App Business Plan

Business Plan Articles

Mobile applications are rapidly entering the market to create the next generation of tech-millionaires. Pro Business Plans has worked with many application entrepreneurs to create both mobile and software apps that have gone on to outperform in the market. A good business plan for an app is not standardized and applicable to any company, it is important to communicate the most differentiating factors and competitive advantages that your application delivers compared to others available in the market. Most of our business plans are provided to individual investors and private equity groups to financing development and application commercialization. This article covers information about what a business plan for an app should include and how Pro Business Plans works with your company to communicate it.

business app

App Business Plan

The mobile application market is especially concentrated, most mobile applications barely cover third-party development costs. This leaves investors considerably skeptical of any mobile applications that make high promises that are not developed by established companies. A strong business plan will prove to investors that your application is not like the many others that fail to achieve any traction.

This means that your application has a business model tailored to profitability with financial forecasts that demonstrate a strong payback period and a management team capable of managing a strong product launch. Pro Business Plans has worked with many entrepreneurs to understanding the unique advantages of the application, which we have outlined below.

Business Model

Many applications have business models that are fundamentally flawed. By this, we mean that they do not have a revenue strategy as they enter the market. Some freemium business models have had some success, but investors realize that it is a profit generation strategy that is a long uphill battle to acquire revenue from customers. In contrast, the most profitable applications have been those that offer in-app purchases either by subscription or unlocking special widgets. These are not freemium, but essentially operate as a free trail or enable limited interaction that renders them useless without committing payment.

The feasibility of an application takes several factors into consideration, depending on the stage that your application is in. If it is in the conceptual phase and development has not yet started, we provide an unbiased third-party analysis of the technical feasibility of your application. Some application ideas are simply not technologically feasible with the current IT resources that are commercially accessible. Other factors that may render the application infeasible are financial, such as a restricted market base or poorly performing applications of a comparable nature. Pro Business Plans can work with your company to advert these factors to build a strong investment case and fundamentally, a more successful application.

Marketing Plan

All applications should take careful note to balance the customer acquisition cost with the customer lifetime value. By this, we simply mean that you spend less money acquiring customers than you generate from them. Before our business plan consultants worked in private equity and nearly every business plan for mobile app that they came across seemed to have an extravagant marketing strategy that would render a massive customer acquisition cost. Some of the most successful marketing techniques that we have seen include the use of mobile app analytics, app store search query optimization, and cross-app marketing using a download as a conversion. Aggressively using PPC/CPM the same way as a cloud based software would likely result in a higher customer acquisition cost and a low conversion if you are not properly targeting mobile consumers.

Financial Projections

There are many brilliant developers who carefully craft brilliant applications that do not make financial sense. The market is simply too niche to cover development expenses or the customer lifetime value is not higher than the customer acquisition cost. Moreover, the expected lifetime of the application may not cover the development expenses or the ideal investor IRR, a financial metric that investors use to determine the profitability of your investment comparative to other investment opportunities.

What is Included in Our Custom App Business Plan?

  • Marketing Plan
  • SWOT Analysis
  • Competitive Analysis
  • Profitability Analysis
  • Personnel Plan
  • Organizational Chart
  • Company Valuation
  • Executive Summary
  • Company Description
  • Keys to Success
  • Three Year Objectives
  • Product or Service Description
  • Market Research
  • Fundraising Support
  • 12 Month & 3 Year Profit & Loss
  • 3 Year Balance Sheet
  • 12 Month & 3 Year Sales Forecast
  • 12 Month & 3 Year Cash Flows
  • Break-Even Analysis
  • Financial Ratio Analysis
  • Management Team

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