Custom software: what if you proposed the budget?

In short

• You give your budget. We show you a reference estimate, how it is calculated, then two or three compatible scopes.
• There is a floor, but its amount is never shown. A single counter-offer, no bidding war.
• The quote is at a firm price and, by default, is paid in three instalments, at project milestones. After acceptance testing, you are offered a value bonus. It remains optional.

How much does custom software cost? For an SME owner, the usual answer (“it depends”) does not help to decide. At Kendu Intelligence, we ask the question the other way round. You say how much you want to invest. We show you what that budget can build, and how we calculate it.

This is not “pay what you want”. Here is how it works.

Why “pay what you want” does not suit custom software

An experiment published in 2010 in the journal Science involved 113,047 people at a large amusement park. After a ride similar to a roller coaster, they were offered the souvenir photo taken during the ride.

• At the fixed price of 12.95 dollars, 0.50% of participants bought the photo.
• When everyone paid what they wanted, 8.39% bought it, but for 0.92 dollars on average.
• When, in addition, half of the payment went to a charity, 4.49% bought, for 5.33 dollars on average.

For the park, this was not a failure: according to the authors, the version with the charity was even the most profitable. But the photo was already taken. Selling one more photo cost only its printing. Custom software, on the other hand, requires human work for each client.

The case of the Panera Cares cafés points the same way. The Panera chain opened five of them in the United States from 2010, and everyone paid what they wished. According to AP, the last one, in Boston, was due to close in February 2019, and the company would only say that these cafés were “no longer viable”.

A laboratory study by Krämer, Schmidt, Spann and Stich (2017) compares two formulas. “Pay what you want” can work very well if the cost of each extra sale is not too high and if the formula also brings an advertising effect. The “name your own price” formula, where the customer's offer is accepted only if it exceeds a threshold set in advance and kept secret by the seller, remains usable when that cost is high. This is the case with custom software: each project takes up human time, review and testing. Our mechanism is inspired by this second formula.

Our rule: the budget sets the scope, not the other way round

The scope is the list of what the software will do. Usually, you start from the scope and arrive at a price. We start from your budget and arrive at a scope.

Ryan Singer, in Shape Up, his book on Basecamp's way of working, calls “appetite” the time a team agrees to devote to a project. He writes: “Estimates start with a design and end with a number. Appetites start with a number and end with a design.” We apply the same idea to your budget.

Your budget stays yours. What adjusts is what we build with it.

One clarification: this mechanism applies to software ordered as such. An AI agent is an automated helper that carries out tasks for you. The small tools we build to make it work remain included in the quote for its set-up.

How it works: your budget, our reference estimate, two or three scopes

1. You describe your need and give your budget, excluding tax, as an amount or a range.

2. We give you a reference estimate. It is a range, with its method: hours of human work, cost of the AI used, review, testing, project management. You see where the figure comes from.

3. We propose two or three scopes compatible with your budget:

   • Essential: the useful minimum;
   • Recommended: what we advise;
   • Extended: if the budget allows.

   Each scope states the functions included, the timescale and what is left for later.

4. A scoping call confirms the need before any commitment.

Let us take a typical, fictional scenario. An SME with 30 employees manages its job schedules in spreadsheets and proposes a budget. The Essential scope covers a shared schedule and entry from a phone. The Recommended one adds alerts when two jobs overlap. The Extended one adds a space where its own clients follow their jobs. The owner chooses knowing what they get and what they postpone.

The floor and the single counter-offer: no bidding war

For each scope, we calculate an internal floor: the estimated full cost, plus a minimum margin. This floor is never shown as a price.

Two cases arise:

• your budget reaches the floor: the proposal is acceptable straight away, subject to the scoping call;
• your budget is below the floor of the smallest useful scope: we make a single counter-offer (a reduced scope or a minimum amount). If that is not enough, we tell you frankly and point you to another option, for example an existing tool or a “no-code” tool, which you configure without programming.

No bidding war: the same project can be re-proposed at a lower price only once. An endless negotiation costs everyone time. And someone who states an honest budget from the start should not pay more than someone who haggles.

The floor is not set once and for all. It will be recalculated from the real costs of delivered projects, and each change to the formula will be dated and recorded.

Firm-price quote, payment in three instalments

The accepted amount becomes a firm-price quote, signed before any work. For the signed scope, the price does not move. We prefer to fix the price together, in writing, before starting.

Payment is by default made in three instalments:

• on signing the quote;
• on approval of the specification (the document that describes precisely what the software will do) and of the first demonstration;
• at acceptance testing, that is, when you check that the delivered software does what was planned.

The share of each instalment and the means of payment are set out in your quote.

The value bonus after acceptance testing, always optional

Once acceptance testing is passed, we ask you a simple question: if the software is worth more to you than what you paid, would you like to top it up? This bonus is invoiced separately. It is never required.

Why afterwards? Researchers (KC, Mak and Ofek, Journal of Marketing, 2023) studied the formulas where everyone pays what they want. When the value of the product is high, people pay more after receiving it than before. When it is low, this effect weakens and can even reverse. The bonus therefore comes at the moment when you can judge from the real thing.

Our balance does not depend on it: the firm price already reaches our floor.

Market price benchmarks to place your budget

Here are three benchmarks taken from other providers' websites on 13 October 2026. They are not our prices, and the scopes vary a lot from one provider to another. These pages do not always state whether the amounts exclude tax.

A SaaS is online software sold by subscription to many users. These ranges do not describe the same work: a simple internal tool and software sold to thousands of customers do not require the same effort.

A tip: estimate what the problem costs you today (time spent, errors, re-keying), then what you can invest without straining your cash flow. That figure is the right starting point. The reference estimate will tell you what it allows you to build.

Going further

• Custom software: the offer in detail and how to propose your budget.
• Our method: how we scope, build and deliver a project.
• Data and security: where your data is hosted and who has access to it.