How to use the Build vs Buy Calculator
This calculator compares the total cost of buying a SaaS tool with the cost of building custom software over the same number of years. The buy side adds subscriptions, a setup allowance and a cost for gaps in fit; the build side adds the build cost and yearly upkeep. It then shows which is lower and by how much. It is for founders, operations leads and anyone writing a build or buy case.
Step by step
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Set the team size
Drag Team seats (users) to the number of people who will use the software. The slider runs from 3 to 1,000 and starts at 50. Seats only change the buy side, because SaaS is billed per user.
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Enter the SaaS price
Type the monthly price per user in SaaS price per user / month. The default is $40. Use the price of the plan you would actually need.
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Pick a time horizon
Choose 3 yrs, 5 yrs or 7 yrs under Time horizon. The default is 5 years, and both totals are worked out over the same span.
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Enter the build cost
Type a one time figure in Estimated custom build cost. The default is $150,000 and the arrows move it in steps of $5,000.
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Rate the off the shelf fit
Under How well does off-the-shelf fit?, choose Poor (about 45%), Partial (about 70%) or Strong (about 90%). Partial is the default. A weaker fit adds a larger gap cost to the buy side.
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Set yearly maintenance
Drag Custom maintenance / year between 10% and 25% of the build cost. It starts at 18%, and the hint under it notes that 15 to 20% per year is the usual range.
Reading the result
- The large number under Lower-cost option is the gap between the two totals, and the line below it says which side wins and over how many years. With the defaults it reads $137,700, cheaper to buy off-the-shelf over 5 years.
- Buy (SaaS) TCO is seats × price × 12 × years, plus a setup allowance of 20% of one year of subscriptions, plus a gap cost of half the build cost times the share the tool does not cover. Defaults: $120,000 + $4,800 + $22,500 = $147,300, shown as $147k.
- Build (custom) TCO is the build cost plus build cost × maintenance % × years. Defaults: $150,000 + $135,000 = $285,000, shown as $285k. The cheaper card is highlighted and the two bars compare the totals.
- The verdict box names the winner. When buying wins but the fit is Poor, it adds a warning that the workaround cost is real and to revisit the choice if headcount grows.
Tips and common mistakes
- Seats can flip the answer on their own. A build costs the same for 10 users or 1,000, so also try the head count you expect in a few years, not only today's.
- The setup allowance and the gap cost are fixed rules in the formula, not quotes. If you know your real onboarding or workaround cost, compare it with the setup/gaps figure in the formula line.
- Every year uses today's prices. The calculator does not add SaaS price rises or discount future spending.
- If you are unsure of the build cost, run the calculator at a low and a high estimate and see whether the winner changes.
Privacy and limits
All the arithmetic runs in your browser as you move the controls. Nothing you enter is sent anywhere or saved, so reloading the page puts every field back to its default.
How the build-vs-buy math works
Every honest build-vs-buy decision comes down to total cost of ownership (TCO) over a realistic horizon, not the price on the pricing page. This tool models both paths:
Buy = seats × price × months + setup + cost-of-gaps
Build = build cost + (build cost × upkeep % × years)
Two forces decide it. First, seats: SaaS bills per user, so its cost climbs with headcount, while a custom build is a fixed cost that gets cheaper per user as you grow. Second, fit: when an off-the-shelf tool only covers part of your workflow, the gap doesn't disappear, it becomes manual workarounds, spreadsheets, and lost hours that compound every year. We price that gap in so the comparison is fair.
When buying usually wins
- A standard tool genuinely fits how you work (strong fit). Clinical records are the clearest case: practices buy a certified EHR and build around it.
- Your team is small and seat counts are stable.
- You need it live next week, not next quarter.
When building usually wins
- Off-the-shelf fit is poor and you're stitching tools together.
- Headcount is growing and per-seat pricing is climbing against you. Brokerages paying per agent can follow our real estate CRM seat math.
- The software is a competitive edge you want to own outright. Outsourcing the build can still leave the code in your name.
For real numbers on the build side, run your scope through the software development cost calculator, read the full build vs buy guide, or see all free tools. If the system will serve several departments, see how we scope an enterprise system before you run the numbers. Weighing a custom PSA against an off-the-shelf one? The signs a consulting firm has outgrown its PSA tool and the five criteria to compare are on our professional services page.
