How to Write a Smartphone App Business Plan
The smartphone app industry has been growing at an above-average base over the last several years, which is why more and more smartphone app businesses are seeking out smartphone app business plans, business app plan templates, and pro forma financial projections.
There are several compelling reasons why the smartphone app industry needs more business plans. For instance, one of the remarkable benefits of technological advancement is the constant influx of innovations into the market. With these innovations, entrepreneurs are discovering innovative ways to integrate smartphone apps, capitalizing on these novel developments. Additionally, our society's reliance on smartphones has escalated to the point where they are more of a necessity than a luxury. This dependency is expected to grow as new applications enter the market, further simplifying our lives.
Irrespective of the reasons driving the demand for business plans in the smartphone industry, having a meticulously crafted and well-documented business plan has evolved from being merely a strategic innovation to a strategic necessity. In light of this, our smartphone app business plan specialist has compiled some valuable tips and techniques for business owners to consider when drafting their smartphone business plan, utilizing a business plan template, or creating pro forma financial projections (10/23).
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Executive Summary for a Smartphone App Business Plan.
In the executive summary section of the Smartphone App business plan, it is crucial to specify the type of business your organization will operate. Usually, business owners opt for a corporation or a limited liability corporation (LLC) as their preferred legal structure for startup innovative app businesses. This choice allows business owners to separate their personal assets and corporate liability. Occasionally, small smartphone app startup companies may opt for a limited liability partnership, particularly when they aim to share ownership responsibilities and rewards with another individual in the short term. However, when seeking funding from investors in the long term, this type of ownership structure often transitions to a limited liability corporation (LLC). Our experienced business plan specialist has consistently shared this insight with us.
Furthermore, within the executive summary section, it is essential to articulate the envisioned customer experience of your business. For a smartphone app company, this segment should provide a customer-centric perspective of your application. Typically, smartphone app proprietors elaborate on the services offered by their application, the user interface, the cost structure, and various revenue streams derived from the product. It is important to note that any information in the executive summary should also be included in the main body of your actual business plan. Therefore, it is advisable to draft your business plan first and then condense and summarize the key points regarding your product and customer perspective in this section.
Company Information for a Smartphone App Business Plan.
In the company information section of a Smartphone App business plan, begin by elucidating the problem your company aims to address for its clients. Subsequently, delve into the "Who, what, where, when, why, and Hows" associated with your business. The issue that a smartphone app resolves for customers can vary widely, from tracking exercise activities to assisting in the search for college entrance grants.
Regardless of the specific problem your smartphone app targets, it is imperative to conduct thorough research on the problem, compile relevant information from various sources, and conclude the section by explicitly demonstrating how your application will effectively solve the identified problem. This strategic approach allows smartphone app business owners to establish a strong foundation for explaining the significance of their application and its potential for success.
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Product Description for a Smartphone App Business Plan.
Smartphone App businesses generate revenues through advertising sales and application downloads. In most cases, smartphone applications allow advertisers to display banners within their apps, generating revenue each time a user clicks on these banners. Another common revenue source for smartphone app owners is charging for application downloads or premium services. This approach allows smartphone owners to estimate revenues more accurately based on projected demand.
Competitive Advantages for a Smartphone App Business Plan.
The Smartphone App industry has experienced significant growth in recent years due to the versatility of applications and the continued global increase in smartphone usage. Smartphone app business owners typically identify a prevalent problem within their target market to establish a competitive edge. Once a common problem is identified, owners design user-friendly applications to help users address these issues. For instance, fitness apps assist users in tracking calories burned or time spent on exercise. Subsequently, it is essential to analyze competitors in the app marketplace to determine how your product differs or surpasses others. These distinctions often become your competitive advantages over entrenched competitors.
Location Description for a Smartphone App Business Plan
Initially, the location for a smartphone app business is often the business owner's home or a nearby office space for convenience. As a smartphone app business grows, demand may necessitate a move to a larger metropolitan area, such as San Francisco or Austin, Texas. Alternatively, some smartphone app companies opt for a virtual workforce, allowing employees to be located globally, making the physical location less significant.
Target Market for a Smartphone App Business Plan.
In general, the target market for a Smartphone App is smartphone users. However, the specific target market for a smartphone app product depends on the application's purpose. For example, an application that offers a vast collection of cookbooks would target semi-professional chefs or parents seeking creative meal ideas for their families.
Understanding the target market is of utmost importance. By comprehending the characteristics of your target market, smartphone app owners can tailor their products to meet their audience's needs effectively. When identifying your target market, segment the group and provide a detailed description of their characteristics. This information will prove invaluable when creating a targeted marketing campaign.
Industry Research for a Smartphone App Business Plan
Based on research conducted by our business plan writer, smartphone app development is the primary industry in which Smartphone App competitors operate. In 2019, smartphone app developers generated approximately $19 billion in revenues, with nearly 900 companies competing in the United States. Over the past five years, the smartphone app industry has experienced an annual growth rate of about 8%. Currently, the industry employs approximately 48,000 individuals. Over the next five years, industry experts project 8 to 9% annual revenue growth. This information should be incorporated into the market research section of your smartphone app business plan, accompanied by additional research on customer segmentation and potential competitors in the marketplace.
Owner and Management Section of a Smartphone App Business Plan
Managing a Smartphone App business differs significantly from other organizations because owners often serve as developers. Consequently, owners must possess a diverse skill set, including leadership, programming, networking, and delegation. Most smartphone app companies initially have only the business owner as an employee. Many firms enlist subcontractors to address various business needs as the company grows. For instance, some application business owners hire marketing firms for marketing-related tasks and accounting firms for financial matters. As the company matures, smartphone app business owners often bring these departments in-house, transitioning from horizontal growth to vertical integration.
Funding Request for a Smartphone App Business Plan
Commencing a Smartphone App business can be a costly endeavor. Business owners need to hire developers for application development and testing. Additionally, smartphone app owners frequently engage advertising companies for their marketing needs. Other expected startup costs include expenses related to travel and participation in industry-specific trade shows. Smartphone app owners often travel regionally, nationally, and even globally to attend trade shows, where they can stay updated on technological advancements that may enhance their products. Regardless of the funding requirements, our business plan writer recommends that all business owners in this industry create detailed budgets reflecting the needs of each aspect of the company. Once completed, it is crucial to summarize these financial budgets in the financial projections section of your business plan.
Financials for a Smartphone App Business Plan.
Pro forma financial projections and models for a Smartphone App business plan should commence by identifying and detailing startup costs. Subsequently, smartphone app business owners should project revenues for the next 12 months, including any revenue generated from premium fees and projected advertising revenues. Once revenue projections are established, owners should multiply the daily projected revenue by 30 (the number of days in a month). This provides a monthly revenue estimate. From this, subtract fixed costs, such as estimated travel expenses, office expenses, rent or lease, labor, and utilities. The result is the projected monthly profit or loss for the business.
Hopefully, these insightful tips and tricks for writing a business plan were helpful. If you need help with a business plan or financial projections, email or call us.
Author: Paul Borosky, Doctoral Candidate, MBA., Author
Owner of: Quality Business Plan and Quality Business Consultant.
Date: 10/10/2023