Anthony St. Clair
Anthony St. Clair is a business copywriter, author of the Rucksack Universe travel fantasy series, and a craft beer writer specializing in Oregon. Learn more at anthonystclair.com.
11 min. read
Updated April 25, 2023
When Apple released the first iPhone in 2008, it also launched its App Store—with about 500 apps. Nowadays, the number of apps on the Apple App Store and the Google Play Store totals about 5 million. If apps were people, they’d outnumber the population of Los Angeles.
Sure, the “gold rush” days of app development are long behind us, but building apps remains a solid way to bring useful or entertaining services to market. An app can also be part of a narrow or broader business strategy.
But with so much competition, building a profitable, successful app takes more than just an idea and a team of mobile app developers. You need a business plan to help guide your vision and implementation. This article will cover the steps to create your mobile app business plan, along with some tips to run it successfully.
Need more guidance? Download our free mobile app development business plan for a full business plan outline that you can use to inspire your own plan.
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A business plan can be as short or extensive as you need it to be, and not a page more. In fact, you could launch a successful business based on even a one-page plan for your app development firm.
Writing a business plan for your mobile app business comes down to thinking through where you are with your app idea, what you want to accomplish, and how you think you will get there. A good business plan gives you both a starting point and a road map, but you can always review it and update it as you go.
At its heart, that’s all your app business plan needs to do.
Here are some of the key things your mobile app development business plan should include.
Competition and opportunity co-exist throughout every app sector. If you’re still trying to decide where you might want to target your app development, strong contenders and trending app verticals include:
The sector you’re developing your app for influences the type of app you’ll want to build. For example, will you code for Apple iOS, Google Android, or both? Will you focus on a web or hybrid app? Is the app an extension of a website or other business channel?
You’ll need to have this information defined up front in order to conduct proper research and easily write your business plan.
It’s one thing to have a good idea for an app. But the real question is, does the idea have a market that will be hungry to buy in?
As you develop your business plan, understanding your potential customer base is key.
For starters, evaluate similar apps and competitors in the vertical you are developing for—especially if there is already an app doing something that you want your app to do. As you conduct research and put together a market and competitive analysis, be sure to think through the following questions:
If you don’t understand the market for your app, it will be difficult to get them to find, install, use, and tell the world about your app.
Researching the market and your competitors can also clue you into expected app features, pricing and revenue models, gaps in services, and pain points that customers feel aren’t being met.
Understanding these factors can also help your business plan address a potential threat to your app’s viability: abandonment. User retention can be challenging throughout the app market, with 25% of customers using an app one time and then ditching it. So, be sure that you take into account how to attract new customers as well as how you’ll keep them around.
Once you’ve proven the market demand for your app’s concept, you should start figuring out how to promote your app and position it in the marketplace. Your business plan doesn’t have to include a detailed marketing plan. But it can be the perfect place to set up a few essentials that can guide your app’s marketing throughout its development and release cycles.
At a minimum your plan should include foundational messaging for pitching, branding, mission, and your overall sales and marketing strategy for your app, such as:
How concisely can you get across what your app does, why it’s needed, and what will make people love it? Can you talk up those key points with anyone from potential investors to your ideal customer, developers, and engineers to your mom and your best friend?
Will early testers be part of your outreach? Will you work with social media influencers, traditional media, or celebrity endorsers? How will you articulate the problems your app solves or the joy it provides?
For example, what is the company name? The app name? How will you engage your market on the social media platforms they like to spend time on? What original supporting content will attract the interest of your key audience?
In your business plan, it’s essential to understand your startup from the point of view of a founder and key player. But the marketing and promotional components of your business plan help you see your app from the point of view of an outsider, such as a customer or investor. The better you understand these other points of view, the better you can develop your messaging, build your app, and make it a success.
Free Mobile App Business Plan Template
Use this proven business plan example to successfully launch a competitive mobile app development business.
Figuring out the potential startup costs for your app is not a one-size-fits-all equation. Generally, these are some of the factors to consider as part of your financial plan.
Expect different development costs when developing for iOS, Android, or both. Your process will include defining a function, outlining what you need for your MVP, wire-framing, coding, testing, designing, and more.
If you’re planning to build up a full-on firm with employees, benefits, and offices, you will be looking at a different cost structure than if you want to outsource to a contracted development company or work with a freelance team that’s not employed by your app startup. That team may need pros in charge of mobile and backend development, design, QA, customer support, design, marketing, managers, and more.
How long it’ll take to develop and release your app depends in part on the resources you have access to.
Successful apps monitor and improve. Did the app crash? Is it scaling sufficiently to handle increases in use and load? What usage metrics are you monitoring and analyzing? How will you need to update the app to deal with OS updates?
By understanding these and other potential costs, you can develop a budget in your business plan. For more in-depth financial considerations, you should develop forecasts to gauge costs, future cash flow, and how your app company might grow and change over time by hitting release and growth milestones.
The release of your app is a milestone that’s farther down the road. In the meantime, you’ll be developing milestones that reflect major accomplishments in the development process. Your business plan can reflect some of those milestones, such as:
Remember, app development takes time. Focus your initial milestones on pre-release goals. From there, you can set and work toward post-release milestones that can pave the way to future growth, releases, and profits.
As you develop your mobile app’s business plan, here are a few other tips and considerations to keep in mind.
Creating apps tailored to each OS—Apple and Android—can cost the most to develop, but also can maximize your app’s performance. The better the performance, the most adoption and use you could see in your target audience.
At the same time, other apps work solely on the web, and others are developed as hybrids. Hybrid apps can help you manage team and development costs, but they typically can’t take full advantage of each OS.
As a rule of thumb, typically the more complicated or intense the app’s function, the better it tends to be to develop a native app. Lightweight functions may work fine in a web or hybrid environment.
Privacy and security are at the forefront of customers’ minds as well as industry discussions around app business models. If you are developing for regulated industries—such as health care or financial services—there may also be legal privacy and security requirement to adhere to.
If your target market is predominantly on one OS, that can guide your development decisions. Developing for both platforms requires more resources, but can give you the benefit of maximizing your ability to develop the app for each OS, and reach the most customers. Another option to consider is launching on one platform and adding another over time, depending on milestones in your business plan.
A growing consideration in today’s app development firms is whether the apps can only function online, or if it can function offline too. Some level of offline function—and messaging that the app is offline—can make for better customer satisfaction, since users will have access to at least some features regardless of their internet connection.
For example, Google Maps can download route information so a user still has the mapping and some functions, even if they enter a remote location or go through an area where they don’t have a cellular or wifi signal.
Walking users through what they can and can’t do offline, and how functions can be completed or data can sync once online again—can also go a long way to winning trust and loyalty from your app’s users. You’ll also want to determine if the offline function is something you develop as part of the launch, or if you roll it out in a later version.
Apps can drive revenue in many ways. A common strategy is a freemium model: Offer a free baseline app, but other features can be unlocked with purchase or subscription.
Subscription models (usually with a tie-based free trial period) have also become increasingly popular in companies, and they are finding broad acceptance in the market. An app can also drive revenue by being a mobile commerce tool, helping customers complete a transaction from the convenience of their phone instead of having to go to a browser, non-mobile device, or other fulfillment channels.
Some apps are only available for purchase, often as a way to showcase an app’s superior or unique place in the market. Once purchased, though, other revenue models can come into play. The popular game Minecraft is a prime example: Customers purchase the app, but the Minecraft Marketplace offers in-app purchases to further customize the game.
If your app doesn’t work at launch, it may never recover from that stumble.
As the app reaches development milestones, ongoing testing can help you find and resolve problems before you have to deal with them in the deployed product. Conducting extensive testing across various devices, users, and OS versions can help you catch problems before they harm your new app—and your startup’s viability and profitability.
Our free mobile app development business plan can give you the template you need to start setting up your business plan—and your business. It’s just one of hundreds of free sample plans that have been time-tested by our team and by thousands of entrepreneurs all over the world.
The question is simple: What mobile app development business will you create? Whatever it is, your business plan can help you get there. Download your free plan now and get started.