amount of storage, bandwidth, and special features needed.

They also include monthly or annual fees for hosting services.

It’s easy to overlook them at the start when all you want is a finished product. But if you don’t host it it’s like you never built it.

7. Compliance costs

Ensuring that a project meets regulatory requirements and industry standards can involve additional expenses as part of the overall software development project.

These costs include fees for audits, certifications, and any necessary adjustments to meet compliance.

A dedicated software development team plays a crucial role in ensuring compliance by handling ongoing modifications and updates.

Meeting regulatory requirements and industry standards is a must. If you don’t follow these regulations you can get sued or fined. The worst-case scenario is that your product will have to be removed from the market.

Because of this, it’s always important to think ahead and never deliver a product without thinking of this.

Conclusion

Hidden costs in software development can significantly impact project budgets and timelines.

Often overlooked, these costs can add up over time and cause delays in launch if you don't think of them on time.

Addressing these factors early and regularly assessing project progress can help minimize their impact and ensure successful outcomes.

Next step?

Once you are aware of these hidden costs you can can plan and prepare better.

To assist you on this journey, we at brigit.dev have conducted research and interviews with founders like yourself and consulted development experts to create a comprehensive guide.

Here is a link to additional resources that will address your questions, and doubts, and solve challenges you may encounter on the path to your startup's success.