At some point you need software to do something specific. Maybe it’s tracking jobs, managing stock, running a customer portal, automating quoting, or pulling data out of three different systems and into one dashboard. The choice is the same either way: pay a monthly subscription for a product that almost fits, or commission something built around how your business actually works.
Most companies default to buying because it feels safer. The product exists, other people use it, and the monthly fee is predictable. You sign up on Tuesday and you’re running by Friday.
The catch is that the real cost of either path is rarely what it looks like at the start. SaaS subscriptions look cheap until you add up three years of fees and licences for everyone on your team. Custom builds look expensive until you factor in the workarounds, manual processes, and recurring fees they replace.
Here’s how to make the decision properly, with realistic numbers for both paths.
The question behind the question
When people ask “should we build or buy?”, what they usually mean is “which is cheaper?” That’s the wrong starting point.
The better question is: which option actually solves the problem we have, at a cost that makes sense for the size and stage of our business?
A £200 monthly subscription that does 60% of what you need isn’t cheap. It’s a permanent cost on a problem you’ve only half-solved. A £25,000 custom build that fits your team’s workflow exactly isn’t expensive if it saves ten hours a week for the next five years.
Frame the question that way and the numbers tend to point you somewhere clear. Frame it as “what’s the cheapest line item this quarter?” and you’ll spend years paying for software that fights your business.
What buying actually costs
Off-the-shelf software costs more than the headline subscription price. Here’s what you’re really signing up for.
The subscription itself, multiplied across users and time. A platform at £40 per user per month for ten users is £4,800 a year, or £24,000 over five years. That’s before annual price rises, which most SaaS providers now build in by default.
Add-on modules. The base subscription rarely covers everything. Reporting features, integrations, advanced permissions, premium support tiers. Each one is its own line on the invoice.
Implementation and training. Even simple SaaS needs configuration. For more complex platforms like CRMs, ERPs or accounting systems, you’ll often need a consultant to set things up properly. Budget anywhere from £2,000 to £20,000 depending on the system.
Workarounds for the gaps. This is the cost nobody puts on the spreadsheet. Every product has things it does poorly or doesn’t do at all. Your team builds workarounds: spreadsheets, manual processes, third-party tools to fill the holes. Each workaround is a recurring time cost forever.
Switching costs when you outgrow it. SaaS products lock you in. Your data lives in their format, your processes are built around their quirks, and migration somewhere else means months of disruption. Plenty of businesses stay on poor-fit software for years because leaving feels too painful.
For a typical SME using five to ten significant SaaS products, the genuine annual cost often lands between £15,000 and £50,000 once everything is added up properly.
What building actually costs
Custom software has its own honest accounting.
The build itself. A simple internal tool might be £5,000 to £15,000. A proper business application with multiple user roles, integrations, and a polished interface usually runs £25,000 to £80,000. Anything genuinely complex, like multi-tenant platforms or systems with heavy AI integration, starts at six figures. If you want a ballpark figure for your specific project, an online estimator can give you a sensible starting range before you talk to anyone.
Hosting and infrastructure. Custom software needs somewhere to live. Cloud hosting for a typical business application runs £50 to £500 a month depending on usage. Higher for anything data-heavy.
Maintenance and updates. Software isn’t a one-off purchase. You’ll want bug fixes, security patches, and the occasional new feature as your business changes. Budget 15-20% of the original build cost annually for ongoing support, or set up a retainer with your developer.
Project management on your side. Custom builds need your time. Someone in the business has to make decisions, review work, test features, and feed back. A 12-week project might cost you 40-80 hours of internal time. Worth factoring in.
The risk of getting it wrong. This is the cost most businesses worry about most. A custom build that doesn’t deliver is expensive in a way SaaS rarely is. The risk shrinks dramatically when you work with developers who do proper discovery, build in phases, and let you test work as it progresses, but it’s never zero.
For most SME custom software projects, the realistic five-year total cost lands somewhere between £40,000 and £150,000 once maintenance and hosting are included.
When buying is the right call
Buying makes sense in a handful of situations.
The problem is genuinely standard. Email, payroll, accounting, basic CRM. These are solved problems. Hundreds of products exist because thousands of businesses need exactly the same thing. Building your own would be vanity.
The off-the-shelf product fits 90% or more of what you need. If you can adopt the software’s way of working without bending your business out of shape, the value is real. Custom only makes sense when the gap is bigger than that.
You need it running this month, not next quarter. SaaS gives you instant capability. Custom takes months to build. If speed matters more than fit, buy.
The problem might change quickly. If you’re not sure what you’ll need in two years, buying gives you flexibility. You can switch products as needs evolve. A custom build is a longer-term commitment.
Your business is small enough that the SaaS fees stay manageable. A £40 per user product is reasonable for a team of five. The maths shifts as you grow.
When building is the right call
Building is the right answer when the standard products genuinely don’t fit.
Your process is part of why customers choose you. If how you do something is your competitive edge, software that forces you into the generic way of working is actively damaging. A bespoke system protects what makes you different.
You’re paying significant SaaS fees for something you’re outgrowing. If you’re spending £15,000 a year on a product that only covers part of what you need, a one-off £40,000 build can pay back inside three years and serve you for ten.
You need integrations the SaaS world doesn’t offer. Modern businesses run on dozens of systems. Off-the-shelf products integrate with the popular options, but if you need data flowing between specific systems in specific ways, custom is often the only path.
Your team’s time is being eaten by manual workarounds. If multiple people in your business spend hours each week filling gaps in your current software, that time has a cost. An hour a day from three people for a year is roughly 750 hours, or the equivalent of half a full-time salary spent working around something instead of doing the actual job.
You want AI built around your actual workflow. Generic AI features bolted onto SaaS products are rarely worth the upgrade cost. Smarter, narrower AI systems designed around your team usually deliver more value than the broad copilots that come bundled with everything else.
The numbers actually work. A custom build at £30,000 that saves you £15,000 a year in subscriptions and recovered time pays back in two years and keeps saving you money for the next eight.
The hybrid answer most businesses miss
The build-or-buy framing suggests an either-or choice. In practice, the smartest businesses do both.
Buy off-the-shelf for the standard stuff. Accounting, email, basic CRM, payroll. Don’t reinvent these. The products are mature and the problems are commodity.
Build custom for the parts of your business that make you different. Your specific operations, your unique customer experience, the workflows that don’t exist anywhere else. That’s where custom delivers real value.
Connect everything with integrations. Modern custom software talks to your existing tools through APIs. Your bespoke platform can read data from Xero, push records to HubSpot, send notifications through Slack. You get the best of both worlds: standard tools for standard problems, tailored tools for what makes you you.
This is how most working SME software stacks actually look. Some bought, some built, glued together with integrations.
Doing the maths properly
Before you decide, run the numbers for both options across the same time horizon. Five years is fair for most business software. Anything shorter unfairly favours SaaS. Anything longer unfairly favours custom.
For SaaS, calculate five years of total cost. Include the subscription, every add-on you’d realistically need, implementation help, training time, and an honest estimate of what the workarounds cost you. Multiply by the number of users you’ll have when your business is bigger, not where it is today.
For custom, get a proper scoped quote from a developer who does discovery first. Anyone giving you a number without asking detailed questions about your business is guessing. A real quote comes after a conversation about what you actually need, not before. If you want a reasonable opening figure to test against, Red Eagle Tech’s build cost calculator gives you a sensible range without the sales call.
Then compare across the same period. Add the qualitative factors. How much does it matter that the software fits your business exactly? How important is it that you own the asset? How much do you trust the SaaS vendor to still be around and serving you well in five years?
Where the comparison usually falls down
Most companies skip the comparison and default to SaaS. They look at a £400 monthly fee, set it next to a £40,000 build, and conclude the SaaS is cheaper. They forget to multiply £400 by sixty months.
The other version of the same mistake is going custom for problems that don’t need it. Building your own email system, your own basic CRM, your own time tracking. Those are commodities. Pay the monthly fee and use the same product everyone else does.
Once both options are sized properly across the same time horizon, the answer is usually clearer than people expect.
A final word on choosing who builds your software
If custom is the right path for some part of your business, the software engineering firm you work with matters more than the technology choice. A good one will push back on requirements that don’t make sense, suggest simpler approaches when they exist, and tell you honestly when something would be cheaper to buy. They’d rather lose a piece of work than build you something you’ll regret.
A bad one will quote whatever you ask for and build it whether it makes sense or not. You’ll end up with expensive software that solves the wrong problem.
Talk to a few. Ask how they handle discovery, what their process looks like, how they manage change requests. The conversation tells you more than any portfolio ever will.
And don’t get talked into an all-or-nothing answer. Most businesses end up with a stack that’s part bought and part built, sized against five years rather than next month’s invoice. That’s almost always the right place to land.