Build vs Buy: How to Make the Right Software Decision for Your Business

The build vs buy decision is one of the most expensive calls a business owner makes. Get it right and you save years of frustration. Get it wrong and you either waste $80,000 building something you could have bought for $200/month, or you spend five years wrestling with a tool that was never designed for how you work.

Most advice on this topic is useless because it comes from people with a stake in the answer. SaaS vendors say “buy.” Agencies say “build.” Neither is lying, exactly. They’re just answering from their own perspective.

Here’s how to think about it from yours.

The Real Cost of Buying Software

When people say “off-the-shelf is cheaper,” they’re usually looking at the monthly subscription and nothing else. That’s like saying a car is cheap because the sticker price is low, while ignoring fuel, insurance, servicing, and the fact that it doesn’t fit in your garage.

The actual cost of buying software includes:

Licence fees that compound. Most SaaS products charge per user per month. At $50/user for 30 people, that’s $18,000/year. And it goes up — most vendors raise prices 5-15% annually. Over five years, that $18,000 becomes $22,000+ without adding a single feature or user.

Customisation to make it fit. Out of the box, most software handles about 70% of what you need. The other 30% requires configuration, custom fields, workflow tweaks, and often a consultant who charges $150-$300/hour. Implementation budgets of $10,000-$50,000 are standard for mid-market tools.

Integration costs. Your new tool needs to talk to your accounting software, your CRM, your email platform, and your existing databases. Each integration is a mini-project — either through built-in connectors (which are often limited) or middleware like Zapier, which adds another ongoing subscription.

The workaround tax. When the tool can’t do exactly what you need, your team builds workarounds. Spreadsheets for tracking things the software doesn’t handle. Manual data entry to bridge two systems that don’t integrate well. Email threads to manage exceptions that the workflow can’t accommodate. These workarounds cost hours every week and nobody ever adds them up.

The Real Cost of Building Software

Custom software isn’t cheap upfront. Let’s be honest about that.

A purpose-built business application typically costs $30,000-$120,000 to develop, depending on complexity. That’s real money, and it comes before the software does a single useful thing.

But the cost profile is fundamentally different from SaaS:

No per-user fees. Add 10 employees next year? No extra cost. Open a second location? Same system. The software scales with you instead of against you.

Hosting is cheap. Modern cloud hosting for a business application runs $100-$500/month. Not per user — total.

Maintenance is predictable. Ongoing maintenance and feature development typically runs 15-20% of the initial build cost per year. That’s budgetable and within your control.

No forced upgrades. SaaS vendors ship updates whether you want them or not. Sometimes they remove features you relied on, or redesign the interface your team just learned. Custom software changes only when you decide it should.

The Five-Year Comparison

Here’s where the maths get interesting. Let’s compare a typical SaaS stack versus a custom build for a 25-person business.

SaaS Stack (Core Operations Tool + Integrations)

Cost Item	Year 1	Year 3	Year 5
Licences ($65/user/month, 25 users)	$19,500	$21,700	$24,100
Implementation & setup	$25,000	—	—
Integration middleware	$6,000	$7,200	$8,600
Consultant/admin time	$10,000	$8,000	$8,000
Cumulative Total	$60,500	$130,800	$212,700

Custom Build

Cost Item	Year 1	Year 3	Year 5
Development	$70,000	—	—
Hosting	$4,800	$4,800	$4,800
Maintenance & features	$8,000	$12,000	$12,000
Cumulative Total	$82,800	$107,400	$132,000

Custom costs more in year one. By year two, the cumulative cost is similar. By year five, the SaaS stack costs $80,000 more — and the gap keeps widening every year.

When to Buy (Seriously, Buy)

Custom software is not always the answer. Buy off-the-shelf when:

Your needs are standard. Email marketing? Use Mailchimp or ActiveCampaign. Project management? Asana or Monday.com. Accounting? Xero or MYOB. These are solved problems. Thousands of businesses have the same workflow, and the SaaS product is refined by millions of users. You won’t build anything better.

You’re still figuring things out. If your processes are changing every quarter, don’t lock them into custom software. Use flexible tools, experiment, and build custom once you know exactly what you need.

Speed matters more than fit. A SaaS tool can be live in a week. Custom software takes weeks to months. If the business need is urgent, buy now and build later.

Your team is under 15 people. At small team sizes, per-user costs are manageable and the total cost of ownership usually favours SaaS.

When to Build

Custom starts making sense when:

Your workflow is genuinely unique. Not “slightly different” — genuinely unique. If the way you quote jobs, manage projects, or serve customers is a competitive advantage, encoding that in generic software means losing what makes you different.

You’re duct-taping three or more tools together. If your operations require a CRM, a project management tool, a quoting system, and a scheduling tool, all connected through Zapier — and things still break — you don’t need better integration. You need one system that does what you actually need.

Per-user costs are becoming a line item. When your software subscriptions add up to a full-time employee’s salary, it’s time to run the numbers on custom.

You need data that works across your whole business. When your customer data lives in the CRM, your job data lives in the project tool, and your financial data lives in Xero — and nobody can get a complete picture without exporting everything to a spreadsheet — custom software gives you one source of truth.

The Decision Checklist

Run through these questions honestly:

1. Can you name a SaaS product that does 90%+ of what you need? If yes, buy it. The last 10% isn’t worth a custom build.
2. Are you spending more than $2,000/month on software subscriptions? If yes, start running the five-year comparison.
3. Does your team spend more than 5 hours/week on workarounds? If yes, add that cost to your SaaS total.
4. Are you growing your headcount by more than 20% per year? If yes, per-user pricing will hurt more every year.
5. Is your operational process a competitive differentiator? If yes, generic tools might be diluting your advantage.

The Smartest Approach

The businesses that get the best outcomes aren’t dogmatic about build vs buy. They buy for commodity needs and build for competitive advantage.

Use Xero for accounting — it’s excellent, and your accounting process isn’t a differentiator. Use Slack for communication. Use Google Workspace for email and documents.

But the system that runs your core operations — the thing that makes your business work the way it works — that’s where custom software pays for itself. Not because it’s better technology, but because it’s your technology, built around your processes, scaling with your growth, and not charging you more every time you hire someone.

The best time to evaluate this decision is before you’re in pain. The second-best time is now.