Building a SaaS product comes with a myriad of cost considerations that can make or break your budget. Insights from a Software Engineer and a CEO reveal critical strategies to manage these expenses effectively. This article explores six expert insights, starting with the importance of budgeting for iteration from the beginning. The discussion wraps up with the necessity to consider both development and marketing expenses.
- Budget for Iteration from the Beginning
- Focus on MVP Development
- Invest in User-Friendly Design
- Understand Development and Maintenance Costs
- Prioritise Core Features and Marketing
- Consider Development and Marketing Expenses
Budget for Iteration from the Beginning
Iteration-continuous adjustments based on real-world user feedback-is one of the most overlooked costs in SaaS development. A friend once released a SaaS tool for retail analytics, believing that they had perfected the essential functionality. After spending $100,000 on development, they learned their assumptions were incorrect-users did not require the complicated reports they created but preferred basic insights. Fixing this took another six months and almost doubled their budget.
What’s the lesson? Budget for iteration from the beginning. It’s tempting to believe in a faultless first version, but real-world consumers will always find flaws. Building in smaller cycles-developing, testing with real users, and refining-can save money in the long run. One creator I know set aside 30% of their money for post-launch changes, allowing them to pivot fast depending on feedback.
This strategy pushes you to strike a balance between ambition and reality. It’s not enough to release; the product must also meet user needs.
Hristiqn Tomov, Software Engineer, Resume Mentor
Focus on MVP Development
Having managed development projects as the VP of Demand Generation and Marketing at a digital marketing agency, my answer is almost always the same—it depends. The cost of building a SaaS product varies widely, influenced by several key factors.
The scope and complexity of your SaaS product play a significant role in determining costs. A simple tool with basic functionality could cost tens of thousands of dollars, while a feature-rich, enterprise-level platform might cost more. Features such as AI algorithms, integrations with third-party tools, or custom analytics dashboards can dramatically increase expenses.
From my experience overseeing development tasks, I can confidently say that unforeseen costs are inevitable. User feedback might inspire feature additions, or technical challenges may lead to longer development timelines. A SaaS founder needs to budget for these “unknowns” to maintain financial flexibility and avoid stalling progress. It’s essential to allocate at least 15-20% of your budget for contingencies such as UI/UX redesigns, scalability improvements, or legal expenses.
My advice to keep costs manageable is to focus on MVP (Minimum Viable Product) development. Align your initial release with the most critical user needs and iterate as you gather insights from early adopters.
Aaron Whittaker, VP of Demand Generation & Marketing, Thrive Digital Marketing Agency
Invest in User-Friendly Design
The cost of building a SaaS is like building a house – you can spend $50,000 for something functional or $500,000 for something elaborate, but the maintenance costs will follow you either way. With our organisation, we realised early that an iterative approach was far more sustainable than trying to build everything at once.
Customer support and onboarding are often overlooked but critical; if your SaaS isn’t intuitive, you’ll spend a fortune educating and retaining users. We invested heavily in user-friendly design and clear onboarding flows at our company, which saved us from needing a massive support team.
Alari Aho, CEO and Founder, Toggl Inc
Understand Development and Maintenance Costs
The cost of building a SaaS product can fluctuate depending on various factors. Take a look and understand the costs and crucial factors to consider while building a SaaS product.
Development costs: These include the salary or fees of qualified developers, user interface designers, and project managers deputed to bring the product to life. Also, the development tools and necessary infrastructure are required. The cost can range from $50,000 to $500,000 depending upon the product’s complexity.
Infrastructure cost: After the development is completed, deploying it on reliable servers, data storage and necessary bandwidth will cost between $1,000 to $10,000 per month depending upon the user base and performance needs.
Maintenance costs: After launch, expenses related to bug fixes, software updates, and customer service will be around 10% to 30% of the development budget annually.
Considering all these factors, you can get a quick idea about the building costs of a SaaS product.
Dhari Alabdulhadi, CTO and Founder, Ubuy Netherlands
Prioritise Core Features and Marketing
The main cost factors include product development, infrastructure, and ongoing support. Development costs depend on the features and the size of the team. A basic MVP might require a small team of developers and designers, while a more sophisticated product needs specialists like data scientists or AI engineers. Hosting and infrastructure costs also add up, especially for a scalable platform. For Salesforge.ai, early-stage costs were manageable through careful prioritisation, focusing on a core feature set.
Non-ops expenses include marketing and customer acquisition. Building the product is just part of the equation. Attracting users requires investment in campaigns, content, and outreach.
V. Frank Sondors, Founder, Salesforge AI
Consider Development and Marketing Expenses
Building a SaaS can cost a lot or a little, depending on what you want to do with it. If you’re not making the software yourself, you’ll need to hire someone to develop it. For a basic MVP version, you might spend from a few thousand to tens of thousands of dollars. The main expense comes from creating the software, which includes all the programming work needed.
Besides the cost of making the software, you should also think about money for marketing. Marketing is super important because it helps people learn about your product and keeps them interested.
Piotr Zabula, CEO, Cropink.com
