For Startups

How App Startup Business Plan Can Turn Your Idea Into Reality

22 July 2020 • 15 min read
How App Startup Business Plan Can Turn Your Idea Into Reality
Slava Vaniukov
Written by Slava Vaniukov
Co-Founder and CEO at Softermii

If you’re going to turn your app idea into real-life startup, you need to consider that there are a lot of things that matter dramatically on its success. 

You need to consider the market and competition, understand your audience, evaluate all risks, create your financial and marketing strategies, and overall business objectives. All these things you should keep in mind all the time before development starts as without that the chances to succeed become equal to zero. 

To deal with all these aspects and build a truly successful mobile solution you need to know how to write business plan for the app that will emphasize all things in the one picture and guide you during the whole process.


What is an App Business Plan?

A mobile app business plan is a visualization of the project and a listing of key ideas. This is the roadmap that will guide you to success.


Why You Need a Mobile App Startup Business Plan

There has been a shift to mobile in recent years, which makes it evident that many people use smartphones to interact with apps. Because of this, virtually every business needs its mobile app to reach new clients. 

If your app is intuitive and the UX is excellent, that means better client retention and an increase in brand awareness. 

However, you also need to keep in mind that the mobile app market is highly competitive.

Statista has revealed that the iOS App Store now has almost 2 million applications while the Google Play Store has over 2.5 million.

number of apps available in app stores 2020

While the average cost of app development is around $171,450 according to Clutch survey and up to $400, 000 for certain industries. Hence, the app development cost is quite high as well as its maintenance. So investing in a mobile app that is similar to thousands of others probably won't bring you the returns you want. Writing a business plan for your idea helps you to avoid that.

Advantages of Business Plan For Mobile App 

When you’re going to create your application business plan that assumes that you conduct market research, find the market gap you cover with your solution, create a detailed executive plan including financial, marketing, and sales ones. All that combines in one puzzle that is key to your app idea success.

As you might guess, it takes a lot of effort to create the business strategy for a mobile app but it's truly critical when starting a business idea. And here is the essential advantages of making an app business plan:

  • Visualization of your idea

The app business plan will serve you as a visualization of your business idea, and the objective explanation of why it will be profitable.  

  • Actionable executive plan

The important plan of a business plan is an executive plan. Having it in place and following makes your app development consistent and in time

  • Opportunity to get funding for the app

The huge advantage of a business plan is the opportunities to attract investors and get funding for your app idea.  As no one will invest in a vague idea. If you have a defined strategy that you can realize, investors will be interested in it. Having a business plan, it will be much easier for you to apply for such startup funding as Y Combinator or similar ones.

  • Risks evaluation and avoiding 

Creating a business plan assumes that you consider the market conditions, make forecasting, and evaluate risks to avoid them. That increases the chances of app success significantly.

  • More effective business management

As we’ve mentioned before the business plan is a clear visualization of your idea with consistent steps on its realization. Having considered all those things in one place allows you to focus more on the main business objectives and manage all the operations more effectively.

Hence, writing your app strategy is critical when you are starting, and the next we will discover how to create it in the right way.

A mobile app startup business plan has to include evidence that your app idea is viable. This means validation, which is another way of saying analytics and market research. Here is a list of crucial steps that will be involved. 

Things to do before you start with a business plan

Well, before you start app development business plan, you need first to make sure your app idea is successful. For that, you need to validate it, how to run this we spoke in our article on the process of app idea validation. To remind here is a list of key steps you should do:

  • find a problem worthy of being solved
  • make sure an audience exists for your app
  • run market research
  • conduct technology research
  • look at similar apps that are being funded
  • validate your app idea based on the results of your research or through user testing, creation of a landing page, and MVP development.

How to Develop an App Business Plan

Okay, after you have validated your app idea and make sure it is profitable you might go ahead with business plan creation. The real question, this document answers, is whether it would be profitable to produce a product. 

When composing a mobile app business plan for startups, you will need to look at the market and your potential competitors. Locate the market gap you plan on filling with your solution. Then you can estimate development costs. You can try to put a dollar amount on what kind of return investors in your project can expect.

Here are the main parts that should be part of any app startup business plan.


Executive Summary for Your Mobile App

As you think about how to write a business plan for an app, you’ll want to start with the executive summary. It is the initial and most vital part of your development strategy plan because the investor will read it first. 

It should be clear and concise. This would not be the time to get into detailed information about how your product works.

A business plan for an app should also define the market that you’re trying to enter. You’ll talk about your ideal customer, what unique problem your application can solve, and how it will do so. 

Furthermore, you can send an executive summary to mobile app development companies when you get some funding to get the app estimated cost.

And the next important part of the executive summary is the specifications of your goals. These goals should be based on your business analysis and contain clear metrics and KPIs you will measure. 

Please read our articles on telehealth app development and doctor appointment app development.

Business Description

As you look at how to write a business plan for an app, you shouldn’t neglect this section either. This is where you will introduce your business in a more detailed way. You can start by talking about your company more generally. You will finish with the specific mobile app concept in which you are trying to get people to invest.  

Here you should mention:

  • Your Company Business Model: This is where you’ll get specific about your company and what you represent.
  • Brief Company History: You can talk about your company’s origin, the formation of your team, and how you came up with your idea.
  • Location of the Company: Here is where you’ll talk about whether your company is entirely digital, whether you have brick-and-mortar locations, or whether it is some combination of the two. 
  • Team Structure: You can talk about some of your team members. When you’re starting with turning your app idea, the right team is also essential for app success. The must team structure for the start should consist of Business Analyst, Product Manager, Marketing Manager and Financial Officer at least
  • Your Mission: Here you should briefly define your product mission and place on the market. Answer how your app or product is going to help people. 
  • Vision Statement: In your mission statement, you’ll focus on how you currently see the processes that are part of your project. The vision statement is a little different. Here, you can talk about the future that you see for your company and your motivation. 

Here is one more example of how the company description might look like according to PatriotSoftware article:

company description for app business plan


Market Analysis for Business Plan for an App

The next important part of any business plan and for a highly competitive mobile app market is market analysis. You should know about the market state of your niche and competitors. Then you can use that information to make a short-term forecast and predict the trends.  For these purposes the market analysis should include at least the next parts:

  • Demand estimate

The market analysis should include a demand estimate and an industry forecast. Any potential investors are going to look for those. Having them will demonstrate that you know what you’re doing. Firstly, you can compare the demands for of growth of already existing apps in the niche on the market using such tools as AppAnnie, TopCharts, Sensor Tower.

apps analysis for creating app startup business plan

Then you can research the overall demands for the service or product you will offer with Google Trends, Keyword Planner, figure out forecasted growth for the market or make your own one.

  • Target market research

In looking at how to make a business plan for an app, you should know all about your target audience. That should include their habits, lifestyle, age, gender, psychological characteristics, etc. 

You should be able to analyze how your client will use your app. By doing so, you can come up with a customer journey with which they can be comfortable and that you can put as prototypes for design development. Moreover, the creation of user portraits helps you to create a working marketing strategy and find the best way to reach them out when you build your solution. Here is an example from Xtensio templates of how the user persona might look like when you’re going to build the health management app:

buyer persona template for app development business plan

  • Swot analysis of your market and competitors

Any sample mobile app business plan will also have a SWOT analysis. This is how you study your market and competing products. Look for:

  • Threats
  • Strengths
  • Weaknesses
  • Potential Opportunities

swot analysis for mobile app startup business plan

Source: Wordstream

This information can highlight the features that distinguish you from your competitors. You can also talk about improving your processes and addressing problems within your market. 

Please read our articles on real estate mobile app development and video chatting app development.

App Marketing Strategy

Next, your business plan should define your app marketing strategy that should contain the following:

  • Self-Assessment of your app

A mobile application business proposal should contain self-assessment, often through SWOT analysis. Show what your strengths are. Point out where you outpace your competitors and how you might leverage market opportunities. 

Every mobile app begins with a set of challenges. Be upfront with your investors about what those are. Talk about your weaknesses and threats so that they know what you’re trying to overcome. 

Make sure, though, that you explain how issues can be tackled and resolved. Show that you understand the risks and have a legitimate path to sustainability and profit.   

  • App marketing plan

Your mobile app business model should feature a marketing plan as well. This is where you’ll develop an effective, workable marketing strategy to attract your target audience. The must-have of any marketing strategy is a Uniques Selling Proposition that presents how your product is different from what your competitors ones. 

Explain how you will promote your app and win over users. The common ways to promote your app at first might be:

  • Paid Ads - write the platforms types where will you place your ads, and how you will measure results.
  • Landing Page for your app -  it can present your business idea even before its launch and get the first sales. Describe what content your landing page should contain like app description, promotional videos, demo, etc.
  • App store optimization strategy - define how will you increase your app visibility in App Stores and make it more attractive.

Here is an example of mobile app marketing plan you need to run before its launch when released and to increase users retention according to JefBullas article:

app marketing plan

Please read our articles on best healthcare app features and technologies in e-commerce app development.

App Financial Plan

This is usually the last part of your business plan. 

Explain, in detail, how your app will make money. Talk about what kind of financing you need to move ahead.

You might talk about these popular app monetization strategies:

  • Paid Model: This is an app where the user pays for the download.
  • Advertising Model: You make money through ads on the app. 
  • Subscription Model: You make money through users subscribing to the app each week or month. 

The financial strategy of your business plan usually comes with a forecast of profits and growth rate and includes profit, loss, cash flow, start tables, balance sheets, and valuation. 

Don’t forget to include the information about the details on investment types you need, that might be a one-time investment, periodic investment, fixed cost, and variable costs as employee salaries.

Do you need a business plan for an app? Now, you know that the answer is a resounding yes. 

Even if you’re unsure of your app idea, don’t hesitate to get a free quote from our business analysts team on mobile development for your case. Our team has rich expertise in finding the best tech stack and building software for different industries and we know what matters for success for a tech solution.

Anyway, following our guide, for sure you can develop a powerful mobile app startup business plan that allows you to turn your app idea into a helpful and innovative solution for your clients.

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