How App Startup Business Plan Can Turn Your Idea into Reality

How App Startup Business Plan Can Turn Your Idea into Reality

23 March 2022 • 18 min read

Do you have a mobile app idea you'd like to come true? Our first recommendation: don't rush. As our experience working with startups suggests, lots of such projects want to jump from a concept to a profitable business in no time. Yet, developing an app MVP is not a piece of cake as it may seem.

Startups frequently find it hard to face challenges. Negative user feedback, low retention rate, or the like. It all adds up to a negative return on investment and, as a result, failure. To avoid this pitfall, devouring up to 90% of new businesses, you need a startup business plan.

Our company helps new businesses at any stage of development, from the discovery phase to MVP creation. Being experts in business analysis, we are eager to share our knowledge with you. Today, we'll discuss the app startup business plan and how it can benefit your company.

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What Is a Software Startup Business Plan and Why Companies Need It?

A business plan describes your project and its concepts in detail. It covers crucial steps and elements of your company's development. These include your business description, goals, cost and revenue estimates, potential risks analysis, and marketing strategy.

As a rule, the app startups business plan is a forecast for several years ahead. You need it to see where your project is heading and steer it accordingly. It is not set in stone – check through this strategic plan every few months to determine if you're meeting your objectives and whether these goals still suit your business.

Is a business plan, though, really necessary? We are sure that it is. Here are just a few reasons companies need such a document.

Handle competition in the mobile app market

People are increasingly relying on mobile applications. It's unsurprising given that a smartphone is constantly within reach, and mobile solutions tackle issues in various areas ranging from food delivery to online learning.

2021 mobile app report

Consider that in the first quarter of 2021 alone, Google Play contained about 3.48 million applications, and the Apple App Store, in turn, 2.22 million apps. How do you stand out in this crowded market? How can you find your audience? Your mobile app business plan should at the very least answer these questions.

Mobile app market size

Prepare for possible challenges

A company's ability to respond to challenges and its resilience boost its chances of success. But isn't it easier to identify weaknesses or forecast potential difficulties in advance? This way, you can avoid losses and find solutions to problems before they arise.

Think through every detail of the project

Having a good idea is not enough. Even the most brilliant concept is doomed without a defined strategy. A business plan helps you consider all aspects of your project, such as marketing, financing, and management. This document also details your concept, making its execution more understandable not just for you but all stakeholders, including investors.

What Are the Primary Distinctions Between a Mobile App Business Plan and Other Software Business Strategies?

Every business plan is unique. It describes a specific company and its distinct vision of the product, whether a mobile application or other software. Keep in mind there is no one-size-fits-all business plan that everyone can use as a recipe for success.

The fundamental distinction between business strategies for mobile applications and other software is in the following aspects:

Different software needs different planning

The strategy for mobile apps will contrast with any other software development startup business plan. It is attributable to a different technology stack, unique financing approaches, marketing methods, user experience, and market analysis.

Same structure, different content

We'll discuss the structure of the business plan in greater detail later. Yet, the mandatory sections are executive summary, company description, market analysis, marketing strategy, and financing. Each part of your business plan relates to your specific mobile application, its niche, and ways to implement such a project.

Key Elements of an App Startup Business Plan

We promised you to go through the structure of the business plan for app startup in further depth. Developing such strategies is what our company does in the discovery phase, which includes conducting thorough business analytics.

Now, let's get acquainted with the mandatory elements of the business plan.

Executive summary

Start your business plan for app startup with an executive summary –a brief overview of your idea and its advantages. It is your chance to make a great first impression. Think elevator pitch, just in writing. It is the first thing an investor will read.

Be clear and precise to make an excellent executive summary. In this part of your document, you need to list the following:

  • The problem that your application will address
  • A summary of the project's aims and vision
  • A concise overview of your product
  • A description of your competitive advantages
  • Your financial projections and funding needs

We recommend that you write this section of the business plan after you have finished the others. It will make it easier for you to sum up all the information into a gist.

Business idea

It is the business plan part, which is a detailed description of your mobile application. In this section, provide the reader with the following information:

  • Application description. List the features of your mobile solution, explain what makes it distinctive, and discuss the development process.
  • How will you pique the client's interest? Explain why your application is unique and how it will suit the demands of your target audience.
  • Price. In this abstract, you should also estimate how much money you will need to create the application, promote it, and so on. Tell the reader about your monetization strategy as well.

Cost of a mobile app development

Lean Canvas

It is a one-page document, usually divided into 10-12 fields. It helps to deconstruct ideas and test their viability. Thanks to Lean Canvas, you can also find unique sales propositions and resources available for this goal.

Market analysis

This part of your startup business plan entails a detailed market analysis. It's especially critical in the competitive world of mobile applications. In this section, study your niche, learn about its tendencies, potential sources of revenue, and possible challenges.

You should also assess your target audience using the following indicators: geographical, behavioral, and socioeconomic. Don't forget to perform some research on your competitors.

Marketing strategy

Only write this part after thoroughly researching the market. After all, developing a successful marketing plan necessitates a deep understanding of the industry, your target audience, and your competitors.

What you need to do in this business strategy section:

  • Estimate marketing positioning
  • Find marketing channels
  • Plan your metrics: CAC, LTV, ARPU, ARPPU, ROMI

Let's figure out what the abbreviations mentioned above mean:

  • CAC (Customer Acquisition Cost) is the cost of attracting a customer.
  • LTV (Lifetime Value) is the profit generated by a single client throughout their relationship with the company.
  • ARPU (Average Revenue Per User) is the average income you receive from each active user for a specific period.
  • ARPPU (Average Revenue Per Paying User) is an indicator used mainly in applications and games with a free or shareware monetization scheme, showing the audience's loyalty to the prices set in the project.
  • ROMI (Return on Marketing Investment) is an indicator of the profitability of advertising campaigns and, in general, investments in marketing.

SWOT analysis

It is an integral part of the business plan, thanks to which you can determine the strengths, weaknesses, opportunities, and threats of your application, as the abbreviation suggests.

Why is it necessary? First, demonstrate how you distinguish yourself in the market and what prospects are available. Second, to stay cautious of all risks.

SWOT analysis

Financial plan

As a rule, companies create a financial plan for five years ahead. It should take into account the following aspects:

  • Balance sheet. Enter the current amount of money you have here.
  • Revenue. In this section, calculate what profit you will have from your application.
  • Expenses. In this part of your financial plan, indicate your estimated expenses.
  • Cost of development and maintenance. Also, make sure to demonstrate the cost of developing your mobile application.

Funding opportunities

You must mention the sources of financing and capital necessary to launch your project in this section. You should also provide a list of the investment options you intend to use.

We encourage you to analyze these funding opportunities through resources such as Crunchbase, Linkedin, Tech Crunch, networking, and more.

Map with milestones

This part of your business plan for software startup is your step-by-step strategy. You may use it as a road map for your project.

Here you need to set goals and priorities, and based on them, break your project into small portions of work and set deadlines. This section determines the implementation schedule of your application.

We also recommend that you use a lot of visuals and graphs in this part to help readers smoothly follow your progress.

Gantt chart

Team Structure

The last element of your startup business plan illustrates your company's structure. Begin your team's description with its leadership, list the names and positions of these people, and provide a brief biography of everyone.

Be sure to describe other employees in this section, such as developers, designers, and so on. Don't forget to add a list of skills your specialists have to make it easier for investors and potential partners to get to know the team.

Benefits of Creating a Business Plan for App Startup

As you can see, a business strategy is a lengthy document that often takes a long time to put together. Yet, the time spent writing a business plan for a mobile app is well-justified. Not only do you get a realistic image of your project, but you also gain other advantages.

A business plan provides the following opportunities:

Determine your startup's weaknesses

SWOT analysis, included in your business plan, can assist you in identifying your startup's strengths, weaknesses, opportunities, and threats. With this analysis, you can specifically focus on the imperfections of your project. Thus, you will discover solutions to problems and convert your flaws into strengths.

Set goals

A business plan is essentially a document defining your goals and establishing a strategy to attain them.

There are two common strategies to achieve your goals: the long path with expected minimal risks or the short risky path. When we apply these tactics to an MVP launch, we get two startup launch types: soft and hard.

So, a business plan allows you to think about a strategy to achieve goals long before your project's release.

Make informed decisions

A business strategy will address many of your project-related questions. But for this document to be meaningful, you need to conduct extensive preliminary research of finance, marketing, and management areas. Also, include an analysis of competitors and the market.

By compiling this information into a single document, you will understand how to differentiate yourself from the competition, what your unique value proposition (UVP) is, and the project's strengths and shortcomings.

Manage more efficiently

The management process gets considerably smoother with a business plan for software startup. This document serves as a road map, describing each stage of project development. You can also regulate your budget using a business strategy.

Uncover more details than with Lean Canvas

As mentioned earlier, Lean Canvas is a one-page business plan template for tech startups with 10-12 sections that helps you to assess your idea and critical assumptions.

Lean Canvas is a simple and effective tool for quickly evaluating your concept and future project. But it's not informative for a thorough analysis. That's why a business plan, which is an extensive document containing forecasts for several years ahead, gives more in-depth information about your startup.

Present your project more effectively

You can easily use information from your business plan to showcase your idea to investors, other stakeholders, or your team members, such as developers.

A business plan contains a lot of analytical data and forecasts. With it, you can make your presentation convincing and thus gain the support of your partners.

Here are the main benefits of creating a business plan for your startup. You may also use the ideation process to improve this document and broaden your vision and forecasts for the future. Let's talk about this process in greater depth.

How Ideation Helps Improve Your Startup Business Plan

Before we get into how ideation can help you write a business plan for an app, let's figure out what it is. It's the process of generating ideas using various creative approaches like brainstorming, prototyping, sketching, and others.

Here's how the ideation phase can help you build a startup business plan:

Inquire and innovate

Product ideation helps you ask the right questions, and it becomes a reality since all questions are appropriate in such a creative process. Sometimes the most simple requests can lead to innovative ideas.

Go beyond the obvious solutions

The product ideation model or methodology focuses on transforming inner feelings into something tangible and practical. Through empathy, further identification of your ideas, prototyping, and testing, you can increase the innovative potential of your project and illustrate it in a business plan.

Combine your team members' ideas

Collective work on the concept will help you create the most relevant project. If possible, hold an ideation session with your team and then outline the ideas you can use in your business plan.

Explore new areas of innovation

A business plan is a document you need to revise from time to time. It is necessary to review your goals and possibly add new ones. Because of the ideation process, you might suddenly explore project areas that you had not previously considered.

Make your project more diverse

You may learn about your application's lack of uniqueness by researching the market and rivals. Once again, the ideation here comes to the rescue. Your product and startup business plan will be distinctive and attractive as a result of this creative process.

Validate Your Idea

Following the ideation stage, which helps generate ideas, you need to test the viability of these concepts. It's when the idea validation phase steps in. It determines whether your project is worth investing in and whether your product will be in demand in the market.

"How to validate my business idea?" you may still be wondering. Read more about this in our article.

In the meanwhile, we'll tell you what to look for when it comes to product validation.

Goals, Cycles, and Sprints

  • 3-year goals

Such long-term goals help you ballpark a meaningful destination.

  • 90-day cycles

That's how long it takes to make measurable progress, short enough to drive urgency.

  • 2-week sprints

It's where you use small and fast experiments to test your strategy and make course corrections.

Modeling, Prioritizing, and Testing

  • Modeling

Simple models, like the Lean Canvas and the Traction Roadmap, help align the entire team around key assumptions, goals, and constraints that shape the 90-day cycle objectives.

  • Prioritizing

The team then formulates and pitches possible campaigns for meeting the 90-day cycle objectives.

  • Testing

The team uses the right mix of generative and evaluative experiments or learning and validating experiments to uncover insights and achieve traction.

Get Expertise Tech Startup Business Plan

As previously stated, developing a comprehensive mobile app business plan is a time-consuming process. This procedure entails conducting all possible analyses and research. All this is aimed at making your strategy as accurate as feasible.

However, to make the planning of your mobile solution go smoother, you may seek the assistance of specialists and:

  • Request a project audit
  • Undergo business ideation with experts
  • Crash test and audit your idea
  • Cover business plan creation with a discovery phase

If you want to learn how to make a business model for a startup, contact us for a free quote and our team will gladly assist you with the start of your business.

Final Thoughts on App Startups Business Plan Creation

Even the most brilliant spontaneous ideas need a well-thought-out plan. As a result, proper strategy is the key to business success. Thorough planning, in turn, will provide several benefits, including quick identification of flaws and goal setting, successful project management, and the capacity to draw stakeholders' and investors' attention.

If you feel that our app startup business plan example is not enough to describe your unique mobile solution, don't worry. You may contact our team and join the 10% of successful startups by working on your business strategy together with us.

Frequently Asked Questions

What benefits does a business plan provide for a startup?

A startup business plan may help you discover a startup's weaknesses, set goals, make informed decisions, run your business more efficiently, uncover more details on your project, and present your software more effectively.

Do startups use business plans?

Now app startups tend to use business plans more frequently to get a better chance of success. As we know, 90% of new companies are doomed to failure because they do not have a well-thought-out business strategy.

Are ideation and validation essential steps for every startup?

We at Softermii believe so. Ideation is the process through which your concept acquires shape so that you may start putting it into action. And, without validation of this idea, you will be unable to determine whether your project will reach the market, etc.

What sections should I include in an app startups business plan?

Make sure your startup business plan includes the following sections: an executive summary, business idea, Lean Canvas, market and SWOT analysis, marketing strategy, financial plan, funding opportunities, and team structure.

Is it necessary to create a business plan for my technology startup?

Of course, it's not obligatory to write a business plan for an app. Yet, business strategy provides certainty in your project by defining its strong and weak sides and growth opportunities.

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