Blog · By Rea Hailley, CEO and Co-Founder
Replace SaaS With Custom Software: When Owning It Pays Off
$22,000 once. $3,500 a month back.
See when it makes sense to stop renting a subscription and own the software instead, with one plumbing business's real numbers.
Geremy Howe wasn't unhappy with what his software did. He was unhappy with what it cost him, every month, to rent it.
Geremy runs Mr. Rooter of Edmonton. On our first call he said of the service he was paying for, "What they're doing works really well, but we could do it so much better." So he paid $22,000 once for a tool built around how his business works.
"With that $22,000 spend we are forecasting to save $3,500 a month within our family, our group of companies."
Geremy Howe, Mr. Rooter of Edmonton · Watch Geremy's story
On that forecast, the build pays for itself in just over six months. And other companies now pay to use his software.
When should a small business replace SaaS with custom software?
When the subscription is central to how you make money, you'll pay for it as long as you're in business, and it almost does what you need.
Geremy's was core to his marketing. He knew exactly what it should do better, and he'd mapped it out in a document before we met. AL Del Degan, our CTO, read it and said he could build from it.
If you're paying for tools that almost fit, here's how we build software that replaces subscriptions for established businesses.
Not every subscription passes that test. One founder came to us ready to spend $30,000 on an app. We pointed her to a tool that costs $100 a month, and she didn't need the build at all (read Vera's story).
How much does it cost to replace a SaaS subscription with custom software?
Geremy's build cost $22,000. After reading his plan, AL's first read on the call was "definitely under $30K," and "we might even be closer to $20K."
We only bill for time and materials. As I explained to Geremy, when you get a fixed bid there's padding in there, 20 to 30 percent and sometimes more, because developers want to be paid for the unknowns.
Instead, we give you a low end and a high end, based on what similar builds have cost. If we ever bump into something unusual, we stop everything, tell you what it's going to take, and you decide whether to go ahead. Our guide to what it costs to build an app in Canada breaks down where the money goes.
Canadian companies may also recover part of the cost through SR&ED tax credits or IRAP funding. We connect owners with an SR&ED specialist who doesn't charge anything up front, and our government funding guide explains both programs. If you want a number for your own idea first, our App Cost Calculator gives you an estimate range in about 20 minutes.
What does custom software cost to run after launch?
Two things: hosting, and the work to keep it current.
Hosting is billed by usage, so a tool used by one business costs far less to run than a platform built for thousands of customers. For a small business that's often about $20 to $50 a month in total, not per user. You can own the hosting account yourself, or we manage it and send you one invoice a month for what was used.
"The biggest change is not having the over $2,500 a year bill for software I owned nothing of. Now I just pay minimal hosting costs."
Paisley Churchill · Watch Paisley's story
Maintenance and new features are optional. Most of our clients keep a small monthly retainer of 5 to 10 hours; others handle it in-house. You should know what an option costs now and in the years ahead, not only on launch day.
What should your first version include?
Less than you think, planned with everything in mind.
You always want to start as small and lean as possible, then add on as you prove that what you've built is working. But we ask for your full vision before we write any code.
Financial reporting is the one owners forget. They wait until the first version is built, then ask for reports, and the developer says, "You didn't ask for that, so we didn't capture that data." Now part of the app has to be rebuilt, which costs time and money.
Geremy's first version left out everything he didn't need yet. Because we knew where he wanted to take it, nothing has to be torn out when he adds to it.
How do you stay in control of a custom build if you're not technical?
You see the work as it's built, and you own it from the first day.
See it while it's half-built
AL doesn't disappear for two months and come back with a finished product. As soon as there's something to look at, he shows it to you and asks, "Are we on the right track?"
Own your code from day one
Your code lives in an account you own. As AL told Geremy, "You would have ownership access of that repository from the first day." If you ever want to take it elsewhere, you can.
"You get to see things as it develops, and it just gives so much more confidence. You delivered exactly what you said you would, and the price was bang on."
Geremy Howe, Mr. Rooter of Edmonton · Watch the video
What are you renting that you'd rather own?
Look at your monthly software bills. Find the one that's central to how you make money and almost does what you need.
New Idea Machine is a Calgary custom software and AI automation agency serving small business owners worldwide, and every build starts with a complimentary call with me. Bring that bill, and we'll tell you whether owning it would pay for itself, or whether you should keep renting.
Start the conversationWritten by Rea Hailley, CEO of New Idea Machine, with AL Del Degan, CTO, who has 33 years building software, including work with the Calgary Airport Authority, the City of Calgary, and Travel Alberta.