Idea, plan, and implementation. These are 3 cornerstones of any project’s success. In the constantly changing modern IT world, it’s impossible to forecast success with 100% confidence. However, if you pay enough attention to each of these cornerstones, your chances to reach the top grow.
However, some entrepreneurs skip the stage in which they should create an app business plan. These people often believe practice to be a better way to reach the expected results, hoping spontaneous decisions can build the road to the top manufacturers' list. Unfortunately, this type of approach leads nowhere.
We have carefully analyzed issues that our clients and partners have come to us with, measured the performance of their projects and analyzed how a tech startup business plan impacts the overall company’s success. Today, we will explain the importance of a business plan and guide you through the main steps of developing your own.
Why You Need a Business Plan for Your Mobile App
Mobile apps brought an unexpected revolution to the digital era. The number of unique and useful apps increases daily.
Just a year ago, the number of applications available on the App Store exceeded 2.2. million.
The mobile industry is forecasted to bring in almost $190 billion of revenue in 2020.
If you would like to join this beneficial industry, and already have a great app idea, it’s time to take the next step towards your goals and bring into being a great app business plan.
But first, let’s clarify why you actually need a brilliant business plan for an app.
Attracting great minds and great investments
Depending on the type of business model you want to use, you have to decide between startup co-founders or investors. In some cases, you need to attract both. An application business plan is your sole way to fulfill this task quickly and proceed with more significant steps towards your company’s growth.
Reducing the risks
Recent reports show that writing a business plan will bring you closer to your goals and ambitions. Entrepreneurs with extensive business plans are more likely to develop their company and increase their revenue than those who without a plan.
Planning is a simple way to secure loans and investments.
Keeping to the defined strategy
In a world full of interruptions, it’s hard not to miss the important things. Every day you, as a startup owner, will face new issues and obstacles. But a set of points on your blueprint will act as a quick reminder of why you started it and where it should take you.
“By failing to prepare, you are preparing to fail.” ― Benjamin Franklin
Benjamin Franklin wasn’t involved in software development, but these words highlight the app business plan significance. By writing a plan, you are enhancing your knowledge about the market you plan to break into. This will clarify your goals, set your priorities and help you build more accurate forecasts. It’s your chance to reveal possible risks and find your own voice in the industry.
Managing and delegating effectively
Being a good manager is an art. A mobile app business plan is your tool for creating a masterpiece. It provides a vision of critical tasks, helping you delegate each of them to the responsible person.
An App Business Plan Template
Now that you know how meaningful a business plan is for any project is, let’s find out what it actually is. Typically, a business plan is a set of:
bullet points describing your vision.
some statistics providing real numbers about the industry you plan to enter.
tables with defined steps and strategies you would like to implement to reach your goals.
Is the product viable? Does it have the potential to bring new experiences to the user and measurable benefits to its founders? Those are 2 primary questions your app business plan should answer. Include the following components to make your triumph inevitable.
Section 1. Executive Summary
This is the introduction to your business plan. This is the first thing your potential investor will see when becoming acquainted with your idea. Make it clear and remarkable, and answer these questions in your summary:
What problem do you want to solve?
Even though the market is chock-full of different solutions, consumers always face some obstacles and complications. You need to find these problems and identify the one that you can solve. Analyze your target audience’s needs at the moment, why the existing solutions do not satisfy these needs, and what you can offer to solve this problem.
What is your solution?
First of all, make sure your project is capable of addressing this problem. Then, introduce your idea but do not dive into details. This is not the right moment to introduce the functionality to investors. It’s time to generally highlight what your app will do to make app users happy.
How will your app change the market?
Answering the first question, you have possibly come to the conclusion that similar solutions already exist. Provide proof that your app is better than other apps. Share facts, numbers, and forecasts; avoid using clichés and make your answer as profound as you can.
What goal are you pursuing?
The primary goal of any business is financial return. In this section, you need to explain what your goal looks like, provide your vision of the app’s future, state how many users you expect to download your app, and what profit it will bring. Visualize your short-term plans and enhance your answer using metrics.
Section 2. Make a Business Description of Your Company
Create an attractive overview to increase interest. This section is how you get closer to potential partners by presenting the following things:
Basic info about your organization
Either your company is an LLC or another entity, the potential investor should know this. The company’s structure defines the way processes will be organized in the future.
Location is essential. If your team works remotely, mention it, too. And don’t forget to emphasize the reasons you have decided on this location or opted for remote collaboration.
A few words about the history
People like storytelling. So explain the company’s history. How did you come up with the idea of founding your own business? What did you start with? Make your story short but catchy so you can win the reader’s attention.
The app startup business plan should include details about your team so you could get even closer to the reader. By adding a few words on the company’s specialists, you can turn a boring description into a virtual introductory meeting.
Tell the potential investor about your managers. Provide information about the engineering team. Specify names, positions, experience, and even hobbies. Writing your app business plan, make the readers feel like they know the people you talk about.
One more actionable tip is to provide details about your advisory team. These experts help you with decision making, and their names can make a difference in the local market.
Section 3. Market analysis
To launch an app startup, you should know everything you can about the industry you are entering. By understanding its past and present, you can impact its future. This stage moves a hypothesis to real statistical data.
How big is the market?
To answer this question, you must analyze the following factors:
Total Available Market, or market demand for your app.
Serviceable Available Market, or the number of users you are able to reach out to.
Serviceable Obtainable Market, or the segment of your first users.
How does the market change?
Compare and analyze the market size 5 years ago and now. What has changed? How many influencers have broken into the market? How many failed? The amount of money spent in the industry will make your own potential income clearer.
What is the customer persona?
The only way to develop a legendary app is to look at it through your customers’ eyes. This is why you need to understand the target audience and create a portrait of your customer. A customer persona is a detailed description of what users that install your app look like. Define gender, name, occupation, education, hobbies and daily challenges they face. This is a portrait of the real person your app will serve.
Section 4. Marketing strategy
A solid mobile app business plan should describe how your app will get to potential user smartphones. Let’s have a glance at our step-by-step guide on how to build a successful marketing strategy:
Identify the channels you can acquire customers from
Today, social media marketing is considered the most effective way to promote a product. But will it be enough for your app? Go back to the research phase and find out how many potential users you are able to meet on Facebook, Instagram, or Twitter. Provide the readers with information on what channel may be most profitable.
An app landing page is an excellent way to reach out to your target audience, too. Develop an engaging mockup and provide the partners with information on how many customers will find out about your product from a landing page.
Decide on metrics
During the beginning stages, your success will be measured with the number of installations or conversion rates, not with financial revenue. So decide what metrics will be useful for your project’s evaluation.
Consider participation in referral programs
Referral programs could become your growth fuel. Decide on which companies to collaborate with and explain to the app business plan readers why this cooperation is expected to be fruitful.
Don’t forget to optimize your website and mobile application to improve SEO. And remember:
“Be undeniably good. No marketing effort or social media buzzword can be a substitute for that.” - Anthony Volodkin, Hype Machine founder
Section 5. Define Your Competitors
If you are not Elon Musk, you definitely have competitors. And if you have competitors, you should learn from them. Make sure your business offers unique functionality and has the ability to cater to users’ wishes like no other tool could. But at the same time, be aware that there will always be someone doing something similar.
Know your competitors. Study the market and increase your awareness of potential rivals, as well as their history and capabilities. Study their weaknesses and brainstorm how to turn these into your strengths.
Section 6. Choose a Monetization Strategy
As we reach the finish line of your app development business plan template building, we will talk about finances. Running a non-profit project is good, but when it comes to mobile apps, which have a market of billions of dollars of revenue annually, the monetization strategy deserves exceptional attention.
How can you turn your efforts into financial profit?
- Use advertising
You can simply advertise other products with your mobile app. This is one of the fastest and easiest ways to monetize it. However, you should have an impressive number of active users to implement this strategy.
- Charge a fee for installation
There are so many free apps all over the web that users ignore the paid ones. Be ready to demonstrate unique features to convince users to install your app.
- Add a Paid Account option
Offering a free trial is an attractive option. After the trial period ends, allow an account upgrade. If your app demonstrates good performance and powerful functionality, it is very likely that users will be ready to pay for it.
Choose your strategy before you start your sample business plan. Potential partners and investors will not support your idea unless the monetization strategy is well-defined and clear. So be ready to answer questions about what financial profit you expect to make from this app.
Section 7. Startup Costs & Funding
Did you know that one of the key reasons startups fail is financial issues?
29% of companies simply run out of cash and 18% of companies have other types of cost issues. Now, when you are closer to your first technology startup business plan example than ever, consider the importance of costs and funding for your business.
Why is the financial component of planning so important?
It is vital for you to understand what type of funding you need to get your app up and running.
Your potential partners must know how much money you need.
Your startup financial model should reflect the forecast for the next 3-5 years. Add the following data to your plan:
Talk about required funding
You have a rough estimation of how much money you need. Try to foresee possible issues. A backup financial plan may be useful, too.
Specify payment frequency
Some costs should only be paid once. Other costs, like salaries or maintenance costs, are repeatable. A detailed financial plan is the final thing you need to provide in your application business plan.
Strive to create an excellent app business plan, keeping in mind the following tips:
Make it simple and clear.
Be professional and realistic.
Proofread, then proofread it again. Also, don't neglect grammar checkers like Grammarly. Such a tool will not only correct your spelling or grammar but also advise you on the style of your writing.
Isn’t it exciting? Now you know how to write a business plan for an app! Now you are one step closer to fruitful business relations and considerable funding to bring your idea to life. And now you are one great step ahead of your competitors.
We have seen dozens of business plans on our path. Now we can say for sure which plan is the right first step to great achievements in the future.