How to Write a Smartphone App Business Plan
The Smartphone App industry is a growing trend for several reasons. First, more and more people around the world are using smartphones as compared to traditional home phones or even older model cell phones. As this demand continues to grow, more and more individuals are using and needing applications based on these devices.
A second reason for the growth of the smartphone app industry is the versatile use of the applications. Smartphone applications, based on research from our business plan writer, may include anything from monitoring exercise activities to keeping track of a business person’s contacts. As people come up with better and more innovative ways to use the smartphone, more applications will enter the marketplace. A final reason for the popularity of smartphone apps and the need for smartphone business plans is our need for convenience as a society. A recent research study found that approximately 40% of millennial’s do not eat breakfast cereal because it takes too long to make and eat. This epitomizes our society’s need for convenience. Smartphone apps are inherently geared towards making our lives easier, thus, more convenient.
From this argument, our business plan writer projects the need for a smartphone app; this is plans to grow substantially over the next several years. As a result, we have compiled some tips and tricks for smartphone app business owners to use when starting a business and looking to write a well-prepared smartphone app business plan.
Executive Summary for a Smartphone App Business Plan.
In the executive summary section of the Smartphone App business plan, make sure to first discuss what type of business your organization will be. For most smart app startup businesses, business owners choose either a corporation or limited liability corporation for their business legal structure. This practice allows business owners to separate their personal assets from corporate liability. In some cases, small smartphone app startup companies will employ a limited liability partnership. When doing this, the short-term objective is to share ownership responsibilities and rewards with another person. However, in the long term, when seeking funding from investors, this type of ownership often flips to a limited liability corporation. At least, this is the feedback that our business plan writer has received.
Also, in the executive summary section, make sure to discuss how your business will look and feel for customers. For a smartphone app company, this segment should describe your application from the customer’s perspective. Most of the time, smartphone app owners will talk about the services provided through their application, the look and feel of the application, and even the cost and different revenue sources from the product. Keep in mind; you do not want to add information in your executive summary does not include in your actual business plan. So, try writing up your business plan first and then summarize your product and customer perspective information in this segment.
Company Information for a Smartphone App Business Plan.
The company information section of a Smartphone App business plan should start by explaining the problem that the company will solve for the client, then address the “Who, what, where, when, why, and Hows.” The problem that a smartphone absolves for a customer could range from tracking exercise movements to searching for college entrance grants. Regardless of the problem that the smartphone app will solve, make sure to thoroughly research the problem, document what other people are saying about the problem, and then always finish the section with directly linking how your application will solve the particular problem that it’s meant to solve. By doing this, a smartphone app business owner is able to set a solid foundation as to why their application is important, and it will succeed.
Product Description for a Smartphone App Business Plan.
Smartphone App businesses generate revenues from advertising sales as well as application downloads. First, most smartphone applications, business owners will allow advertisers to post banners on their application. Each time a user clicks on the banner, the smartphone app company generates revenues. Also, another popular way for smartphone app owners to generate revenues is by charging for application downloads or premium services. In doing this, smartphone owners are able to better estimate the revenues based on projected demand.
Competitive Advantages for a Smartphone App Business Plan.
The Smartphone App industry has been growing substantially over the last several years, thanks to the versatility of applications as well as the continued increase of smartphone usage on a daily basis worldwide. To generate a competitive advantage, smartphone app business owners usually try to identify a common problem in their target market. Once a common problem is identified, then the owner will design a user-friendly application to help users mitigate the problem. For example, common fitness apps help exercisers track calories burned or time spent doing exercise. Once this is done, make sure to take a look at your competitors in the app marketplace. In reviewing competitors, identify how your product is better or different from other entrenched competitors. These differences are often your competitive advantages over the competition.
Location Description for a Smartphone App Business Plan
For the most part, the location of a smartphone home base, in starting, is often the business owner’s home or an office space nearby. The reason for this is sheer convenience. As a smartphone app business grows, then demand often dictates moving towards a large metropolitan such as San Francisco or even Austin, Texas. Or, some smartphone business application companies have decided to go virtual with their employees. When doing this, again, the home location doesn’t matter. Their employees can be global and still functional.
Target Market for a Smartphone App Business Plan.
A common Smartphone App target market is, in general, smartphone users. Specifically, though, a target market for a smartphone app product really depends on the purpose of the application. To illustrate, if an application stores thousands of different cookbooks, then the target market would be semi-professional chefs or even parents seeking creative meals for their family.
The importance of the target market cannot be understated. They understanding your target market, smartphone app owners are able to better design their products to best meet their target markets needs. So, when seeking out your target market, make sure to segment the group and describe their characteristics. This will inevitably help when creating a marketing campaign targeted to this demographic.
Industry research for a Smartphone App Business Plan
Based on quick research from our business plan writer, the main industry in which Smartphone App competitors compete in the smartphone app developers. In 2019, the smartphone app developers generated approximately $19 billion in revenues. In the US, there are almost 900 companies competing in this industry. In the last five years, annual industry growth for the smartphone app industry was about 8%. This industry currently employs approximately 48,000 individuals. In the next five years, our business plan writer has found that industry experts project that revenue growth will be about 8 to 9% annually for the next several years. This information should be included in the market research section of your smartphone app business plan. Also, make sure to expand upon this information with additional research into customer segmentation as well as potential competitors in the marketplace.
Owner and Management Section of a Smartphone App Business Plan
Owning and managing a Smartphone App business is quite different from other organizations. This is because owners are often the developers as well. Because of this, their skill sets need to include leadership, programming skills, networking, and delegation. When starting, most smartphone app companies employees are usually just the business owner and no one else. As the company develops, most firms will utilize subcontractors to fill in their business needs. To illustrate, some application business owners will hire marketing firms to deal with marketing and accounting firms to focus on their county needs. Once a company starts mature, then smartphone app business owners will often take these different departments under their roof. In other words, instead of horizontal growth, the business embraces vertical integration.
Funding Request for a Smartphone App Business Plan
Starting in the Smartphone App business is actually quite expensive. Business owners need to hire developers to develop and test their applications. Also, smartphone app owners usually use advertising companies for their advertising needs. Also, other common startup costs include travel and tradeshow expenses. Smartphone app owners, based on our research, often travel regionally, nationally, and even globally for smartphone app specific tradeshows. These tradeshows are critical because new technological advances are continually entering the marketplace. Often, these technological advances may be utilized by smartphone app owners to help improve their product. Regardless of the funding needs, our business plan writer recommends that all business owners in this industry create detailed budgets reflecting the needs for each aspect of the company. Once complete, make sure to summarize your financial budgets in your financial projections section of your business plan.
Financials for a Smartphone App Business Plan.
Financial projections and financial models for a Smartphone App business plan should first start with identifying and detailing your startup costs. Once this is complete, then smartphone app business owners should project their revenues for the next 12 months. Revenue projections should include any premium fees charged as well as projected advertising revenues. Once this is done, the business owner could should then multiply the daily projected revenue flows by the number 30, which is the number of days in the month. Once this number is found, the business owner should subtract fixed costs related to the business. Fixed costs may include estimated travel costs, office expenses, rent or lease, labor, and utilities. Once the fixed costs are subtracted from revenues, this leaves the business owner with their projected monthly profit or loss.
Hopefully, these insightful tips and tricks for writing a business plan were helpful. As always, if you need help with a business plan or financial projections, just send us an email or give us a call.
Author: Paul Borosky, Doctoral Candidate, MBA., Author