How to create a business plan for mobile applications
 |
A detailed business plan is essential for executing a successful mobile application strategy. This article will help you to understand what is required to create an effective business plan for mobile applications to demonstrate the viability of and communicate your vision to stakeholders.
The Market
There are more than 2 million apps on the iOS App Store and more than 3 million apps on the Google Play Store. Mobile app revenue continues to grow, with app sales exceeding $180 billion in 2020. While the markets for smartphones and tablets continue to grow, opportunities to generate revenue through mobile applications will continue to present themselves.
What Problem Does Your App Solve?
Within each app store, and within each category of applications within the app store there are hundreds of applications offering almost identical feature sets to other applications. Distinguishing your app from the applications similar to yours is the most important step to winning users and gaining market share. You must be doing something that no one else is doing, or you must be doing something better, more efficiently or more intuitively than every other app doing the same thing.
To build a successful mobile application you, as the product owner, must put yourself in the shoes of your users. Too many businesses take the incorrect approach of focusing primarily on the goals of the business instead of on what the users need from the application. If you are not solving a problem for your users then there will be no users to achieve the objectives of the business. First and foremost your application must contribute value to the users.
Another mistake businesses sometimes make is the belief that their application needs to be all things for all people. There are enough social networks in the world, your business application does not need to be a place where people meet, hangout and chat if that is not the primary reason people use your application in the first place. Your app needs to do it’s primary function well and that’s it. Investing in secondary functions that do not align with your business objectives or the primary objectives of your application risks convoluting the whole experience for your users and turning them off entirely.
Understanding Your Customers
As much as businesses who have invested in mobile applications do not want to hear it, users don’t want to use your application, they want to HAVE used your application. That is, they are only interested in achieving the primary goal they had in mind when they downloaded your application. Investing in superfluous secondary features will not result in users using your app more often so you are better off investing in the continuous improvement of your primary features. This is what is going to grow and retain your user base.
Depending on your industry and target market your app will need to be designed in a way that is intuitive to your users. An accounting application targeted at the layman consumer will need to be designed in a completely different way to an application targeted at an accountant so as to be intuitive and meet the expectations of each.
Conducting market and business analysis will help you understand your target users needs or and objectives as well as the total addressable market size for your idea. Some businesses fail to do the research to understand who their target user is and what the size of the market is. The app stores are full of apps developed by businesses and entrepreneurs who went head first into mobile application development only to learn there are few or no users with the problem the app solves or that users already have other working processes for solving the same problem and have no need for another solution.
Why should you make a business plan for your mobile app?
Return on Investment
What is your objective in developing a mobile application, what is the value to your business and what metrics will you use to measure the value? How many users, subscriptions, sales, page views will your application need to realise a return on investment and how much will it cost to get there? These are all things that must be asked and answered before you embark on developing a mobile application.
Managing Risks
What are the risks involved with the investment in developing a mobile application? They will vary business to business depending on the objectives of the business. You must identify these before getting started and put in place strategies to minimise and manage your risks.
Identifying Opportunities
What opportunities will become available to you once you’ve developed your mobile application? What opportunities are you missing out on by not having a mobile application? A business plan will put you in a position to maximise the opportunities that your mobile application will present.
Staying The Course
It is easy to forget and ignore certain things – it’s easy to lose track or perspective of your original goals and the path you’re on to achieving them. A business plan is a blueprint for achieving your goals. A good business plan will map out milestones and objectives that you will traverse which will allow you to measure your progress and success or failure.
How to write a business plan for mobile applications?
A business plan for mobile applications will help you answer the question:
“Is my idea for a mobile application viable?”.
When writing your plan, you need to estimate the costs of development, hosting, support, marketing and other overheads to calculate what you need to achieve to achieve a return on investment and within what timeframe.
Summary
The most important part of a business plan is the summary of your executive plan. This part will be read first and needs to summarize the problem, your solution, the opportunities and the strategy at the highest level in a succinct, clear and concise manner. If you don’t get this part right you risk your stakeholders, potential investors, sponsors not reading any further.
Business Description
What is the business context for your mobile application and how does your application fit into it? What is your point of differentiation to other businesses in the same space? Summarize the general structure of your business, its history, who its customers are and where your products or services fit into their businesses.
Market Analysis
You need to be able to communicate the various characteristics of your target market, what problems they have that you are solving, how large the market is and what their motivation is when looking for solutions to the problem you are proposing to address. Is the market growing or shrinking, are there any upcoming catalysts that you forecast may affect your markets behaviour or priorities.
You also need to analyse and communicate your competition, their market share, their strengths and weaknesses and what risks and opportunities they may present for the success of your mobile application.
Marketing Strategy
It’s one thing to develop a product that solves a problem people have, but it’s another thing for them to learn that such a solution exists and sometimes that they actually have a problem that needs solving in the first place.
Your marketing strategy will outline how you will reach your target market, how you will demonstrate to them the value your mobile application will hold for them. You will also have to quantify what it will cost to reach and win them as a user or customer, if the cost to acquire a new user or customer is more than the value one customer returns to your business, then you have a viability problem.
You must know your target user intimately, what their motivations and priorities are and where they spend their time both online and offline.
Operational Strategy
Operating a business with a mobile application involves so much more than simply developing the application and submitting it to the app stores. There are numerous other operational activities and concerns you will need to plan for such as customer support and hosting and infrastructure management. You must clearly detail the strategy for handling the operations behind your mobile application and the costs and resources associated.
Finance
Last, but not least, is the financial part of your business plan. This part must be very detailed and accurate, it doesn’t matter how impressive the rest of your plan is, if the numbers don’t add up then your mobile application will not be viable. You must forecast your cashflow and your profit and loss which will allow you to inform your budget and/or the level of investment you will need to obtain to move forward.
Conclusion
A business plan is essential for successfully executing a mobile application development and the ongoing operational obligations. Going ahead without a plan is like hiking through the forest in the dark, you might eventually get to where you wanted to go, but you will inevitably get lost on the way, face some unnecessary challenges or not make it to your destination at all.
