Software development quotation for a build on budget

What a software development estimate should cover

A software development quotation has to price something that does not exist yet, so it works best when the build is broken into features with hours against each. This template starts with paid discovery, lists every screen or module at an hourly rate, adds testing and launch, and offers support as an optional retainer. Load the sample, or download Word, Excel or PDF.

A software development estimate should show the client what is being built, how long each part takes and what you have assumed. List the features with hours, state the technology and hosting, and explain how changes are handled once the build is under way.

1. Discovery and requirementsWorkshops, user stories and wireframes, priced as a fixed first phase. What it produces becomes the basis for the build price.
2. Features with hoursEach screen, module or integration with its estimated hours, so the client can drop or defer features to fit a budget.
3. Technology and hostingThe stack, where it will be hosted and who pays the cloud bill. Hosting and third party API fees are monthly costs and belong outside the build total. A simple marketing site suits a website design quotation better, and office servers belong on an IT services quote.
4. Testing and launchAutomated and manual testing, a staging environment, app store submission if needed, and support on launch day.
5. AssumptionsWhat the numbers rely on, such as the client supplying content, an outside API behaving as documented, or a fixed number of user roles.
6. Change requestsHow new features are priced once the build starts, normally as a written change with hours and cost agreed before work begins.
7. Code ownershipWhen the intellectual property and the code repository pass to the client, which is usually on final payment.
8. Warranty and supportA bug fix period after launch, such as 30 days, followed by an optional retainer for updates and improvements.

Sample software development quote with example prices

Fieldcode Labs is quoting Rahma Logistics for a delivery tracking web app. Discovery is a fixed $2,400 for requirements and wireframes. The Build group lists the driver screens (60 hours), the customer tracking page (30), the admin dashboard (50) and testing and launch (20), all at $95 an hour. The subtotal is $17,600. A six month support retainer at $600 a month is optional, and the deposit is 30%. All figures are examples.

Edit the Fieldcode Labs quote

6 lines are filled in, from requirements and wireframes to support retainer. Put in your own software development rates, then download the PDF.

Open the software development sample

How to price software development

Software is priced as a fixed price per phase, as time and materials at an hourly or daily rate, or as a monthly retainer. Many developers combine them: fixed price discovery, an estimated range for the build, and a retainer once the product is live.

1. Fixed price per phaseA firm price for a phase with a clear output, such as discovery or a defined first release. It works when the requirements are written down and signed off.
2. Time and materialsHours or days at an agreed rate, billed as worked, with the estimate as a guide. Fairer when the client expects requirements to shift during the build.
3. Estimate rangeLow and high hours for each feature, so the client can see the uncertainty rather than a falsely precise single figure.
4. RetainerA monthly fee for a set number of hours of maintenance and small features. Say whether unused hours carry over or lapse.

The fixed price vs time and materials guide explains when each suits a build. When scope is still moving, show a low to high range with the estimate maker.

Worked example: costing a booking feature set with contingency

A client wants five features added to an existing app. Here is the estimate built from user stories at an example rate of $95 an hour.

1. User storiesLogin and roles 16 hrs, booking form 24 hrs, payment integration 20 hrs, notifications 12 hrs, admin reports 28 hrs: 100 hrs in total.
2. TestingAdd 20% of build time for testing: 20 hrs.
3. Project managementAdd 10% of build time for planning and client calls: 10 hrs. Total: 100 + 20 + 10 = 130 hrs.
4. Low figure130 hrs × $95 = $12,350.
5. High figureAdd 15% contingency for unknowns in the payment provider’s API: 130 × 1.15 = 149.5 hrs, and 149.5 × $95 = $14,202.50. The quote reads $12,350 to $14,202.50.

Integrations with outside systems, the number of user roles and how settled the requirements are widen or narrow the range more than the screen count does.

Inclusions and exclusions for a software build

Software quoting mistakes

• Giving a single fixed figure before discovery, when nobody yet knows what the admin side needs.
• Leaving testing out of the hours, then squeezing it into the final week.
• Forgetting hosting and API costs, so the client is caught out by a monthly cloud bill.
• Having no written process for change requests, so new features slip in at the original price.
• Not stating when the source code and intellectual property pass to the client.
• Ending the quote at launch, with no bug fix period and no support option.