Write a Successful Business Plan for your Mobile App Idea
Let's say you have the intention to create a cool digital product, whether it's a mobile app or a website, whatever. And you’re 100% sure your project will take off and bring you a good profit. Now all you have to do is to attract investments, find a team of like-minded people, and start achieving the final goal.
To know for sure the game is worth the candle and convince outsiders of the prospects of your idea, you need to conduct a market analysis, systematize the data obtained, and put the collected information together. Of course, it's about writing a business plan.
Do you mind discussing the issue at length?
What Is a Business Plan?
A business plan is a document, which details the essence of a project idea (usually a startup's one) and explains how and when a company is going to make it a reality. It's based on a strategic analysis of the current market situation.
As we’ve said, these plans are mainly aimed at startups, however, this is by no means the only option. Sometimes such a document is created to improve and further develop an existing business.
You can make a business plan for an app or website on your own, or use special templates. Each method has its pros and cons:
Acting on your own. If you choose to tackle the issue on your own, you get the opportunity to take into account the specifics of your project and find a unique approach to its description. But it's only one side of the case. On the other hand, you'll have to spend more time and effort, especially in the absence of relevant experience.
Using ready-made templates. The second method is simpler and faster, but it also has its drawbacks, namely:
some templates are paid, which increases the cost of writing a business plan;
your document runs the risk of looking like hundreds of others. Consequently, there are fewer chances to interest investors in your offer.
Why Make a Business Plan for an App?
An application or a website is also a product, just a digital one. Therefore, its implementation requires some planning too.
Possible goals to create an effective business plan:
obtaining funding. Alas, any startup requires money, and a business plan is designed to convince investors of the attractiveness of a project idea;
working out a business development strategy and/or planning the daily activities of the company;
sale of the business. Yes, there are times when even the most successful digital project becomes a burden. A good decision is to sell it to the benefit, and the business plan will be of great help here;
the need to reorganize the company. In such a case, the business plan explains to stakeholders why these actions are required.
To make the goals of business plans clearer, let's pay attention to the next problem, which is…
Types of Business Plans for Startups
To understand what your business plan for developing an app will be like, what sections it should consist of, and how many pages it must contain, you need to be able to classify these documents. We offer two main approaches to the issue in question.
#1. Classification by the difficulty level
Let's start with the easiest way to classify.
Traditional business plan
Here we're talking about the classic type of business plan for mobile applications (or any kind of product). It comes in two subtypes:
An internal business plan, targeted at the company's employees. It usually dispenses with all sorts of formalities. And, of course, it can be reviewed and rewritten on a regular basis. Its goal is to help business owners evaluate the effectiveness of the business processes.
An external business plan, which is an official document aimed at outsiders. Its goal is usually to get investments.
One-page business plan
We've discussed a more traditional business plan for startups, now it's time to deal with another variation of it, namely, a one-page document. Basically, it's a short summary of your business.
Such a plan is described in a very concise manner. It is highly informative and focuses on the baseline performance of the company. It can be of several subtypes:
introduction of new partners or investors into the business, if they have little time to familiarize themselves with the full-fledged document;
the initial formation of a startup idea, which allows you to quickly evaluate the entire concept;
the targeted plan needed to simplify isolated business decisions.
#2. Classification by the plan duration
Also, when building a business plan, you can focus on the timing of the implementation of the intended strategy, namely:
strategic (long-term) planning, with an implementation period of more than five years;
tactical (medium-term) planning (from 3 to 5 years);
operational (short-term) planning (no more than 3 years of implementation).
How to Start Writing a Business Plan?
You won't get the chance to make a first impression twice. Have you ever heard such a saying? In fact, it perfectly suits the situation related to writing a business plan. You're unlikely to rewrite your document many times, so do your best to foresee everything right away.
And if we’re talking about a digital product, you should first determine the costs of developing and promoting your mobile application (or website) and then describe and document the calculations made.
Since your sponsors are particularly interested in the return on investment, there are two key points to consider:
determining the number of active users able to provide the desired income stream;
calculating how much money is required in order to attract the above number of users.
To get the answers to these questions and ensure the success of a startup business plan, you have to follow the steps described below.
Finding information sources
First of all, you must determine where you intend to get information from and how you're going to check the reliability of the sources found. If the task seems too difficult, hire a team to perform desk research instead of you: they're likely to do it better than you. Surely, the cost of writing a business plan will go up accordingly, but sometimes it's worth it.
Identifying target readers
At this stage, you've probably already understood who your business plan is aimed at: potential sponsors who need to be convinced to invest in your project, or employees you want to motivate. The style of the presentation depends on your answer.
In other words, write your business plan in a language your target readers would understand. Describe your product, be it an app or a website, as simply as possible and avoid complex terms.
Exploring business plan examples
The next step is optional. More likely, it's desirable.
If you've never dealt with building a business plan, you had better start by studying examples of other documents of the sort. Thus, you'll be able to understand how it should look ideally.
Actually, the time has come to collect and further analyze the information (especially since you’ve identified reliable data sources earlier). After all, you cannot hope to score success in business activities without proper preparation.
You have to…
study the needs of potential users of your digital product;
assess the degree of public interest in your project;
analyze your competitors;
highlight the main advantages of your app or website.
Determining the structure of the business plan
Now you’re welcome to proceed to mature the structure of the business plan for your mobile application. What sections will it consist of? What data will it include? Etc!
Writing a business plan
So, that's it. You're ready to begin the main part of creating a business plan for your startup.
And to be sure you’ll achieve better results, check out the next section of our article.
Elements of a Business Plan
So, what sections does the great business plan consist of, if not ideal?
#1. Brief Introduction
Any business plan begins with an introduction, which briefly describes your project. It should be concise, but well-thought-out and clear at the same time.
The thing is, the introduction is the basis of your business plan, which determines whether a likely investor wants to continue reading the document (as business plans are often aimed at investors, as we've explained to you earlier). Therefore, it is the introduction that partly influences the sponsor's willingness to invest in the development of your project.
What's the perfect introduction?
The introduction has to be no more than 2 pages long because it’s just a bait to make an investor want to study your business plan for developing an app from cover to cover. In other words, your task is to highlight the main aspects of your project without going into great details.
Don't be surprised, but sometimes it's best to start writing the introduction last.
The point is that after building a business plan, you'll get a clearer picture of your startup idea. Therefore, you'll be able to find more accurate and convincing wording to create the perfect introduction.
#2. About Us
The title of the next section is something like "Company Description" or "About Us". Simply put, now is the time to tell your potential investors who you really are, which means who they’ll have to deal with.
Describe your company, explain what it specializes in; share with the reader what experience you have in the market. All this would allow the sponsors to form their own idea of you and your professionalism.
#3. Problem & Solution
Also, among the important elements of a business plan is a section describing the usefulness of your project.
So, you're planning to create some kind of digital product to help the user solve a specific problem or satisfy his need, right? Therefore, you have to explain what the problem is, and what solution you're going to provide.
We'd like to give an illustrative example.
Say, you want to build a taxi app like Uber. What problem and what solution can we talk about in this particular case? Let's figure it out.
Problem: the need to have access to a low-cost, easy-to-book taxi service;
Solution: a mobile app based on the on-demand model.
In addition, this section of the business plan for your mobile application must include the target audience description: put it differently, who will benefit from your service most? Who is your average user? Why should he choose your program to solve the indicated problem? And so on.
#4. Market Analysis
The next item on our list of business plan components is market analysis. It must include:
global trends in the application market and a description of how your digital solution matches them;
the rationale why the modern market needs your application (or website);
the main market players (your competitors). It would be ideal to supplement your research with a detailed SWOT analysis.
when creating a business plan for your startup, do your utmost to convince investors that your software is the best choice (and explain why you’re better than your competitors);
analysis of the scalability of the application (given the market situation);
a characteristic of the market share you plan to occupy.
#5. Marketing Strategy
Of course, you cannot create an effective business plan without a detailed description of your marketing strategy.
Why is such a section needed?
The thing is, your digital product can be awesome and truly cool, but that's not enough to succeed. Alas, you have competitors that users know and whose solutions they already take advantage of, while your brainchild is a dark horse for now. And the marketing section aims to explain to investors how you intend to popularize your app.
Be specific, don't speak in generalities! Describe your strategy step by step.
#6. Digital Product Implementation
When writing a business plan, pay particular attention to the analysis of the product implementation phase (i.e. app development).
Moreover, you need to estimate the timing and cost of developing both the initial (beta) and stable versions of the application.
#7. Your Team
Now you need to designate which team is going to work on your project. And keep in mind, work means all aspects, including both development and marketing activities.
Provide details about each team member: his or her experience, level of professionalism, and more.
#8. Risk Analysis
A business plan for mobile apps would hardly be complete without a section devoted to analyzing the risks that may arise during the project implementation. Risks can be related to different stages, such as:
the complexity of the development process itself;
difficulties of promotion.
Of course, it's not enough to simply describe and analyze the main risks of the project; it's also important to provide ways to minimize (or even prevent) them.
#9. Financial Planning
What does the success of a startup business plan imply? Surely, it means your document has served its purpose, which in most cases is to receive investment. Therefore, a lot of time and effort must be spent on financial planning. Trust our experience, potential investors will study this section very carefully!
What should financial planning include?
a general assessment of the investment appeal of your project. Prove that the game is worth the candle, namely, your project is worthy of financial investments;
forecast of future profits. Write when you hope to start making a net profit;
financial sensitivity analysis of the project.
In other words, your task is to convince investors that the ideas in your business plan aren't unfounded. Justify the prospects of your project and determine the moment when you can expect a refund.
We've come close to another important part of creating a business plan for your startup, which is scheduling. It is designed to visually, using the calendar grid, demonstrate your planned activities: development, marketing initiatives, and other events related to your project.
#11. The enclosure of a business plan
Well, the last item on the list is, of course, the enclosure to the plan. It includes tables, charts, diagrams, all sorts of graphs, calculations, any additional documents.
The ingredients for the success of a startup business plan
Remember, your document should never be boring. On the contrary, a good business plan is captivating writing and an effective tool to help you get your project implemented. With it, you set your goals and determine the main means to achieve them.
To get your document done properly, follow a few tips when building a business plan:
Simplicity and clarity of presentation. Keep your document short and clear. Nobody wants to read a hundred boring pages of text. Sometimes it's better to limit yourself to 40 ones, just make sure they're really convincing.
Achievability of the set goals. Don't chase rainbows. Your goals must be realistic and achievable, otherwise, the investor won't believe you, and you're unlikely to receive your money.
Reliability and accuracy of information. In describing how to create an effective business plan, we mentioned the need to find data sources with proven reliability. By no means neglect our advice, it can ensure your success.
Objectivity. Be honest about all the risks associated with the implementation of your project. If you don't want to scare sponsors away, explain to them how you're going to solve possible problems.
Perspective. Of course, your project must be promising and interesting from a business point of view.
Process control. It’s also imperative that you meet all the deadlines listed in your scheduling section.
We hope we've convinced you that running a successful business is impossible without proper planning. So if you have a cool app idea, don’t neglect preliminary analysis and preparation; start the project by building a business plan. And we're happy to help you!