Why You Need a Business Plan
If you’re starting or trying to grow your mobile app business, you need a business plan. Your plan is essential if you want to raise money for your company. But also, the right plan helps you develop the optimum strategy to grow your business.
Your Mobile App Business Plan
So, you’re probably wondering how to develop a business plan for your mobile app business. Importantly, you need to include 10 sections in your plan as follows.
1. Executive Summary
2. Company Overview
3. Industry Analysis
4. Customer Analysis
5. Competitive Analysis
6. Marketing Plan
7. Operations Plan
8. Management Team
9. Financial Plan
Each of these sections are described below.
Your executive summary is the introduction to your plan. The primary here is to captivate the reader and explain to them the type of mobile app you are creating/have created, its current state, whether its a startup or an app you are trying to grow, or if you already have other successful apps.
After explaining this, summarize each of the other sections of your plan. Here is where you want to address the function of your app, its competitors, and your target customers. Illustrate just what your marketing and financial plans are and identify the key members of your team.
To increase interest in your app business, here you will offer an attractive overview of the mobile app you are offering. Explain just what your mobile app does, whether that's travel, education, lifestyle, you name it. Also provide background on your business in the company analysis section. Write about your company's history, any milestones you have achieved (e.g., app downloads to date), and your legal structure.
Your industry analysis provides a summary on the mobile app business. By understanding the history and market fundamentals of mobile apps, you can impact its future. Market research also proves to readers that you are an expert in the industry. By educating yourself and presenting research in your plan, you can do just that.
In your industry analysis, you should address the following:
- How big is the market?
- Where is the market currently: increasing or decreasing?
- Who are some of the key competitors?
- What is influencing the industry?
The customer analysis section of your business plan explains in detail the audience you are targeting and expect to serve. It is important to note that different customer segments will want different things. For example college students will want different product features and functionality than baby boomers.
In order for your app to be successful, you must educate yourself on the demographic you are targeting. Develop psychographic profiles that explain the needs and wants of your target customers. If you can better understand these needs, you will be able to better attract and retain customers.
In your competitive analysis, you will identify both the indirect and direct competitors your business will face.
Direct competitors are other mobile apps in your genre. For example, if you have a dating app, direct competitors will be other dating apps.
Indirect competitors are other apps or options (e.g., a dating website or meeting a date through an offline service) that customers have access to that can achieve similar results to your app.
For each direct competitor, identify both their strengths and weaknesses. Being able to identify these components will help you successfully create the best possible version of your mobile app with positive differentiation and ideally competitive advantage. The key things you should find out about these apps are:
- What features do they offer?
- What is their pricing?
- Who are their customers?
- What are they good at?
- What are their weaknesses?
After identifying these, now it's time for you to document your areas of competitive advantage.
- Will you offer more or better features?
- Will you ensure better results for your users?
- Will you offer better pricing?
- Will your customer service be more efficient?
The overall goal here is to figure out just how your app will be successful in a competitive market, and what will stand out in your app compared to others.
Your marketing plan should include the four P’s: Product, Price, Place and Promotion. For a mobile app business plan, focus on the following:
- Product: look back on your Company analysis and reiterate the type of mobile app you documented. Detail the specific features of your app.
- Price: identify how you will price your app and if there will be different pricing levels (e.g., free, premium) and what exactly those levels will be
- Place: This is your distribution method. Name where customers can download your app (e.g., The Apple Store, your website, etc.)
- Promotions: The final and perhaps most critical part of your marketing plan is the promotions section. This is where you will identify how you will attract customers to your app, whether that's through social media advertising, pay per click advertising, magazine advertising, public relations, etc.
Your operations plan describes how you will meet your goals that you identified in the earlier sections of your business plan. There are two distinct sections to include in your operations plan as follows:
Everyday short-term processes include all operations involved in orchestrating your mobile app such as providing customer service, writing code, fixing bugs, etc.
Long-term goals are milestones you hope to achieve; when you hope to reach X number of downloads, $Y in sales, etc.
Building a strong management team is essential to success in the mobile app business. Emphasize your key players’ backgrounds and describe how their skills are essential to your business. Highlight your own experience, and any other experience you think your business will need in order to succeed.
Your financial plan should document your 5-year financial projections broken down either monthly or quarterly for the first year, and then annually. Here you should include your income statement, balance sheet and cash flow statements.
Income statements, also known as Profit and Loss statements, shows your revenues and subtracts your costs to demonstrate whether or not you made a profit.
Balance sheets present your assets and liabilities.
Cash Flow statements will help you determine how much money you need to start or grow your business, and make sure you don’t run out of money.
Include your financial projections in the appendix of your business plan along with any other supporting documents that you believe compliment your plan, such as employee contracts or partnership agreements.
Creating a business plan for your mobile app is a necessary piece in the success of your app. By following the guide above, you will become better educated on the app business, improve your strategy, and gain a roadmap to raise funding (if needed) and grow your business.