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Why nobody will give you a price for custom software

Anyone who quotes before they know four specific things is guessing, and the guess is either padded to cover the risk or low enough to become an argument later.

4 min read

  • advisory
  • pricing

Nobody can give you a real price for custom software on a first call, and the firms that do are either padding heavily to cover what they do not yet know, or quoting low and planning to have a conversation about scope in month three.

We do not publish prices either, so treat the rest of this as interested. What follows is the list of things that actually move the number, so that when someone does quote you, you can tell which kind of quote it is.

Four things decide the number

How well the problem is understood. Not by us, by you. A client who can describe the process they want changed, name who does it today and say what happens when it goes wrong is asking for a build. A client who knows something is wrong but not what is a different job, and the first part of it is finding out. Both are legitimate. They are not the same size.

How much it has to talk to. A system that stands alone is a fraction of the cost of one that has to exchange data with an accounting package, a CRM and a warehouse system that was configured by somebody who left in 2019. Integration is where estimates go wrong, because the cost lives in the other system's quirks and you cannot see those from outside.

Who has to use it, and whether they want to. Software for three people in one office is not the same as software for sixty across four sites who have opinions about the tool it replaces. The second needs a rollout, training, and someone whose job it is to care whether it gets used. That is real work and it belongs in the number.

What happens when it breaks at 2am. An internal tool that can wait until Tuesday is cheap. Something a customer touches, or that stops shipments, needs monitoring, alerting, a way back to the previous version and somebody who answers the phone. The functionality is identical. The engineering is not.

Why the first call cannot produce a figure

Because on the first call we usually know one of those four, and it is generally not the hardest one.

The honest thing a firm can tell you early is a shape, not a price: this is probably a few weeks of work rather than a few months, or the reverse. That is worth something. It is not a quote, and it should not be dressed as one.

What we do instead is charge for the part that produces the answer, then quote the build against what that assessment found. It sounds like a way of selling two things. It is also the only sequence in which the second number means anything, and it lets you stop after the first if the answer is that the build is not worth doing. That happens, and the assessment is written so it can happen without wasting what you have already paid for.

The number a fixed quote is really quoting

A fixed price given before the work is understood is not a price for the work. It is a price for the work plus the supplier's estimate of how wrong they might be, and you pay for that estimate whether or not the risk shows up.

That is not dishonest. It is what fixed-price means, and for a well-understood piece of work it is a perfectly good deal — you are buying certainty and the supplier is selling it. The problem is a fixed price on an unclear brief, where the padding has to be large enough to cover a range nobody has bounded yet. Then you are buying the supplier's anxiety at retail.

What to ask instead of "how much"

Ask what would have to be true for the estimate to double. A firm that has thought about your problem can answer immediately, and the answer tells you where the risk actually sits. A firm that has not will talk about their process.

Ask what you get if you stop after the first stage. If the answer is "nothing", you are being asked to commit to the whole thing to find out whether any of it was a good idea.

Ask who carries the cost of a wrong estimate. There is no correct answer to that. There is a correct time to find out, and it is before you sign, not in month three.

The short version

You cannot get a real price without a real brief, and producing the brief is itself the work. Any number that arrives before that is a guess wearing a suit — sometimes an experienced guess, still a guess. Before we build anything we put a requirements document and a working demo in front of you, so the thing you are agreeing to is something you have already seen rather than something you have been described. How that runs is on the services pages, in the order it actually happens.

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