The business industry in the technology industry is booming. The demand and use of smartphones are rising now more than ever. The number of smartphone users is increasing rapidly. Each year the numbers are growing immensely. So, the demand for mobile applications is growing alongside. Businesses or service providers are opting for mobile apps to adapt to the market. Now mobile application development has turned into a necessity.
If your business is a startup, you must design or make your service compatible with mobile applications. It is a must to reach out to the millennials. If you are willing to start a mobile application development business, you must create a business plan. This business plan shall cover everything, including app development, planning, designing, budget, marketing, sales, and post-sales support.
Why You Must Have a Business Plan
Launching your app on the app stores will not be enough. It doesn't matter whether you are in a B2B or B2C industry. In this era of digital transformation, there will always be massive competition in the mobile app market. Therefore, you will need to plan wisely for your marketing strategy. You will also need to spend on marketing so that people come across your application and know what service they will get. You will have to make a plan that users download the app for their interest.
A successful business plan will make your audience search the app by themselves. A well-structured plan will lay out the total cost of the application development, point out the feature cost, which may include a minimum viable product. It will help you assess your business. You will be aware of the risks you might face. Most importantly, you will showcase your entire plan to investors and convince them to invest in your idea.
What Your Business Plan Will Include
A standard business plan will be informative and insightful. It will cover all possible aspects. It will help the owner, stakeholders, or investors to weigh the risks, benefits, strengths, and weaknesses of the business. A successful business plan will help to analyze any possible scenario descriptively.
Your Unique Mobile App Solution
If you are thinking of developing and launching a mobile application, you should address a service that is lacking in the market. Find out what problem or service society faces and has no apparent solution. There might be existing solutions to that specific problem or service.
Identify the service or solution which the users desire. Come up with a solution which no one is offering. Please point out the gap between supply and demand and work on it. Your business plan should lay out:
- Who is your target audience?
- What do they want?
- How is the problem impacting their lives?
- How can you find a solution?
- Will that solution be effective and substantial?
Find the Potential Solutions
Once you have your app idea, now it's time to work on it. Your purpose of the business plan might be to attract investors. You should explain thoroughly how your app can provide a solution to the problem that users are facing. How big the problem is, if required, what new you are providing to address the problem. To simplify, it will include:
— How the app will allow the users to get rid of the problem they have.
— How your app will provide something extra than the other existing solutions.
Explain the USP-Unique Selling Point
You must have a USP to develop sustainably in the market. The popular app stores already have more than 2million apps, and the number is constantly increasing.
So, your business plan should incorporate how you are adding something new to the table. If you want to get investors to invest in your app idea, you need to be different from others. Even in some cases, where the demand is enormous, being the number two or three might be beneficial. But you must add something new to the existing solution just to survive in the market. USP or Unique Selling Point differentiates your product from the competitors.
Your USP will not always stay the same. It might change over time. Think this way that a software update can turn your unique selling point. Therefore, it is not constant. To determine your USP, you need to research the market rigorously.
As I said earlier, USP will change from time to time. It may change with new features or updates. However, it is best to have a solid USP to attract investors. You will need to point out why your product is different and why you will dominate the market.
Strategic Plans and Objectives
Setting strategic goals and plans is essential. While starting your business, you should make a strategic plan and set a timeline accordingly. It is crucial to determine the growth of your business. Investors tend to look into the strategy and objectives before investing. It helps them to assess the Return of Investment or ROI. Your long-term goals, mission, and visions would reflect each step of your business. Many businesses do not earn in their first two or three years. It is the long-term goal that matters. A standard business plan should state:
- Target revenue
- End goal
- The timeline to achieve the goal
Market Research
It would be wise to conduct thorough market research before developing the application. It is better to build the app as per the research. You would need to identify the target group of users, market size, competitors, etc. Here I am are going deep into market research:
Size of the Market
You would need to realize the market size before jumping into the market. Market size can be categorized into three-part based on the key parameters:
Total Addressable Market (TAM) – the revenue opportunity available for a product or service.
Serviceable Available Market (SAM) – the segment of the TAM which can be targeted by your products and services.
Serviceable Obtainable Market (SOM) – is the portion of SAM that you can attain.
Projections
Your business plan should also have an analysis of the relative market. You can opt for research firms to analyze the target market's information. Such information will include market size, competitor's growth, growth rate, and potential growth in the industry. These projections need to be relevant. If you are operating locally, find stats of your local competitors only.
Competitor Analysis
One of the critical parts of market research is competitor analysis. You will always learn from your competitors. Study your competitors in every aspect possible. Monitor how they operate, their audience, their investments, pricing, USP, marketing strategies, etc. Simply utilize your competitors in every way you can rather than hating them.
SWOT Analysis
SWOT means Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis will show your stand in the market. You will get to know your strengths and weaknesses. You will be able to maximize your strength and work on your weaknesses. This will give your investors confidence knowing that you can identify your weaknesses and fix them.
Note that, in modern times, people try to replace the term SWOT with SLOT since "weakness" is a negative word. The word "limitation" is safer to go with.
Post Launch Activities
Your business plan should precisely incorporate the post-launch business plan in detail. After launching comes the significant part. You have worked hard; now you have to work harder to reap the reward. Here are some essential factors that you should keep planned:
Marketing strategy
Marketing strategy is one of the core parts of your business plan. Set your marketing strategy considering the product, target group, market, trends, budget, etc. It entirely depends upon each product, market, and timeline. Share your plans with your team and investors. Include the following in the plan:
Customer Acquisition
When launching a new product, marketing might be the most expensive phase. You might have to do OTL, BTL, TTL marketing. These popular marketing strategies gradually mean Over The Line, Below The Line, and Through The Line.
You will need to find out:
- Where and how to gain new users.
- Where to look for users (different channels)
- Cost per acquisition of customers
- CPA in each channel
You will have to be quantitative and detailed about the cost. So that your investors feel comfortable investing.
Reward program
To grow a quality audience base referral rewards are a proven method. It will engage your audience and also bring some new users. You can use the network effects with a referral program and make it a built-in feature in the app. Track your progress and find out where you can improve.
Total Finance Required
Investors always want to know when and how much money you will need. They want exact numbers. Break down your business plan and share:
- Total funding you will need.
- The cost of application development
- The cost required for the app and business to run.
- How to assess and monetize the entire operation.
Total Expense to Run the Company
This might be the most important part. Estimate the total cost to do your business in operation. Leave no detail. Make a detailed plan covering all costs to keep your business up and running. Mention when and how you will need money. Make sure you have a secured cash flow.
Monetization
To ensure ROI (Return OF Investment), you shall establish your app as a source of revenue. Make a revenue model for your product. Here are some ways to monetize your app.
In-app Advertisements – Your app will be free for users. You will earn from the advertisement.
Paid App – You will have a price tag on your app. People will pay an amount of money to download your app from popular app stores.
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In-App Purchases – If your app is consumer-oriented, then it might be a handy option. Users will have to pay for certain features of the app. Prompts and referral discounts can encourage users to make such purchases.
Subscription – You can also make the app subscription-based (SaaS). To simplify, you will earn on a monthly or yearly basis from subscription fees from the users. Like Netflix does.
Development Costs
The application development cost is a significant part of the business plan. As software development has different phases, you will need to have a detailed plan for each stage. You might hire freelance developers or build the app with a development company. But make sure you have incorporated the cost of each phase and each feature. It might also cost extra to make the app compatible with different platforms. So the main task is to keep a detailed record and estimate each cost made during the development phase.
Break down the cost of each phase and features. So that the investors will know how valuable or expensive a part is. It will also help them make their decisions.
Major Questions
Prepare to answer the following questions for your investors:
- The amount of money you would need?
- When will you start making profits?
- The equity you will give away?
- When will you need another investment?
Wrap Up
A business doesn't become successful in one day. It takes hard work to make a business grow. The tech industry is challenging but always rewarding good ideas. A successful business plan is the first step to a successful business. I will be here with my trivial knowledge to assist you. Do you have a big idea? Give it a shot!
If you think you have anything to add, let me know in the comments.
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