How to make a successful business plan for your mobile app startup?

“By failing to prepare, you are preparing to fail” – Benjamin Franklin

Although Mr. Franklin’s statement above is quite obvious, it is also extremely applicable to a wide range of business situations. This includes planning for the development of a successful mobile app.

That said, if you’re currently staring down the barrel at the various challenges associated with bringing your app idea do life, I can promise you that your preparation starts right here on this page. In fact, in this article, we’ll break down all the steps you need to develop, design, and release a mobile app startup using one highly-effective business plan.

There’s simply no denying that the world is becoming more and more digitized every day. Sometimes it seems like we spend more time staring at screens nowadays than not. In fact, a recent study by Technavio predicts that the size of the mobile app market will grow between $164 Billion US by the year 2023. 

Of course, we’re all aware that there are plenty of apps to be found on both the Google Play store and the Apple App Store, and that they focus on everything from entertainment and finance to business and lifestyle. However, we rarely see even 5% of what’s out there, as the vast majority of app startups aren’t getting a lick of exposure.

Their making mistakes.

Now, it’s a good idea to remember that while coming up with a great app idea is the foundation for moving forward, it is much more crucial to work on a business plan for a successful mobile app. It will provide much-needed structure to your idea. And while this might feel overwhelming at first, we can help you break the process down into more manageable tasks, including target user base identification, custom acquisition costs, unique value propositions, and more.

Let’s get started.

Start by validating your app idea

If you didn’t think you had a good idea for an app, you probably wouldn’t be reading this. After all, your new idea is original, solves a specific problem, and you haven’t seen anything quite like it in the marketplace yet. That said, if the market doesn’t agree with your assessment, you’ll want to hold off on investing a small fortune in developing your app.

To ensure your idea has the best possible chance at success, we suggest you follow the following steps:

Step 1: you want to know the size of your potential market

While it’s great that your app solves a problem for a specific set of users, you won’t see significant results unless that group is big enough to support you. This makes the first step of the process estimating how many people you’ll need to reach to be successful. Of course, this number will vary depending on what sort of app your offering, your marketing strategy, and the price of the app. After all, if you charge $50 a month for your product, you won’t need as large of a market as if you only charged $0.99.

To figure out how large your target audience is, type a few key search terms into Google. You’ll specifically want to focus on terms that your prospects would commonly use to find a solution to the problem your app solves. For extra credit, you might also consider scouring social media groups or forums that focus on the issues you’re attempting to resolve with your app.

Step 2: listen to your audience

In order to create an app that people will use regularly, you need to put yourself in the shoes of your prospective customers. This means asking yourself some important questions. For instance:

The more questions you ask (and attempt to answer), the more likely you’ll be to understand your audience’s motivations and needs. This is a big step, of course, in being able to meet those needs. If you’re curious about how to get started, you might want to consider using questionnaires, surveys, and other info-gathering techniques.

Step 3: seek out data from app stores

One of your first stops should be your phone’s app store. When you get there, you’ll want to check out the top apps in your category (both free and paid applications). Though it might take some investment of both time and money, you should download all the related apps you can. Familiarize yourself with them. What do they do best? Where do they fail? After you’ve taken diligent notes, read the reviews to learn why people love (and hate) each one.

Step 4: identify the market gap

Some are large, and some are small, but every marketplace has a gap that needs to be filled. This is the point where you need to identify that gap and figure out exactly what problem your app will solve. If you’re going to be successful at all, you need to know where your product will “fit” into the market.

Step 5: developa unique value proposition (UVP)

If you’re particularly creative, your app might be the first of its kind. However, it’s much more likely that you’ll be entering the marketplace facing at least some competition. Either way, you need to establish the UVP of your application by developing a clear answer to how it will stand out from the others.

Step 6: develop a minimum viable product to test

At this point, you should have a thorough understanding of who your audience is and a rough idea of how large it is. If you’re still confident in your app’s potential, you now need to create a Minimum Variable Product (MVP), which will function as a sort of “prototype” to the final version. 

Your MVP should be fully-functional, and you should take the time to build out all of the most important features. Remember, you want to demonstrate that you can solve your target audience’s primary pain points while avoiding spending too much time and money on development (at least at this juncture). 

Once your MVP is ready, you should introduce it to various segments of your market to see how it performs. This will allow you to gather valuable feedback that you can then use to develop the improved, fully-functional final version of the app.

Detail-oriented target market research

Understanding your target market and finding a fit for your product within that market is key to a successful startup in any industry. Ultimately, you need to be sure that you’re solving real user problems. Even if your product isn’t “revolutionary,” you still have to find a home for it in the marketplace.

Here’s how you do it:

Refine and narrow your targeted audience definition

The very next thing you need to do is more clearly define your target audience. This will help you immensely with the UX and UI elements of your new app and allow you to ascertain the general preferences of your audience. At the same time, this can directly impact the platform on which you choose to launch your app. For example, if you discover that the majority of your audience favors iOS or Android, it would be a good idea to build and launch on that platform first.

Analyze your audience’s likes and dislikes

The more you hone in on what your audience prefers, the more you’ll come to understand what they like and what they dislike. This is crucial for many aspects of the app development process, particularly the design of the user interface. At the same time, this knowledge can help form major aspects of your marketing strategy.

Conceptualize your final concept

Once you have a foundation consisting of your initial idea, market analysis, and target market research, you need to take some time and write down your final concept. This will refine the key features of your app as well as your USP. Before you begin the development of your final product, you’ll want to have this outlined as clearly as possible.

Clearly state what goals the app will achieve

At this stage, it is crucial that you establish clear goals for your app. These will range from what problem you’re trying to solve to where you’d like to see your startup five years down the road. By establishing these goals up front, you can go into the development process with a detailed vision.

Finalize the app experience

Using your market study and final concept as a basis, you can now move on to designing and prototyping your app experience. This is where your final product will start to take shape. The goal here is to visualize exactly what you’re trying to offer your potential customers so that you can then make it a reality.

Using the app validation idea and the data you’ve compiled from your target market research, you should now have an impression of what to expect in terms of both the marketplace and your competition.

Finally, let’s take a look at your marketing plan.

A template for mobile app startup plan

Now that you have everything you need down on paper, we can show you how to develop a bullet-proof business plan to maximize the success of your mobile app startup. However, first, you’ll need to do the following:

Looking at this information, do you still feel confident that your product is viable? Do you feel it has the potential to offer new experiences to the user and offer measurable benefits to the founders? These are the two primary questions your business plan should answer. In the following section, we’ll outline some additional components to aid you in developing your plan.

Section 1: the executive summary

This will serve as the introduction to your business plan and will be the first thing that any potential investor sees. It would be best if you acquainted them with your idea in a clear, effective manner while also answering the following questions:

What problem do you want to solve?

The app marketplace is full of all sorts of solutions to problems. However, there will always be new obstacles, challenges, and complications faced by consumers. In your summary, you need to identify these problems and highlight the ones you (and your product) can solve. Be sure to outline your target audience’s current needs, and explain why the existing solutions don’t satisfy them.

What is your solution?

Above all, you want to make sure you explain why your product is capable of solving the problems you describe. Be sure to introduce the overall idea, but don’t dive into the details just yet. You’re not trying to introduce the functionality of your app to investors. You’re simply explaining how it can make potential users happy.

How will your app alter the market?

Again, in almost all cases, similar solutions to your TA’s problems will already exist. However, you can provide proof that your app is better than other apps at doing so. This is where you want to use statistics, facts, and market forecasting to impact the reader. Don’t use tired cliches; make your answer powerful and provocative.

What goal or goals are you pursuing?

Of course, the main goal of any business is to generate a financial return. In this section, however, you want to explain what all of your company’s goals are so that you can provide readers with an accurate vision of your company’s future. Talk about how many users you expect to download your product, explore its profit potential, and be sure to use metrics to enhance your answer.

Section 2: describe your company in business terms

In this section, your goal is to generate an attractive overview of your company in order to increase interest. This will help you get the attention of potential partners, providing you present them with the following:

Basic organizational info

Whether your company is an LLC or some other type of entity, you’ll want to ensure potential investors have this information. After all, the way your company is structured will define the way processes are organized in the future. Location, for instance, is very important. If you have a remote team, be sure to mention that while emphasizing the reasons you’ve selected that option.

A little company history

Stories resonate with people, which is why it’s important to spend some time outlining your company’s history. You might talk about how you came up with your idea, how you decided on founding your own business, and what you had when you started out. Keep it short, but also catchy enough to get the attention of readers.

Introduce your team

Any good app startup business plan should include details about your team, as this info will help you make a more personal connection with your reader. You might include a few words about the specialists you’ve hired, tell potential investors about your managers or programmers, etc. Be specific, and include names, positions, background, and even hobbies when possible. Make your readers feel like they know the people you’ve chosen to surround yourself with. You might also consider adding information about your advisory team, as these are the men and women who help you with your decision making.

Section 3: outline your marketing strategy

Any good mobile app business plan should describe how the app will ultimately get to potential users’ smartphones. Below, you’ll find a step-by-step guide on constructing a successful marketing strategy:

Identify the channels through which you’ll acquire customers

Currently, social media marketing is considered one of the most effective ways to promote a product. That said, will this method work for your specific app? Refer back to your research and attempt to outline how many potential users you can reach via Facebook, Instagram, and Twitter. Provide readers with information on what channel you feel will be most effective. You should also create a mockup of your app’s landing page and provide partners with info on how you plan to direct customers there.

Decide on metrics

In the initial stages, your success will be measured by how many downloads and installations your application has, not by the amount of revenue earned. Decide on what metrics you’ll use to evaluate your project as you move forward.

Consider setting up referral programs

Referral programs have the potential to fuel growth in many different ways. For this reason, you might want to decide now which companies you plan to collaborate with and tell your readers how such a partnership can pay off down the line. Of course, don’t forget to optimize your website and mobile application to improve SEO

Section 4: choose a monetization strategy

As we near the end of your app development business plan, it’s time to start talking about finances. Of course, when it comes to mobile applications, you need to pay special attention to the monetization strategy in order to get access to the billions floating around the marketplace. So, how do you plan to turn your efforts into profits?

Advertising

One of the most common ways for apps to generate revenue is by including advertising for other products. Not only is this fast, but easy as well. That said, you’ll need to have an impressive number of active users if you want tobenefit from this strategy.

Charge an installation fee

Unfortunately, there are so many free apps to be found that many users have come to ignore the paid ones. If you plan on charging for your product, you’ll need to demonstrate some unique and beneficial features.

Add an option for paid accounts

Offering a free trial is always an attractive option. Once the trial ends, you could then offer an account upgrade (providing your app demonstrates good performance and reliable functionality).

Whatever your strategy is, be sure to choose it before you get started on your business plan. After all, potential investors and partners are highly unlikely to support you unless your monetization strategy is clear and well-defined. You’ll also want to prepare yourself to answer questions about how you plan to profit from your app.

Section 5: startup costs & funding

Did you know that one of the main reasons app startups fail is due to financial issues?

Image Source:Fractl

In fact, some 24% of companies simply run out of money while another 18% encounter various other types of cost problems. This is why it’s so important (especially at this point) to consider various costs and funding and how they relate to your business.

When you set up your startup financial model, keep in mind that it should reflect your forecast for the next 3-5 years. At the same time, you’ll want to make sure you include the following:

Talk about funding

It would be best if you had a comprehensive estimate of how much money you need to bring your app to market. However, you’ll also want to try to anticipate any extraneous cost issues you might face. After all, it’s always a good idea to have extra cash on hand to overcome challenges.

Specify payment frequency

Some costs should only be paid one time, while others (like salaries and maintenance expenses) will repeat at regular intervals. The more detailed your financial plan is, the better it will serve the goals of your business plan.

In conclusion

We said it once, but it definitely bears repeating:  simply having a good idea is not enough to make your app successful. Only a well-crafted, comprehensive business plan can put you on the fast track to effective mobile app development.

To implement such a plan properly, it’s crucial that you start when your app is still being conceptualized and planned. After all, the development of your app is sure to evolve and change over time. A business plan can be the structure that the project needs to stay grounded and on the right track.