How Small Businesses Build Mobile Apps

By Riley Panko / 3 April 2018

Small businesses with limited resources may struggle to build a mobile app. Our survey investigates how much small businesses spend on mobile apps and what resources they use. Small business owners can use the data to guide their mobile app development goals.

Mobile apps are often expensive and time-intensive to create – factors that may limit small businesses’ ability to take advantage of mobile app opportunities. Yet, small business mobile apps offer significant benefits, if the app is developed well and for strategic reasons.

Recently, The Manifest surveyed more than 350 small business owners to determine how and why small businesses create mobile apps.

In this article, we explore the resources small businesses use to build mobile apps, including the cost of the app, where they acquire expertise, and how small businesses of different sizes approach mobile apps.

We walk you through the different options small businesses have to build a mobile app, from development agencies to do-it-yourself (DIY) app builders.

You can use this data to build a plan of action that helps you meet your mobile app development goals.

Our Findings

  • Almost half of small businesses (47%) with more than 50 employees have had an app since before 2017.
  • Nearly one-third of small businesses (30%) with only 1 employee say they do not have a mobile app and are unlikely to in the future.
  • Nearly half of small businesses (48%) spent less than $25,000 to design, launch, and build their mobile app, though experts caution that smaller budgets may not produce a successful product.
  • Almost half of small businesses (46%) rely on in-house staff to help with their mobile app, while 41% use a freelancer or consultant.

Mobile App Potential Correlated With Company Size

Not every small business can pursue a mobile app. A recent survey found that 58% of small businesses currently do not have a mobile app.

The Manifest’s data confirms that small businesses with more employees are more likely to have a mobile app. Nearly half of small businesses (47%) with more than 50 employees have had a mobile app since before 2017.

47% of small businesses with more than 50 employees have had a mobile app since before 2017

Only 4% of small businesses with more than 50 employees say they do not have a mobile app and are unlikely to have one in the future.

In comparison, almost one-third of small businesses (30%) with only 1 employee say they don’t have a mobile app and are unlikely to in the future.

30% of small businesses with 1 employee say they are unlikely to ever have a mobile app

Mobile app development requires significant investment in both time and money. Therefore, it makes sense that smaller businesses, or businesses that are still scaling, may struggle to build an app.

App Development Cost Often High

Many small businesses may not realize the true cost of app development.

A little under half of small businesses spent less than $25,000 on their mobile app.

Graph of how much small businesses spend on mobile apps

Over one-third of small businesses, however, spent between $25,000 and $100,000. The remaining spent over $100,000 – a large sum for small businesses with limited budgets.

The minimum budget needed to build an app may shock small businesses.

“For custom, native software for less than $10,000, I would be shocked that you're getting a quality product,” said Woody Zantzinger, vice president of business development at WillowTree, Inc., a mobile app development company in Charlottesville, Virginia.

It’s hard to cheaply create a mobile app that can actually meet your business’s goals. 

The final cost of an app development project strongly correlates with the resources a company uses to build and maintain it. Your final price tag can fluctuate depending on if you are using in-house staff, an app development company, or a DIY app builder.

By analyzing the resources needed to build a mobile app, a small business can assess whether it’s realistic to build a mobile app.

Small Businesses Most Often Use In-House Staff to Build an App

Ideally, a small business would be able to create and maintain a mobile app using the expertise found within their company.

Unlike an external partner, in-house staff is likely already familiar with your company’s goals, branding, and culture. Costs would not significantly increase and the work would require little transfer of knowledge.

For these reasons, the largest percentage of small businesses (46%) use in-house staff to build and maintain their mobile app – potentially alongside other options.

 

Graph of the resources small businesses use to build mobile apps

 

For some companies, building and maintaining an app in-house is the logical decision.

“We did [build the app] in-house because our tech team has a lot of experience in this space,” said Mikko Honkanen, co-founder of sales intelligence platform Vainu, based in Finland. 

“It also helps that Finland is the home country for Nokia and that used to be the biggest mobile phone maker,” said Honkanen. “We had the expertise in-house, and it was a very easy thing to do.”

Vainu was able to save money and reduce stress by building in-house. 

Maintenance Care, a computerized maintenance management system, found that building a simple web app in-house was easier than other options.

“We initially tried using an outside resource for building our app, but that fell apart quickly,” said Dan Roberge, president of Maintenance Care.

“What we decided to do, because we couldn't easily support multi-platforms, was to build a web-app internally ourselves as a first go,” Roberge continued. “The web-app would work on any device as long as they had a browser, but it looked and felt like a native app.”

Building and maintaining an app in-house can be the easiest and most cost-effective option for some small businesses.

This approach only works, however, for small businesses that already have technically qualified staff.

To save money and build a quality product, small businesses will need to recruit outside resources to help build their mobile app.

DIY App Builders, Niche Development Agencies Can Maximize Budget

Small businesses may take advantage of DIY app builders and specialty mobile app development agencies for a cheaper app that still delivers results.

38% of small businesses use a DIY app builder to build a mobile app

DIY app builders can create simple and inexpensive apps. App builders allow anyone to easily create apps with:

  • No code required
  • Pre-set templates
  • Drag-and-drop functionalities
  • Reduced costs

For example, AppyPie offers software to create Android, iPhone, and Windows apps.

 

AppyPie software screenshot

 

While DIY app builders’ capabilities are limited, they can fulfill some small businesses app development goals.

DIY app builders don’t allow much customization or complex features, though. But if your small business’s mobile app goals are simple, a DIY app builder may be all you need.

Small businesses may also be able to stretch their budget by finding a specialty app development company that builds only certain types of apps.

Zantzinger mentioned YinzCam, a mobile app development company for professional sports teams and sport venues.

 

Screenshot of YinzCam products

 

By tailoring the work they do to specific industries, specialty app developers can offer cheaper prices and faster services. This can work for small businesses that may need more than what a DIY app builder can offer but don’t want to pay for a fully customized app.

Not every small business can afford a completely custom-built mobile app, but DIY app builders and specialty app development companies can reduce costs.

Outside Freelancers, App Development Firms Offer High Skill & Expertise

For small businesses with complex app development goals seeking a high-quality product, a freelancer/consultant or app development agency may be the best option.

Over 40% of small businesses use a freelancer or consultant, and 39% use a design or development agency for their mobile app.

40% of small businesses use a freelancer or consultant to make a mobile app

Outside resources can offer high levels of expertise and strong guidance.

“If it seems like it will take ages to create your mobile app because you have no such expertise or because your capacity is limited, then [you should] hire an external agency or consultancy to help,” said Peter Mezyk, chief operating officer of Nomtek, a mobile application development agency in Poland.

The decision to use an outside consultant or app development company is only the first step.

Next, ask the following questions:

  • Do you want to outsource your work to a different country?
  • Do you want to remain local? 
  • Do you want a freelance developer or a large app development firm helping you out?

The answers to these questions depend on your small business’s specific needs.

For some, the decision to outsource to another country is natural. For example, a study found app development to be 10x cheaper in India than in the U.S.

Small businesses seeking the cheapest prices for an app development agency may find outsourcing appealing. They should be prepared to deal with some communication complexities, though.

There are also perks to hiring an app developer closer to home.

Local app development companies more easily can meet in person, and communication strategies are usually simpler and more direct.

For small businesses that know little about app development, working with a local app development company can offer more guidance and peace of mind.

Consider your business’s specific needs for a mobile app when deciding how to use outside resources for a project.

Alternatives to Building a Mobile App

Not every small business needs a mobile app. Small businesses can often achieve their goals by taking advantage of cheaper, already existing platforms instead.

“A really good, up-to-date listing on Yelp and Google might negate the need for apps in certain industries,” said Zantzinger.

For example, a restaurant can use the OpenTable platform to provide mobile services for its customers and employees. OpenTable offers software to manage restaurant reservations and employees’ shifts.

 

Screenshot of OpenTable software

 

Many people also search for businesses on Google. They may type in “restaurants near me” to find options.

 

Screenshot of Google Maps' restaurant listings

 

By creating a Google+ account with all your restaurant’s information (hours, contact details, etc.) and verifying the business with Google, you can optimize your Google result so it provides accurate and up-to-date information – which can increase customers’ likelihood of visiting you based on a Google Search result.

Small Businesses Must Consider App Development Resources

Given the time and expense required to build a mobile app, small businesses often must get creative with the resources they use for a project.

Nearly half of small businesses with more than 50 employees have had a mobile app since before 2017 due to larger budgets and more staff.

On the other hand, businesses with only one employee are most likely to say they don’t have an app and never will.

Almost half of small businesses use in-house staff to build and maintain their mobile app, but a significant number also use freelancers, design or development agencies, or DIY app builder software.

Small businesses should be cognizant of the best and most cost-effective options for building a mobile app.

Finally, sometimes a mobile app isn’t necessary. Small businesses can get the benefits of an app through third-party platforms or SEO.

By understanding how other small businesses are approaching mobile apps, you can better plan your project.

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