We already know the importance of an MVP or Minimum Viable Product for entrepreneurs and start-ups to get an idea of the things that need to be inserted and modified after a test run among potential users. There are a lot of factors that affect the precision of the estimate of a software project

• The precision of the requirements
• Changes in requirements
• The margin of error
• Risks
• Human factor

There are two generally used approaches while it comes to estimating the cost. These are fixed or agile software development methods.

Read more – Tips for Startups Launch Successful Minimum Viable Product (MVP)

Agile Software development:

It is an approximate evaluation method of the project depending on the requirements which are available at the moment. It is a preliminary calculation of the estimated cost.

It’s advantages are:

• Product requirements can be modified easily during software development according to the latest ideas and concepts when the picture is more or less complete.
• The estimate can be given with the conceptual description of the requirements of the product.
• The estimate is provided quickly which means an earlier start to the project.
• It does not require a deep elaboration before starting.

It gives a fairly rough idea of what the costs of developing the mobile app or website or software can be. But in reality, the estimate is most often several times smaller than the actual cost of the product because of the constant changes that need to be brought in.

Fixed price software development:

Fixed price software estimation method gives a more accurate idea of the cost of the project as it is based on the detailed requirements. The advantages of this method are:

• The product requirements are totally clear and everyone understands what the result of the product needs to be.
• Deadlines and costs are known and this improves the efficiency of the developers.

It is up to the entrepreneur and investors as to which method they want to use. Both methods have their pros and cons and suit various business models in different ways.

The cost comes per sprint and is somewhere between $5000-$15000 depending on the product. The release comes after these sprints throughout which the product is tested and modified to be of the best use and bring about a digital transformation.

Some key factors that determine the cost of the project:

• Choosing a platform for Software development: Choosing the right platform to develop the product is a key decision that the start-ups and entrepreneurs need to make. iOS is often considered to be the most profitable operating system according to a lot of analysts so most owners generally start off here. The best solution these days is to support the latest two OS versions. It is important to keep in mind the OS versions that will be relevant at the time of launch. This helps in minimizing costs.
• Logical Units: The requirements must form logical units to be evaluated separately. If the estimate becomes greater than the budget provided by investors, analysis helps to exclude the features that are least important. However, there are cases where cutting the functionality doesn’t make sense as it would be impossible to get the MVP that is desired. While creating the first version of an application, the use of system animations, system controls, with some customization of backgrounds, colors, etc is enough. Sometimes it’s better to keep things simple and launch the product before your competitors to get a hold. It is also cost-effective.
• Optimizing Implementation: Implementation can be optimized by letting the design and development go parallelly. Although it might increase the cost somewhat, it saves a lot of time and allows the product to be delivered faster. This makes up for the extra cost that you have paid. Start-ups and entrepreneurs need to be careful with deadlines to meet the budget. Decisions need to taken wisely in consultation with investors and keeping in mind the ideas and concepts required to make the application better.

• Investment in Team: The owners must be calculative and efficient while hiring the number of developers required for the project. It depends on the size of the project and may often need the involvement of additional developers to speed up the process. Cost and duration are directly proportional and hence should be kept in mind. Hiring more developers reduces the duration and helps in optimizing costs. Even if the entrepreneurs are outsourcing the development, paying for only the hours spent an excess of developers for a small project is not an effective technique. Hiring only the required number of developers per platform or direction is advisable. A lot of costs can be saved up this way
• Focusing on must-have features: The cost of an app rises with more features you add. However, for an MVP, it is better to focus on the must-have features to solidify the core of the application. Some of the must-have functions include
  • Personal Profile
  • To-do list
  • Calendar
  • Aims and progress
  • Prioritization of Tasks
  • Location tags
  • Notifications

This helps in creating an MVP at low costs serving the purpose for which the application has been developed. Consecutive modifications and additions can be made easily.

Conclusion:

A good MVP can do a world of good for the application and hence entrepreneurs need to be careful with the budget to get the optimum results at optimum costs. The functionality of the software needs careful elaboration. Requirements must be formed properly and goals must be clearly defined to get the best out of your team. The approach for software development can be decided according to the needs. The MVP shouldn’t be over featured. If the budget does not allow everything you want to put in, you should consider postponing some of the features for the next versions. The owners should be open to the ideas and concepts of the developers and personnel involved and should try to inculcate them in the best possible ways. It is always preferable to avoid hiring a large team for smaller projects as this could efficiently cut the cost. At the end of the day, it is entirely upon the entrepreneur and investors as to what approach they will take.