It is simple to come up with an app idea. However, planning for business demands is both time-consuming and critical!
If you opt to design an application without conducting research, you risk developing a product that you believe people will need but in reality they do not. This includes describing the target and preparing use cases and features that will appeal to that audience.
Thus, it is essential to have a business plan for a mobile app. A business plan serves as a reminder of all the important details that must be attended to during the creation of a mobile app, in addition to being helpful during the project’s early planning and discovery stages.
Without further ado, let’s get right to the topic of our discussion: “How to Write a Business Plan for Mobile Application Idea?” or “How to Build a Business Plan for a Mobile App Startup?”
How to Write a Business Plan for a Mobile Application
1. Detailed Summary
Somewhere has to be your starting point! As a result, you should give extra attention to the synopsis of your comprehensive mobile app business plan, as this will be what potential investors see first.
Things that make this part perfect are: explain more while writing less, avoid mentioning how the product works, and so forth. Instead, concentrate on the market scenario and targeted users, and ensure that the following processes are followed-
- Concentrate on the issues at hand.
Problems are something that is always present. That is, there is always space for growth and innovation. What you need do here is assess the problems that people are having with the present solutions and determine –
- Users’ current requirements and expectations
- Problems people have with similar items to yours
- Why these solutions fail to satisfy – what do they lack that you can supply in a better and different way.
- Describe the solution you have in mind.
When outlining the answer to a problem, try not to go off course. That is, don’t discuss the features and operation of your app; instead, concentrate on the issues at hand and how your app solves them.
- Specialized Value Addition
Here is your chance to brag about the features that set your app apart from those of other businesses and solution providers. Not only superior, but unquestionably unique.
- Final goal for your app
When all is said and done, it ultimately boils down to these: the objectives you want to accomplish with your app.
You MUST outline your app’s future goals, including how many downloads you hope to get at first, how much money you hope to make, and much more. It is advisable to put your short-term plans into visual form before using analytics to enhance your response.
2. Overview of the Company
The next stage in creating an extensive and compelling business plan is gathering information about your organization. The items you listed in the previous section might not be as tempting to investors as you think because the future is unclear.
Startups are known to be chosen for funding by organizations such as TechStars and Y Combinator, among others, depending on the founders and team. You can see how important this area has suddenly become to you. Furthermore, it would be beneficial if you could share details regarding the MVP or prototype that you have created.
The topics you need to discuss here are:
- Give an overview
To help investors comprehend your company and gain confidence in it, you must provide answers to a few questions in this area.
- What kind of entity are you? Is it a privately held company or an LLC?
- Where is it kept as its location?
- Duration: How long ago was the organization founded?
- How many people work for your company?
- Do you also conduct business offshore?
- What issues does your organization now face?
- What is the company’s ultimate objective?
- What do you vision?
- Take it from the top
Similar to writing a narrative, you have to recount the history of your company while skipping over all of the early inspirations, issues, and business app concepts that you ran into.
Enumerate all relevant historical information about your business, as it could be quite detrimental to exclude any important details from investors and then expose them later. It can cover things like the places you’ve worked, early hires, significant changes in direction, product launches, and so forth.
- Team management
Keep in mind that every individual working for your firm is a vital part of the machinery that runs your business. For this reason, in addition to specifying the organizational hierarchy, you must provide the names of all management members and all pertinent information about them, such as their qualifications, professional experience, area of specialization, and KRAs.
- Advisory Board
Nearly all mobile app development companies have an advisory board supporting them. Experts in the field with years of experience make up the panel. They are typically the creators of a few popular apps. Making a list of these advisors will greatly enhance your reputation and brand image, increasing your chances of receiving funding.
3. Everything Concerning the Industry
Essentially, a specific industry will be the focus of your final work. Therefore, it goes without saying that, as an entrepreneur, you should be well-versed on every important detail pertaining to your desired business, from market history to current trends.
- Market size
The size of the market is the most fundamental element you need to understand and include in your app startup business strategy. The terms “total available market,” “serviceable available market,” and “serviceable obtainable market” refer to the market demand for the app, the number of users you can target, say, in three to five years, and the section of your initial customers in six to twelve months.
- Stay updated on market projections.
To get insight into future projections, you must comprehend the market’s past, present, and future. Here, comparing and analyzing the market sizes over the last five years is the best course of action. You should also include information about the number of new entries, total fundings, and other relevant factors.
- Comparison of competitors
Any business on the planet needs to have a competitive analysis in place. All organizations, regardless of their size, industry, or other characteristics, adhere to this step faithfully.
Angel investors have been courted by a number of models that revolve around this. Among the numerous models, the one we suggest is the 2 x 2 matrix model, where the variables represent these four characteristics: visionaries, leaders, niche players, and challengers. These four parts are presented using an x-y axis scale to emphasize the app’s execution and vision as it develops.
- SWOT analysis for self-evaluation
All firms employ the SWOT analysis, which consists of four components: strengths, weaknesses, opportunities, and threats, for self-evaluation. It helps you to effectively and methodically explain your company’s circumstances in an organized manner in your app development business plan.
4. Marketing Strategy
A strong mobile app marketing plan is the most powerful tool since it serves as a conduit between your app and the end customers. It is your responsibility to create a marketing plan that serves as a “deal-sealer” between your company and the investors. This will demonstrate to potential investors that you have the means of getting your program onto customers’ cell phones through an app store.
You can incorporate the following points into your marketing strategy:
- First, describe the user persona.
Making user personas is a great idea. While you are conducting market research, you should be able to recognize this. You must include information about any additional user personas in your app development business strategy. Angel investors will view your company plan as more promising the more detailed it is.
The following details must be included in the user personas: location, income category, occupation, gender, age, and marital status. Additional details categorized as psychographic data include financial attitudes (price-sensitivity or value-shoppers), app usage context, goals for work or personal use, interests, favorite websites and apps, tech-savviness, and more.
- Strategy for acquiring customers
Your app’s user personas can be used to help you decide on your client acquisition strategy. Your client acquisition cost, or CAC, is one item about which you must be positive. Once you’ve decided the marketing campaigns and channels to use to promote your mobile app business strategy that highlights your app’s USP (unique selling proposition), you can calculate the appropriate cost.
- Growth fueled by products
Modifications to product-driven growth are among the most frequent components of a startup’s pivot. It is crucial that you include a referral program in your mobile app business model if your company plan requires a sizable user base of mainstream users in order to take advantage of network effects. Uber is a well-known and successful mobile app business plan example. For example, Uber rewards users who refer others with coupons for their next ride, and the person they suggest is rewarded with coupons for their first ride.
- Create a landing page.
You can benefit greatly from a landing page in a lot of ways. One benefit is that it can assist you in broadening your scope in terms of potential customers. It informs and refreshes readers on new developments and upgrades to your app. Make sure it includes your app’s name, description, promotional videos, and other information while you’re at it.
- Establish your primary metrics.
You can gauge the success of your mobile app and the growth of your business using a number of measures. You have to mention this in your business plan for the website or mobile application. Selecting the appropriate metrics for your business model requires caution. For instance, if your software is a social media app, daily active users should be your preferred key performance indicator rather than downloads.
5. The Strategy of Operation
Declaring your plan in relation to your day-to-day operations gives investors the idea that you are aware of and prepared, which is always beneficial. This covers your customer relations approach as well.
You need to lay out exactly how you’re going to manage customer service and uphold quality control. It also covers the execution and management of the app development process. Additional topics to discuss in this area are:
- Users’ Process
You can talk about things like how your users will act when they first discover and use your app, for example, and how they will act during the entire experience.
- Employee schedule
This lists every piece of information on the workers. It involves a number of issues, including when and how to hire staff, how to deduct expenses for compensation, how to establish organizational structure, and much more.
6. Financial Plan
At this point, you could genuinely say, “Let’s talk numbers.” The answers to the questions about how you plan to make money are what the investors would want to see in this part. How much will it cost to operate the business? What is the anticipated budget for the mobile application? How much money do you need, too?
- Create a plan for app monetization.
Similar to marketing, you must have a successful plan for monetizing your mobile app; this is something we go into great detail about in our post “How to choose the right pricing strategy for your mobile app project.”
- Initial costs
CB insights reports that 20% of startups fail as a result of being outnumbered. As you can see from the graph below, 28% of businesses fail because they run out of money.
By considering the expenses you might incur, you can prevent this outcome. In a similar vein, it is imperative that you provide the investors with every detail regarding the fees and expenses you anticipate incurring, along with their intended use.
You should include one-time costs, recurrent costs (rent, inventory, etc.), fixed costs (rent, utilities, etc.), variable costs (i.e., staff salaries), and a host of other expenses because the devil is in the details.
- Funding required
This is the point where you will request money and disclose any relevant details. In this section, respond to these inquiries.
- What is the amount of money you need?
- What proportion of stock would you like to give back in exchange?
- Will this be preferred stock or a convertible note?
- How long will this funding last before you have to apply for another grant round?
It’s time to sit down and consider the “why” behind writing a business strategy for your mobile application now that we have covered the process in detail.
Why Write a Business Plan for a Mobile App?
According to statistics, paid downloads and in-app advertising from mobile apps are expected to bring in over 935 billion dollars in income by 2023.
According to a different Statista analysis, 299 billion apps are expected to be downloaded globally each year by 2023.
You may now appreciate the significance of mobile applications and the need of developing a business plan for your own mobile application.
- Attracting investments
As you may have guessed, the main reason mobile app companies create business plans is to attract more and more funding for their app development. This is intended to draw in investors and possibly even startup co-founders; ultimately, it’s up to you, but occasionally you’ll need their backing.
A strong business plan will demonstrate the breadth of your business app ideas and mobile app concepts, as well as assist you in clearly communicating your vision.
- Reducing risk
Creating a business strategy entails mapping out the entire course of your venture, which can offer valuable insights into the numerous unforeseen and likely hazards.
- Helps you keep everything in perspective
When making major decisions, it’s easy to neglect or omit some crucial details that could subsequently create or destroy the basis of your company. It is easier for you to recall those important details, though, if your blueprint has a series of points that serve as a reminder of them. A business strategy for mobile app development is that guide.
The business plan for every mobile application is fundamentally the same, regardless of the category to which it belongs. A business proposal for an app is dynamic, but a business plan is static. This is due to the fact that it is a single-purpose document that is not revised once its intended use is achieved.