If you’re reading this, you probably have a great idea for a web project or an app. I’m pretty sure you have some ideas about how to do it. You may have a friend of a friend who can develop everything at a low cost and with great quality, you’re thinking of hiring a bunch of guys who work at a garage in India, put together a group of freelancers, hire an outsourcing software development company and if you have the knowledge you might even try to do it yourself. The most common options would be to hire a freelancer or a software development company.

Freelance developer coding on his laptop.

Freelancers are independent professionals that have a specific skillset. They either work for one or few companies who hire them on a contractors or have their own clients and are self-employed. A software development company is a multidisciplinary team of professionals that offers full-cycle services from consulting to product maintenance.

Before the product development - you must decide Who can you trust? After all, it is your idea, it has to be someone you trust. In a world full of start-ups, there’s no standard solution. Every project is different, and small and medium-sized businesses often need custom software solutions to tackle their biggest challenges.

That’s why there isn’t a uniform answer to the question. We can’t tell you whether freelancers or software development company are the ‘better’ choice, but we will highlight the pros and cons of each to help you make the right decision. 

When to hire a freelancer?

It depends on each case. However, a freelancer is an excellent option for certain tasks and specific activities. If you have the resources and platforms to hire a team of freelancers, you can work on projects and develop products. But, be careful! Coordinating the work of several people who work separately and practically independently can be a difficult task.

Let’s see the pros of hiring freelancers

  • Normally, freelancers have lower rates than companies, approximately you can expect to save 20-30% compared to the cost of hiring a software development company. You are not paying overhead costs such as health insurance, and you’re not paying for the office space or supplies.

  • Freelancers are highly skilled and often have a solid expertise in one specific area. As we already mentioned above, a freelancer is a great option for certain tasks and specific activities.

  • You can easily find freelancers who work in multiple areas on Upwork, Elance, Hub staff Talent, Guru, etc. Once you find them and both of you agree on the terms, they can start working right away.
Freelance developer working on his desktop computer.

It sounds great! Why don’t everybody hire a freelancer?

  • One freelancer probably will not be able to do a complete project. If someone tells you that he is good at UI/UX design, software quality assurance, software development, programming mobile apps, etc, you can bet that they won’t be equally skilled in all areas, or to go one step further, they’ll probably be quite bad at some of the listed areas.   

  • After completing a project, they can decide to stop working with you. They don’t provide further maintenance. If bugs appear, you will need to hire other people to fix them.

  • Because of the big demand, not all freelancers are working to get returning clients. The quality of your product or company success is not always their priority.

  • Some freelancers lack soft skills. They might be excellent at their (technical) work but can’t plan and organize their own work process.

Team of engineers planning.

The main difference between software companies and freelancing is the team of professionals. A software company should have professionals who do all types of work in one particular field. For example, if you hire a software company, they won’t only have a backend programmer on their team, it is likely that their team would include professionals who also do mobile development and design.

Hiring a software development company is the best choice if you have a long-term project and you need professional work and working relationships, quality products and security.

Software development companies usually have different experts on board (project managers, software/web developers, UI/UX designers, business analysists, QA Engineers, SEO specialists) to ensure full cycle of services.

They work with agile methodology and the whole development process is divided into sprints/iterations which is great for supervision and possible amendments.

Pros of Software Development Company

  • As we already mentioned above software development companies provide all kinds of services, including consulting. In addition to development, these people can tell you which technologies and software solutions would be appropriate for your project. If you have a start-up, they can help you with the monetization strategy. With a software development company, you get the full package. Their teams are hand-picked and consist of professionals. 

  • A software development company cares about the results and it reputation, so you can be certain that their work will be coordinated, there’ll be well-tuned development workflow and it is more likely that the deadlines will be met. You’ll get to communicate with a team of professionals that are available at most times, open and responsible. You can make changes, but you won’t have to deal with minor issues, as the company would have a project manager or a team leader that will be on top of these things.

  • Experience! Software development companies have probably worked on many projects and employ several developers with experience with different technologies, frameworks, libraries, etc.

  • A software development company strives to develop high-quality products in order to get positive feedback after the launch and tends to build a relationship of trust with the clients.

  • When we talk about long term relationships, we also mean constant maintenance of the current products, changes, new features, updates, bug fixes.

  • As business entities, software development companies offer and guarantee stability, reliability and less risk. They usually have a lawyer or a legal representative who prepares contracts and other documents to start the project.

Group of software engineers working together in a bright office environment.


  • Software development companies have expert developers and their services can cost a lot more compared to the services of freelancers. It’s inevitable to have a higher cost, especially if your project team includes more developers, a QA engineer, a designer, etc.

  • There is a big rate difference between software development companies depending on the region, i.e. where the company is located. Hiring a company based in India can be quite cheap, whereas if you want to hire a company that’s based in the US or Western Europe, it could cost you a fortune. Eastern Europe is interesting, as it has an evolving IT industry with experience and skilled developers at a mid-price range. The large price discrepancy can be confusing, so make sure you know the level of quality you need, the cheapest offer isn’t always the best option.

To sum things up, freelancers are cheaper and definitely a good option for a short-term project and specific tasks, but as they work on multiple projects, sometimes can be less predictable and you can end up paying more. 

If you need a complex, sophisticated enterprise solution with multiple functionalities you should go for a software development company. It can be pricey, but it ensures the highest quality end-product, and it can save you a lot of time and effort.

Finally, the most important thing is to find someone that can deliver the expected result. You shouldn’t decide based on cost alone, also make sure to protect your intellectual property and make sure you understand all legal consequences.