How to make an app and make money: costs, process and tips

Published Monday 22 December 2025

Table of contents

• Why people like the app business
• App monetisation strategies
• Can you still make money from an app?
• Costs of developing an app
• The process of building an app
• Marketing your app
• After launch
• Managing your app business finances
• FAQs on making money from apps

Key takeaways

• Focus on building a minimal viable product with only 1-2 essential features to control development costs, which can range from $60,000 for a basic web app to over $200,000 for a complex mobile application.
• Choose your monetisation strategy based on your target audience, with consumer apps requiring high user volume due to low pricing while B2B apps can charge higher fees to fewer users for greater profitability.
• Implement a structured five-phase development process starting with discovery to define core features, as changes become ten times more costly with each subsequent phase.
• Track your app's financial performance using accounting software to monitor revenue streams, operating expenses, and cash flow, treating development costs according to tax guidelines for software development pools.

Why people like the app business

App businesses are profitable because they automate tasks and solve problems for users repeatedly. Popular apps generate revenue from weather checking, project management, and entertainment features.

You make money from apps through scalable sales.

The core benefit: Build one solution and sell it to unlimited customers without increasing production costs.

App monetisation strategies

Choosing how your app will make money is a crucial step. There are several popular models, and the right one for you will depend on your app's purpose and your target audience. Let's look at the most common strategies:

• In-app advertising: Show ads in a free app and earn when people view or tap them
• In-app purchases: Offer the app for free, then charge for extra features, content or virtual items
• Subscriptions: Charge a regular fee to give ongoing access to your content or services
• Paid apps: Charge a one-off fee to download your app
• Sponsorship or partnerships: Work with another business to add branded content or features in your app

Can you still make money from an app?

Making money from apps today requires high user volume because individual pricing is low. Most consumer apps charge small fees, while business-to-business (B2B) apps can charge hundreds of dollars a year.

Here's the reality of the current market:

• Consumer apps: Low pricing, high volume needed
• B2B apps: Higher pricing, fewer users required
• Success factor: User acquisition directly impacts profitability

The number of users you need depends on your development costs.

Costs of developing an app

App development costs vary significantly based on complexity and features, and it's worth noting how these are treated for tax purposes. For example, some tax authorities require that costs for custom-developed software be allocated to a software development pool and deducted over several years. Echobind, a US development company, works across industries from healthcare to gaming.

Key cost considerations:

• Basic web app: Around $60,000 for single functionality
• Complex web app: $120,000 for multiple features
• Mobile app addition: Over $200,000 total
• Additional costs: Marketing and promotion expenses

Cost-saving option: Build the app yourself if you have coding skills.

The process of building an app

App building success requires careful cost control and strategic planning. A methodical approach prevents budget overruns and focuses development efforts.

Expert strategy from Echobind:

• Define core features: Choose only 1-2 essential functions
• Build minimal viable product (MVP): Create basic version at lowest cost
• Avoid feature creep: Competitors rarely overtake simple MVPs with complexity
• Focus on execution: Perfect core features before expanding

The app development process follows five sequential phases that transform ideas into functional products. Each phase builds on the previous step to control costs and ensure quality.

Phase 1: Discovery

• Purpose: Define essential features and user flows
• Outcome: Clear feature requirements and navigation paths
• Why it matters: Most important step that prevents costly changes later

Phase 2: Wireframes

• Purpose: Create basic page layouts in black and white
• Outcome: Visual structure without design elements
• Focus: Show content placement and functionality

Phase 3: Prototypes

• Purpose: Build clickable navigation without functionality
• Outcome: Testable user experience flow
• Benefit: Validate design before development

Phase 4: Designs

• Purpose: Transform wireframes into final visual design
• Outcome: Complete interface with buttons, menus, and pages
• Requirement: Define every interactive element

Phase 5: Development

• Purpose: Write code to make the app functional
• Outcome: Working application ready for testing
• Process: Build complete system from tested concepts

Yared says the idea is to make most of your changes during the discovery phase. ‘It’s the most important part of building custom software, otherwise you risk building a house with the wrong foundations. Changes get ten times harder and more costly to make with each step in the process.’

Marketing your app

App marketing is essential for generating revenue because apps need users to become profitable. Marketing starts before launch and continues throughout the app's lifecycle.

Pre-launch strategy:

• Beta testing: Distribute to test audiences for feedback and early adopters
• Benefit: Improve product quality and gain initial paying users

Launch optimization:

• App store presence: List in relevant app stores with optimised descriptions
• Website creation: Build dedicated product pages for direct marketing
• Content focus: Clearly explain problems solved and use relevant keywords
• Dual approach: Combine app store and website marketing for maximum reach

After launch

Post-launch success depends on user retention rather than just initial downloads. Early adopters provide the foundation for long-term profitability through feedback and word-of-mouth marketing.

Why early users matter:

• Product improvement: Provide feedback for better functionality
• User growth: Attract additional customers through recommendations
• Revenue foundation: Convert into paying subscribers for sustained income

Managing your app business finances

Once your app starts generating income, it's time to think like a business owner. Keeping your finances organised is key to understanding your profitability and making smart decisions for growth. You'll need to track revenue from your chosen monetisation model, whether it's from ad networks, app store payments, or subscriptions.

At the same time, you need to keep an eye on your expenses, which can include development costs, marketing spend, server fees, and salaries. According to tax guidelines, some ongoing costs like software subscription fees can be claimed as operating expenses in the year you incur them.

When you clearly track your income and costs, you can see how much profit you really make. Using accounting software can simplify this process. Try Xero for free so you can manage cash flow and stay on top of your financial health without the headache of spreadsheets.

FAQs on making money from apps

Here are answers to some common questions about making money from apps.

Can I make an app for free and make money?

Yes, it's possible. You can use no-code app builders to create a simple app without hiring developers. While these platforms have limitations, they can be a great starting point. You can then use monetisation strategies like in-app advertising to start earning revenue.

How many users do you need to make money from an app?

There's no magic number. Profitability depends on your monetisation model and costs. An app with a few hundred subscribers paying a monthly fee could be more profitable than a free app with thousands of users who don't engage with ads. Focus on building a valuable product for a specific audience first.

What's the most profitable type of app?

Profitability varies widely, but apps in sectors like business, finance, health, and gaming often do well. Business and productivity apps can command high subscription fees, while successful mobile games can earn significant revenue through in-app purchases. The key is to find a niche you understand and solve a real problem for your users.