Most businesses with software development needs end up spending too much money on software development. Instead of creating an app on a budget, as originally intended, they end up spending tens of thousands of dollars on services and technologies they probably don't even need.

There are many potential root causes of overpaying, such as hiring the wrong people or simply being the victim of an industry with lopsided supply and demand. But despite these ever-present variables, you have significant control over how your software development projects go -- which means you can follow these strategies to avoid overpaying for them.

Start With a Plan

Everything starts with a plan. If you're planning on building an app or a new platform, you should have more than just a rough idea of how that platform is going to look. Too many entrepreneurs go into the software development world with only a vague, abstract concept in mind. They figure they can hash out all the details later, in the middle of development.

But this presents two major problems. First, it means they won't be able to collect accurate bids or pricing estimates because they still don't know exactly what they want. Second, it means they're much more liable to facilitate scope creep later on, which can significantly increase the final price of the project.

The solution is to plan as many details for your platform as possible, delving into technical requirements so you can talk to your developers precisely about what you want.

Hire the Right Team

Hiring the right software developer makes a big difference. There are many avenues you can take here. No matter which path you choose, you'll need to consider the following qualities:

  • Agility. Agile development methodologies are leaner, more efficient, and more flexible than competing methodologies. Prioritize a software developer who specializes in agile development and make sure the team is dynamic enough to change things on the fly when necessary.
  • Skills. You also need to make sure people on this team are sufficiently skilled and experienced. Do they have knowledge and familiarity with the programming language you want to use and the type of software you want to build?
  • Credentials/proof of work. Don't get scammed. Make sure you verify the credentials of your software developer; do they have examples of their password to show off their expertise?
  • Communication. In my experience, most software development hiccups and delays are attributable to miscommunication. If you find a software developer with excellent communication habits, and you follow best communication practices, the number of miscommunications you experience will plummet.
  • Pricing. Finally, consider pricing. Get project estimates from multiple different developers to make sure the provider you choose is reasonably priced. Don't go with the cheapest option by default, since you often get what you pay for, but do shop around and weed out the agencies and freelancers who deliberately overcharge.

Negotiate

Consider negotiating before accepting any arrangement. Sometimes, all it takes to get a lower price is a polite request. Even in a worst-case scenario, you may be able to get the cost of the project lower by making a few sacrifices and compromises.

Limit Scope Creep

I've seen the profitability of many software development projects instantly jeopardized because of scope creep. Scope creep is essentially when the scope of the project gradually increases throughout the course of the project. This happens to entrepreneurs frequently, because they keep thinking of new ideas and new directions to take.

There's nothing wrong with being flexible and adaptable, but if you keep adding new requirements and changing your mind on the initial direction, your developers will have to work countless extra hours to accommodate those requests. And if they're charging by the hour, that means a much higher bill for you at the end of the arrangement.

Establish Practices to Prevent Miscommunication

The cost of the project and the time it takes to complete will both be negatively affected by miscommunication. If you explain something inaccurately, or if your developer misinterprets your request, you could end up spending dozens of billable hours unnecessarily on committing mistakes and then fixing them.

That's why it's important to establish practices to prevent miscommunication, like these:

  • Be proactive. Preventing mistakes is much more efficient than trying to correct them after they unfold. Always be proactive with your communication and try to acknowledge potential issues before they develop.
  • Stay organized. Your developer won't be able to build your software effectively if you provide them shotgun blasts of scrambled information; keep things organized and streamlined so it's easy to understand.
  • Remain consistent. Don't be wishy-washy; it's important to remain consistent about what you want and how you want it. That doesn't mean you can't change your mind, but it does mean you should strive for decisiveness.
  • Touch base periodically. Trust, but verify. Check in with your developer to make sure all your instructions are clear, evaluate the work currently done, and proactively acknowledge any potential problems.

Software development isn't cheap. And understandably so. But there's no reason to pay more for software development than you need to pay, especially when so many causes of overspending in this area are due to preventable issues.

Pay close attention to your project, from start to finish, and stay on top of these potentially problematic areas.