You need software. Maybe an internal tool, a client portal or an integration between two systems. The first question you ask yourself: do I build it myself, hire a developer, or outsource it to a specialist?
The honest answer: it depends on your situation. But there are clear guidelines. In this article I compare the three options side by side — with real numbers and the pitfalls I encounter in practice.
Option 1: Hiring a developer full-time
The most obvious choice if you need ongoing software development.
Pros:
- Full control over priorities and planning
- Knowledge stays in-house
- Direct communication, no external dependencies
Cons:
- Cost: a mid-level developer costs €55,000–€85,000 per year in salary, plus employer costs, hardware, tooling and mentoring
- Hiring takes 3–6 months on average in the current market
- A single developer has a limited skillset by definition — front-end, back-end, infra and design in one person is rare
- If they're sick or leave, you're stuck
When it makes sense: when you have continuous (30+ hours per week) development work and can manage a technical team.
Option 2: Hiring a freelance developer
More flexible than a full-time hire, but with its own risks.
Pros:
- Flexible scaling up and down
- No long-term commitment
- Often specialized knowledge available
Cons:
- Hourly rates of €75–€150 add up quickly
- Availability isn't guaranteed — good freelancers are often fully booked
- Quality varies enormously — no team reviewing the work
- Knowledge transfer is a risk when the freelancer moves on
When it makes sense: for short-term, well-defined tasks where you can provide technical direction yourself.
Option 3: Outsourcing to a software partner
A studio or specialist that handles the full process: from analysis to delivery.
Pros:
- Broad skillset without hiring multiple people
- Experience with similar projects — faster past the pitfalls
- Fixed price or sprint-based, so predictable costs
- Documentation and handover are part of the delivery
Cons:
- Less direct control over daily priorities
- Communication requires clear agreements
- Large agencies can be more expensive due to overhead
When it makes sense: for scoped projects where you want results without building an internal team. Especially effective when you choose a small-scale partner where the engineer doing the work is also the person you talk to.
Costs side by side
For a mid-sized project (for example an internal tool with API integrations, 3-month timeline):
- Full-time developer: ~€25,000 (3 months salary + overhead) — but you keep paying after the project is done
- Freelancer: €30,000–€50,000 (400–500 hours × €75–€100)
- Software partner: €20,000–€50,000 (project price, including analysis and documentation)
The difference isn't just in price, but in what you get: a partner delivers a finished product, a freelancer delivers hours, a full-time hire delivers ongoing capacity.
Common pitfalls when outsourcing
1. Choosing on price
The cheapest quote almost never wins in the long run. Always ask: who does the work? Is that the same person you're talking to?
2. No technical point of contact internally
Outsourcing only works if there's someone internally who can make decisions. Without that person, every project gets stuck in alignment.
3. Not defining scope upfront
"We'll see what's needed" leads to endless timelines and rising costs. A good partner helps you define the scope before anything gets built. I wrote more about this in why software projects fail.
My advice
There's no universally right choice. But for most SMBs that need software for a specific problem, outsourcing to a specialized partner is the most efficient route. You get a broader skillset, predictable costs and a delivered product — without the overhead of hiring and building an internal team.
Not sure which approach fits your situation? I'm happy to think along — no strings attached.