Finance

Build or Buy Decision Calculator

Compare the total cost of building in-house vs buying/outsourcing over time.

Build (In-House)

Upfront Build Cost ($)

Monthly Operating Cost ($)

Buy (Outsource)

Setup / Migration Cost ($)

Monthly Cost ($)

Time Horizon (months)

Method:
Total Build = Upfront + Monthly × Months
Total Buy = Setup + Monthly × Months
Break-Even Month = (Build Upfront − Buy Setup) / (Buy Monthly − Build Monthly)

Build vs Buy Framework

Building in-house typically has higher upfront costs but lower ongoing costs. Buying/outsourcing has lower upfront costs but higher recurring fees. The break-even point tells you when building becomes cheaper.

Beyond Cost: Other Factors

Control: Building gives more customization and control
Speed: Buying is usually faster to deploy
Expertise: Building requires specialized knowledge
Risk: Building carries execution risk; buying carries vendor risk
Scalability: Consider how costs change at 2× and 5× scale