The mobile application market has been growing for several years and will continue to do so for the foreseeable future.
Mobile applications are now an integral part of our personal and professional life. The market was valued at $ 106.27 billion in 2018 and is expected to reach $ 407.31 billion by 2026, growing at a CAGR of 18.4% from 2019 to 2026.
With nearly half (48%) of the world’s population owning a smartphone, the mobile application market offers enormous revenue potential for savvy businesses and entrepreneurs.
Mobile applications are frequently used to provide users with services similar to those accessed on a PC. Apps are increasingly the primary tool that users engage with brands and brands use to reach audiences.
However, to tap into this huge mobile revenue potential, there is a plethora of things going into it, including developing a stellar app and creating a solid business plan for mobile apps.
But where to start and what steps do you need to create a mobile app business plan? We’ll get to that, but first let’s see what a mobile app business plan is and why you need it.
What is a mobile application business plan?
A mobile app business plan is basically a roadmap for creating and developing your mobile app business idea.
A business plan has several sections, including an executive summary, company description, products and services, strategic planning, management and organization, and finance.
These details make it a valuable tool that you can use to attract investors and secure the financing you need to bring your app business idea to life.
Investors are not likely to put their money into a business without a clear business plan that outlines how profits will be generated and how they will get returns on their investment.
Basically, a business plan for an app is a comprehensive guide that includes company description, business goals, marketing strategies, etc.
Why do you need a business plan to start an application?
As already mentioned, a business plan is a detailed description of your business idea that you can use to attract investors.
A professional business plan is important because it can help you raise funds to start and / or grow your app startup business. With this, people have raised millions of dollars for app startups
That said, there are a lot of things that go into the process of writing or creating a business plan – in short, do in-depth market research, know your competition, learn who your target audience is, and provide insights. detailed financial projections.
Depending on the complexity of your mobile app idea, creating a business plan can take anywhere from a week to several months.
Tips and key elements to create a mobile application business plan
Now let’s take a look at the top five tips for writing a good business plan for an app that will help you build and launch a great product that generates income, as well as attracting funding from investors:
A summary is the start of the mobile app’s business plan. This part will make the first impression on potential investors, and may appeal to or possibly demotivate them from the start.
The summary includes market research, target audience information, and your unique value proposition. It also includes the funding you need to make your idea a reality.
This is the first section of the plan, which is why you should keep it concise and clear.
The goal: To make the best first impression and to keep investors reading.
2. Market analysis
Before going any further, do a thorough market research to determine the current state of the market you plan to enter. Make sure there are enough leads in the market who have the funds and are willing to spend them on your digital service.
Additionally, perform a competitive analysis to assess your top competitor’s approaches and strategies. Finally, provide a SWOT analysis to be fully prepared for the market and competition and reduce the risk of failure.
A SWOT analysis consists of sstrengths, wweaknesses, oopportunities, and tthreats in the market. Knowing the weaknesses and threats allows you to avoid mistakes, as well as learning your strengths, which will help you take full advantage of them.
The goal: Demonstrate to investors the product / market suitability of your application idea.
3. Marketing strategy
A marketing strategy is to provide the plan for future marketing activities that will make your app visible to potential users.
Start by creating user personas and think about all aspects of their lives such as demographics, occupation, income level, location, marital status, and more.
Next, provide a customer acquisition strategy and calculate the cost of acquiring a user. This section of the mobile app’s business plan also involves expanding your user base through referrals, rewards, loyalty programs, and other approaches.
The goal: To convince investors that your app will reach end users.
Financial information is probably the most important part of the mobile app’s business plan because it contains the data that investors are most interested in.
When writing your app’s business plan, include a five-year financial forecast to allow potential funders to assess the feasibility of their investments.
In addition to that, focus on two other main parts:
- Starter application development costs, including one-time, periodic, fixed and variable costs.
- Monetization strategy that describes ways to generate income from a mobile app. You can choose multiple strategies like in-app purchases, ads, subscriptions, etc.
The goal: To assure investors that the financing of your project will be profitable for them.
5. Validation of ideas
Idea validation is the process of gathering evidence around your ideas by experimenting and proving the feasibility of your application idea.
There are a few strategies you will want to consider in order to validate your idea:
I. Proof of concept
PoC is a way to assess the validity of a whole new idea that didn’t exist before. If you are building a messaging app or food delivery service, you can omit this part.
Prototyping is the most basic approach to validating ideas and requires almost no funding. You can just sketch the app to show what it will look like.
III. Minimum viable product
MVPs take it a step further and allow you to actually experience the app.
MVPs are generally very basic applications that include all of the essential functions and functionality of your software solution.
The goal: To show investors the validity of your idea and allow them to experience the application and also collect valuable early feedback from your target audience.
A professional business plan will help you secure the required financing, educate yourself about your market and target audience, and familiarize you with financial opportunities and constraints. The value of this document should not be underestimated.