An organized business plan is crucial for a mobile application looking to receive investment, understand the business environment and/or develop necessary strategic partnerships.
There are important aspects of a business plan that you must know. Each business plan includes basic components such as sales forecasts and cash flow. However, there are other issues relevant to investors that must be included in a business plan.
User traffic forecasts
A “good app” is worth nothing if it has no users. An important part of the business plan is the traffic forecast that illustrates an application’s plan for growth. You should be able to determine the amount of downloads you need in order to achieve the business goals you set. If your revenue model includes a premium fee (freemium model), you should make projections accordingly.
In addition to the bottom line numbers calculated above, you must to provide a detailed explanation of the logic and strategy behind them. Do you have a go-to-market plan to generate traffic for the app? What will be the basis for growth once the initial buzz passes? Investors and potential partners will want to see both where you hope to reach, and also how you plan to get there.
The founding team and key personnel
The business plan should introduce the staff members that are involved in the project, including detailed information on their professional and business background. The entrepreneur should make sure that the description demonstrates his/her ability to build and lead a successful business.
If you are working with short-term contractors or freelancers, and you feel that their experience can benefit your business plan, you can include them in the team. Employees who will take key roles in the development and marketing of the company should also appear in the description.
Information on the target market
Investor and potential partners want to see that you know and understand your audience well before they invest any of their time in your company. What is the socioeconomic status of users who download your app? If your application’s audience is mostly young people, will parents be willing to allow their children to download your application? (see the case of the application Blindspot) You must show an understanding of the demographic relevant to your application.
In addition, it is important to familiarize yourself with your competitors. Your competitors can provide important information about the business environment, market and interaction with users. When you examine the competing applications, try to think broadly about all the applications you will be competing with, not just the ones that mirror your idea. For example, a app dating will compete with Tinder but also with Facebook, an alternative platform for online contact.
Customer behavior is unpredictable, making application of a particular revenue model complex. Your business plan should show that you know how to deal with the unexpected. Some common application models:
Freemium, In App ads, In App Purchases, Pay per download, Cross-promotion.
Don’t forget the 30% commission for paid downloads and in-app purchases found on the Apple and Google store. The commission has a significant impact on the revenue model, and entrepreneurs often forget to include it in their business plan.
A business plan should be based on thorough research and should present not only the goals of the start-up, but also how you plan to achieve them.
For more information and guidance on the process of preparing a business plan app, contact us, we will be happy to assist you.