On-demand Service App Budget: 10 factors to Consider to Plan It Smartly

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By: Sagar Sharma

On-demand Service App Budget: 10 factors to Consider to Plan It Smartly

On-demand service has started impacting the varied industries profoundly. It has changed the conventional way of doing business where customers were approaching the service providers.

Now, the time changes. To enable customers with the luxury and comfort, business or service provider have started approaching customers in order to deliver their desired products or services at their doorstep.

Almost every business focuses on adopting on-demand service apps such as grocery, courier, transportation, cab booking, just to name a few.

Well, it’s easier to say than done.

If you want to build an on-demand service app, then you cannot directly jump into the coding and launch the app within three to four months.

It requires to pre-plan the app development before really getting started with it. You have to make smart decisions during the pre-planning of the app as your decision directly impacts the cost of your on-demand app.

So, if you have a tight budget, then make sure you invest it in the right way and only in must-have elements. Understand the on-demand service apps with its most important aspects of cost.

10 Essential elements to consider while planning a budget for your on-demand service app

1. Identify your niche market & target audience

Several on-demand service apps are available these days, which customers are using to enjoy product delivery at home. The widely popular on-demand apps for food delivery, logistics & transportation, grocery delivery, courier delivery, home care delivery, and cab booking.

Are you planning to build an app in these areas? Then, the market will be tough as you have strong competitors out there. However, if you are picking a less competitive market, then you can easily engage with customers and service providers.

Take time and do detailed research to analyze the potential. Once your target markets and user base are decided, you can intensively work in a specific direction.

2. App validation

Having an app idea is not enough to achieve success. You have to check the market potential of your app. Thus, you need to validate your app idea.

An experienced mobile app company, create a prototype to validate the concept and market demand. Instead of developing a complete app, it helps you to launch the features and functionality step by step by validating market demand.

During the app validation phase, you can get better clarity about the ideation and purpose of the app. It allows you to get more user engagement with less development. Eventually, it makes a huge impact on your budget planning.

3. Create detailed documentation of technical requirements

You have to create documentation of your technical requirements and list down all of the features and functions in it. It is also known as the Product Requirements Document (PRD) and very crucial to create the project estimation.

The technical requirements document covers the complete process of on-demand app development along with all details of each step and expected outcome.

Based on the documentation the mobile app developers can estimate the cost involved in app development such as front-end development, back-end development, architecture, technologies need to use, and more. Eventually, it helps you plan your budget with better clarity.

4. Hire skilled engineers (in-house or outsource or freelancers)

Well, you can go for any option you want as all these three options have their pros and cons. To make the right choice, first, you need to learn about the advantages and disadvantages of in-house or outsource or freelancers.

In-house Team

  • You can hire the team by yourself
  • Coordinate with them throughout the app development
  • You need to set up required IT infrastructure
  • Leverage the freedom to explore new functionality and features

Best suited to: Large scale organizations

Outsourcing Team

  • Surety of skilled developers
  • Take benefit of industry long experience and exposure
  • Get the developers who constantly explore the latest technologies
  • Guarantee of quality app development
  • Save the cost of IT infrastructure set up
  • Cut down the investment in office premises
  • Quite economical coned to in-house team setup

Best suited to: Startups to SMEs (Small and Medium Enterprises)


  • Most of the time it is the highly economical option
  • Selection of right skillset makes your app else they can destroy your project
  • Lack of accountancy
  • Work as an individual
  • You need to coordinate with each freelancer, you hire as they won’t be connected with each other

Best suited to: All businesses that want to have just an on-demand service app with no guarantee of quality

5. Choose the most suitable engagement model

If you choose to outsource your app development, then you need to select the right engagement model to build your mobile app. It impacts your overall budget. Most of the mobile app development companies will offer you three engagement models (Fixed Cost, Time & Material and Offshore Dedicated Center) to choose from.

Fixed Cost

The engagement model is the right choice for the projects that have specific development scopes and requirements.

Time & Material

The model allows you to pay only for the time and resources you use for the project.

Offshore Dedicated Center

The mobile app development company will set up an offshore development center and IT infrastructure for your long-term ongoing project.

To get a detailed understanding of these three engagement models, you can visit Fixed vs. Time & Material vs. Offshore Dedicated Center – Which to Choose For Your Next Mobile App Development Project?

6. Choose from native or cross-platform

This is one of the factors that creates a major impact on your budget.

If you want to consider the native app development, then you need to develop separate apps for both iOS and Android platforms.
The native app ensures robust app performance as the app is specifically designed and developed for a specific platform. But it takes more time and investment to build and launch the app on both the platforms.

On the other hand, if you go for cross-platform app development, then you need to develop a single app. In the cross-platform development, mobile app developers can reuse the large portion of the code for another platform. It requires only a few customizations to make the app compatible with another platform.

The only drawback is the app performance won’t be as smooth as the native app. But, it is a highly economical option for you to choose from.

So, get clarity about your priorities and decide the right and the best approach to build your on-demand service app.

7. Determine the mobile platform (Android or iOS)

Make a decision whether you want to develop and launch the on-demand app for the one platform first and then pursue another one or you want to build the app for both the platforms simultaneously.

If you select to go for one platform first, then you can go ahead with the limited budget. You can create MVP (Minimum Viable Product) and launch it first. Keep adding the features and functionality as well as enhancing the app as per the feedback of customers.

Once you feel that the app performs effectively on the respective platforms and stable, then start working on other platforms. Of course, if your budget allows.

You can also consider both the platforms at a time. But, then make sure you have enough budget.

8. Define a right set of features & functionality

Development and integration of the number of features and functionality definitely increase your cost of on-demand service app development.

Moreover, the complexity of features matters as well. The more complex the feature, the more time it will take and the cost per hour will also get affected by it.

So, be very specific about the features and functionality you want to cover the app. It is suggested to create a list and then starts developing the app by sticking to the list. If you keep adding the features and functionality, then the cost of app development will be very high.

9. Consider the app maintenance and enhancement cost

It’s not over just by launching an app on the App Store or Play Store. To stay competitive, it is very essential to keep enhancing the app as per the changing market trends and customer requirements.

App performance is another challenge. Leverage the mobile app maintenance and support services offered by a reliable iOS and Android app development company.

10. Matching algorithm

This is the heart of any on-demand service app. Once the app receives the order from the customers, it allocates a service provider to deliver the product or services to the customers. The matching algorithm searches service providers for the customers.

Every on-demand app uses different types of matching algorithms. All these algorithms fall under two major categories: Automated Matching and Manual Matching.

Automated Matching

If the logic assigns a service provider to the customer request, then it is automated matching.

Manual Matching

If the app administrator needs to assign a service provider to the customer, then it is manual matching.

Choose the best one that helps you to serve your users with instant and convenient support so that the users love to use your app.

In the nutshell

Credencys has proven experience in developing an on-demand service app for the different domains whether it is cab booking, transportation, courier delivery, and more. We have helped our clients by developing a feature-rich on-demand app by offering end-to-end mobile app development services.

We help our clients to stay ahead in the competitive market of on-demand apps by suggesting, developing and integrating the unique and appealing to the customers.

Get in touch with our professionals to share your on-demand service app idea!

Frequently asked questions about on-demand mobile app

What is an on-demand service app?

The on-demand service app connects customers with the service providers of different domains such as cab booking, food delivery, grocery delivery, etc. Using the on-demand app customers can order the product and services they wanted to get delivered at their doorstep in a few minutes.

What are the important features of an on-demand service app?

The on-demand service app consists of three different apps: consumer app, service provider app and admin panel. All the apps require a different set of features. Moreover, you can customize the app development by considering some specific features you want to add.

How much does it cost to develop an on-demand service app?

The cost of on-demand service app development depends on the features and functionality you want to add in the app to address your specific business needs. The complexity of features and functionality also impacts the cost factor. It also depends on the engagement model you are selecting for your project.

Why should businesses develop an on-demand service app?

The on-demand service app enables businesses with immense benefits such as reach out to a large customer base, explore unlimited business opportunities, gain a competitive edge, attracting the investors, and more.

Say goodbye to data chaos and embrace the power of PIM/MDM to supercharge your business growth!