How to write the perfect mobile app business plan?

by Klaus on September 29, 2021

in Articles

Introduction

A mobile app business plan is a document that contains information about an up-and-coming mobile app development company.

The main task of this plan is to provide investors with all necessary data to evaluate your idea.

According to statistics, 4.80 billion people worldwide used the internet in July 2021 – that’s almost 61 percent of the world’s total population.

Revenues from mobile apps worldwide were over 365 billion dollars in 2018. Paid downloads and in-app advertising are expected to bring in more than 935 billion dollars in 2023. That is why numerous investors seek great app ideas.

Although creating such a document may seem to be a hard and time-consuming task, many online services simplify everything for you.

For example, we suggest obtaining a free mobile app business plan template from Google Docs. On the other hand, if you prefer to write your own plan – it can be easily done using ready templates available on the Internet.

However, there is one element that should be included in every mobile app business plan – the monetization strategy of your product.

To find out how much money you can make from an application idea, try out different mobile app business model strategies. After choosing one of them, you can provide your investors with all necessary data and business models.

Create a brief description of what your application is going to offer. Make sure that you include all the main features of your product, plus other helpful information that can make your idea more attractive.

Why Make A Mobile App Business Plan?

Attracting investments

One of the main reasons for writing a business plan is attracting investments. App development can be expensive and demand significant time and effort on your part.

If you want to become an entrepreneur, you need to know that money and time are two significant things that you cannot afford to waste.

Establish important milestones

Next, outline important milestones in your project. For example, when you began researching or prototyping your idea.

You can also add some results of this research here, but make sure that they are not too detailed – use bullet points instead.

Act as a blueprint for success

The final step of writing a business plan is to add an executive summary.

This part should provide key information about your product and its performance. Make sure that investors get a basic understanding of what you created by reading this part alone.

In the early stages of development, a mobile app business plan can be used as a roadmap for your project. In fact, it is the only document that provides all key information about your future app and its marketing campaign.

Mobile App Business Plan: What To Include?

App overview

To begin with, make a brief description of your mobile application. Include information about its main features and segments, as well as how it will be marketed.

Unique selling proposition

Note here your application’s main features that make it stand out from the rest. You can also include information about the target audience to which you are going to appeal. If possible, provide some statistics about mobile app industry growth.

Market research & analysis

Next, include data about your market research and its results. For example, you can write something like this: “We analyzed the top mobile applications in our product’s niche to understand how they work.

As a result, we learned that most of them use in-app purchases to make money”.

Estimated Marketing Cost

Marketing cost is the amount of money that you invest in promoting your product. A typical mobile app business plan includes information about the number of promotional campaigns along with their estimated costs and dates when they will be held.

Projected Revenue

Fix the estimated revenue that you expect to earn from your app. You can also write information about expenses and profitability here, but it is optional.

Launch strategy

Don’t forget to include information about the target audience of your application and some tips on how you will promote it. Namely, it should be known to your potential investors what you will do to attract people’s attention.

Break-even analysis

Also, don’t forget to include information about the break-even point. For example: “Our mobile app is expected to generate revenue after reaching 500 active users per day”.

Cash Flow Projection

Using a cash flow projection, you can show investors how much money you are going to spend for different purposes. For example, some items can be salaries for employees or marketing campaigns.

Financial Forecasts

Finally, don’t forget about financial forecasts that include revenue and expenses projections for the next three years.

You need to know what your product will bring to your company from a financial point of view. Knowing this information, you can show it to potential investors and prove that you are ready for the long run.

Steps To Write An Effective Mobile App Business Plan

Executive Summary

To begin with, make a brief description of your mobile application. Include information about its main features and segments, as well as how it will be marketed.

Provide information about the problem that your application solves. For example: “The main aim of our product is to help people save money on shopping”.

Include information about your app’s unique selling proposition. For example: “Our application will provide the customers with different tips on how to save money”.

Write about how your product will affect the market. For instance: “According to our research, by implementing a new shopping assistant into their apps, businesses can save up to 10% on customer loyalty”.

Start your business plan with your app’s main objective. For example: “We aim to create a mobile application that will become the leading shopping assistant in our market in the next 3 years”.

A business description of the company and the app

In this section, write about your company and its business model.

Keep in mind that writing a mobile app business plan is not enough – you need to know what steps should be taken during the whole product life cycle.

Include information about your company and its main features. You can also add here some general information about the team that developed the product. Make sure to mention the previous experience of all employees in such areas as mobile technologies, business analysis, etc.

Write about the company’s vision. This part will help investors understand your motive to develop your product. Also, don’t forget to include information about your main competitors in this section of the mobile app business plan.

You can also include information about your advisory panel in this section. It is an excellent way of proving that you are striving for success and ready to take advice from professionals with experience in the mobile business.

Market Analysis

As a next step, write about the market analysis. Here you can provide information about your competitors and define your audience.

Market size and trends

Remember to include information about the market size and its development over time. Keep in mind that only a detailed market analysis will show your product’s prospects for success.

If you want to provide information about your mobile app business plan examples, then you must include data on the total available market (TAM). It will help potential investors understand the product’s prospects.

Next, include information about the serviceable available market (SAM). It is your target audience. For example, if you are planning to promote an application for parents with kids under 14, then this should be your SAM.

Now, you need to define your serviceable obtainable market (SOM). Here you can include information about the most popular social networks where users of your target audience are located.

Market volatility

In this section of the mobile app business plan, you need to specify the market volatility. What factors can have a negative or positive effect on your product?

Customer persona

This part can provide information about your customer persona. It is crucial to understand the psychology of your audience and any features that attract them to your product or push them away from it.

Competitors analysis

Writing an analysis of your competitors is an excellent way to show potential investors all advantages and disadvantages of your product. Provide information about their strengths and weaknesses. It will also help you understand why people choose certain products over others.

SWOT Self assessment

This part is a must-have for mobile app business plan examples. In this section, you need to assess your company’s strengths and weaknesses.

Be honest and provide information about your product’s main advantages and disadvantages.

It will help you understand your product’s key features and decide on the main focus points of your future work.

Market strategy

To provide information about your market strategy, you need to know the main target audience for your product.

Describe your customer acquisition strategy. Decide on the primary channel(s) for attracting new customers and provide information about features that will make it more efficient.

Include information about the key indicators of your business’s success. It is also necessary to specify how you will measure and analyze such factors as customer satisfaction rate, customer retention rate, number of returning customers, and lifetime value (LTV).

Define the main principles of your business model. You should also provide information about generating revenue and margins.

To convince potential investors, you need to provide them with concise but informative information about your product.

Use mobile app business plan examples to create an eye-catching landing page that would explain the main features of your product and show off its advantages.

Operational plan

In this section, you need to describe your company’s operational plan. In particular, provide information about the main stages of product development and your marketing strategy.

Decide which positions your company will need to hire and, in case of vacancies, specify the process for recruiting new employees.

When writing a mobile app business plan with sections about hiring employees, it is helpful to provide sample resumes for each position. It will help potential investors understand the level of expertise you can bring to your company.

Include information about your customer relationship management (CRM) system. Provide information about tools that will help you understand the degree of customer satisfaction and evaluate the lifetime value of each user.

Provide information about your business’s finances. Provide information about the total cost of developing your app and other expenses related to product promotion (marketing costs, etc.).

It is crucial to specify your revenue model. For example, will your company’s revenue come from ads? Or maybe from in-app purchases or subscriptions?

Financial strategy

In this section, you need to specify your financial strategy and provide information about the way you intend to spend money.

You must focus on budgeting and forecasting in your mobile app business plan. Specify all expenses and revenue sources and mention how long it will take for them to generate a profit for your company.

Also Read: How to Create a Budget For Your Mobile App Development in 6 Easy Steps?

  • Devise an app monetization strategy.

Provide information about the main principles of your monetization strategy, including pricing freemium model, premium model, partnership and sponsorship, in-app purchases, and in-app advertisements.

Freemium model

This model is great for marketing purposes, but not so great for your business’s finances. To monetize a freemium app, you need to have enough people who use it and are interested in additional content or items that can be bought within the app.

In this part of a mobile app business plan template, provide information about the estimated number of users who might use your app and their average revenue per user (ARPU).

Premium model

This model works well for many businesses, especially if your app will be used by professionals.

Your financial plan should also include information about the price of the product, revenue generated per user, and other expenses. It is crucial to explain how much money you would like to generate to cover all expenses related to product development and maintenance.

In-app purchases

This model is very similar to the freemium one. The difference is that the app itself provides the user with a limited number of items or features, but they can access more content or features by paying for them. This type of monetization works well if you want to give users a taste of your product and get them hooked.

In-app advertising

This model works well if you want to monetize your app and do not mind slowing the user experience. The ad units used should be non-intrusive and should not interfere with navigation.

Another option is to use advertising as a secondary revenue, which allows you to generate income from sponsorships and endorsements.

Partnership or sponsorship model

This model can be used if you do not want to monetize your app yourself. Instead, you will partner up with another company (ex.: telecom operator) and they will provide users with in-app purchases or subscriptions.

  • Development cost plan

This section can include information about the total cost of developing your app, including payment to developers. It is crucial to specify that this part of your plan is an estimate and may vary depending on how much work (and thus how many hours) need to be put into it.

  • Startup and operating expenses

Startup expenses are related to the development of your app. They include items like advertising (marketing), market research, legal services, software development, etc.

On the other hand, operating expenses refer to monthly costs that need to be taken into account once you have finished developing your mobile app and it is up and running.

These typically include payment to employees, rent for offices, maintenance fees, and other app-related expenses.

  • Funding requirements

This section should also include an explanation of what your plan is to finance the development of your app. It is important to note that any investor would want to know how much money you are asking for and what it would be used for.

The key part is Financial Metrics For Your Mobile App Business Plan

The key financial metrics in your mobile app business plan are the ones that give investors all about an idea of how you will make money. You can include this information in your executive summary or leave it for later when you outline the monetization strategy sect projecting of your business plan.

Here are some key metrics for your business plan:

Customer acquisition cost (CAC)

This includes information about the percentage of users that become customers. This is called the conversion rate.

Burn rate, Runway, and Cashflow

The burn rate indicates the amount of money that your company is spending to maintain its operations. Multiply your monthly operating expenses by the number of months before you run out of cash.

Lifetime Value (LTV)

This is the average revenue from a user over their life as a customer. This includes all revenue and user-churn-related expenses.

Average Revenue Per User (ARPU)

The average revenue per user is a calculation of what average income you will get from each customer after a certain time period. To calculate ARPU, divide your monthly revenue by the number of active users in that given month. This information can be found in your app’s analytics.

Profit & loss statement

Your app business plan should include a monthly profit & loss statement. This includes the following information:

  • Profit/Loss in Revenue
  • Gross Margin (Gross Profit)
  • Operating Expenses and Operating Income
  • Net Profit and Net Income also called earning and net cash flow: To calculate this number, subtract all of your expenses from the total revenue.
  • Net cash flow indicates how much money is left after deducting all of a company’s expenses from its total revenue.

Conclusion

In conclusion, a mobile app business plan is a necessity for any company that wants to monetize its app. Remember to keep your plan simple and easy to follow by including financial projections, requirements for funding, and information about how you will make money.

When creating the perfect mobile app business plan, it is important to outline all of the relevant financial information, present the information in a way that is clear and understandable, and include supporting documentation.

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