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Mobile application development business plan for starting your own company
From being just another technological gimmick to becoming something we use for pretty much anything, mobile apps have come a new way. As of now, everyone needs a mobile app. Businesses, services, retailers, all of them. We are presenting this mobile app business plan that you can use to establish your own mobile app development business.
Read through this document if you want to know how to write a business plan for an app. This mobile application business plan template will cover all there is to starting a mobile app development business from planning to the finances involved in it. The requirements for this are just like those for a online dating business plan.
Executive Summary
2.1 The Business
Rob Developers will be a cutting-edge company in the field of mobile application development and will act as an example for this mobile application startup business plan that you are about to go through. The business will be focused at providing all mobile application development services under one roof. It will be owned by Rob Hancock who will also be the chief executive.
2.2 Management of Mobile Application Development Business
If you want to know how to write a business plan for a new mobile application, the next step is learning the management structure of the business. As said earlier, the business will be headed by Rob Hancock. He will be hiring 3 managers for business process improvement. These managers will be responsible for external relations, operations, and sales of the business.
Just like a video games business plan, the managers will be answerable to Rob and all the important matters would be brought to his notice as and when they arise. Rob will exercise supreme power over the business and his decision, after consulting the concerned manager, will be final.
2.3 Customers of Mobile Application Development Business
As mobile application development is a diverse business, the customers will also be from a range of different categories. The main customers of this business will be:
- Businesses who want online store apps.
- Corporations that need apps for employees.
- Educational institutions needing campus management system apps.
- People who want to get mobile apps developed for a business.
- Companies who want apps developed for their products.
2.4 Business Target
Subjectively, the target of Rob Developers is to become the leading app developer in the US. The following objective targets are set at the start of the business:
- Having at least 10 permanent long-term clients by the end of the first year.
- Starting to generate at least $27,000 in profits per month by the end of the three years.
- Bringing innovation into the business wherever possible.
Company Summary
3.1 Company Owner
This mobile app development business will be headed by Rob Hancock. Rob is a software engineer and has been the mobile app development team leader at a reputable software solutions firm for 5 years. He is passionate as well as well-educated and experienced for this job.
3.2 Why the Mobile App Development Business is being started?
Looking at app business plan examples, we can tell that it is a must to have a strong reason, other than money, for starting a business. The reason Rob is starting this business is that he ahs a passion in developing mobile applications. He has been doing it for a very long time.
In addition to that, Rob has made quite a lot of friends in the field. He is confident that he can bring together the perfect combination of developers and clients onboard that will make it very profitable to run the business.
Let’s now see some other aspects of this business plan for app startup.
3.3 How the Mobile Application Development Business will be started?
Step1: Planning Phase
Planning is one of the most important aspects of any sample business plan for mobile app is the planning phase. This is the phase where the business owner needs to conduct research on the demand and supply situation in the field to see if the venture is even worth investing the money.
Different surveying tools will be used to make sure that the field has enough space for a new entrant to enter and actually make profit.
Step2: Brand Development
As the mobile app development field is a pretty crowded one, the business needs to make a brand that people can trust. Only then can they be successful in getting enough customers.
Step3: Establish An Office
People cannot trust a company which does not have an office. Rob Developers will establish an office in Downtown Manhattan where the business will operate from.
Step4: Establish a Web Presence
It goes without saying that any technology-related business has to have a web presence. Rob Developers will establish a website that will serve as an interface for connecting with the customers as well as for marketing.
Step5: Promote and Market
An elaborate marketing plan will be made to make the business and the brand known to the target audience.
| Start-up Expenses | |
| Legal | $220,000 |
| Consultants | $0 |
| Insurance | $25,000 |
| Rent | $15,000 |
| Research and Development | $32,000 |
| Expensed Equipment | $48,000 |
| Signs | $3,200 |
| TOTAL START-UP EXPENSES | $343,200 |
| Start-up Assets | $330,000 |
| Cash Required | $351,000 |
| Start-up Inventory | $46,000 |
| Other Current Assets | $232,000 |
| Long-term Assets | $250,000 |
| TOTAL ASSETS | $1,209,000 |
| Total Requirements | $1,552,200 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $343,200 |
| Start-up Assets to Fund | $1,209,000 |
| TOTAL FUNDING REQUIRED | $1,552,200 |
| Assets | |
| Non-cash Assets from Start-up | $1,585,000 |
| Cash Requirements from Start-up | $321,000 |
| Additional Cash Raised | $56,000 |
| Cash Balance on Starting Date | $32,000 |
| TOTAL ASSETS | $1,994,000 |
| Liabilities and Capital | |
| Liabilities | $29,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $36,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $65,000 |
| Capital | |
| Planned Investment | $1,552,200 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,552,200 |
| Loss at Start-up (Start-up Expenses) | $376,800 |
| TOTAL CAPITAL | $1,929,000 |
| TOTAL CAPITAL AND LIABILITIES | $1,994,000 |
| Total Funding | $1,552,200 |
Services
Now that we know these things about establishing a mobile app development business, the next thing this mobile application business plan template needs to cover is the services this company will be providing to the customers. In a broader sense, we will be providing all the services of software development.
However, just like a business plan online store the services of this app development business plan can be divided into the following four categories.
- Mobile Application Development
This, as the name suggests will be the chief service provided by the company. We will cater the needs of any and all people who need to have a mobile app made for any purpose. The company’s bulk resources, and manpower will be dedicated to this service.
- Web Development
This service will be provided to augment the apps as well as in the form of a dedicated service. We will provide all sorts of web development services for mobile and desktop use scenarios.
- Cybersecurity
Cybersecurity is one of the chief concerns for the people using mobile apps. We will provide this service so that the people coming to us can get all the services in one place.
- Cloud-Native Development
The software world is shifting to the cloud faster than we think. It is imperative to include cloud-native development services in our menu to make sure we get substantial business and long-term clients.
Marketing Analysis of Mobile Application Development Business
Franchise Business Plan
Having an in-depth knowledge of the industry is a must for making a business model mobile app. In this section, we will be looking at the marketing analysis of this start up application mobile. The industry we are looking at is a $170 billion industry. This means that if you start a successful business in this field, we can make some serious money.
Before you know more about how to make a business plan for an app, there’s another thing that you need to know. The mobile app development industry is going to grow to the size of $470 billion by the end of 2026 which is a projected growth the like of which no industry has seen in the recent history. This makes this application for business proposal a lucrative one for any investor.
5.1 Market Trends
Now, we have to have a look at the market trends of the app business plan. Just like starting a virtual assistant business, this field has seen its fair share of growth in the past years. The main thing to be noted here is that this industry has not been easy to enter by newcomers, not even by a long shot.
Just like any business plan for a video game company, we need to make sure that we bring something new to the table. Only the companies focusing on innovation and novelty have been successful in this field.
5.2 Marketing Segmentation
The expected market segments that the mobile application development business will be serving will include:
5.2.1 Corporate Clients
These will be the long-term clients that will give us a steady stream of income. These will not be in a large number but will be the high-paying ones.
5.2.2 Educational Institutions
This will also be a source of sustained income. These clients will hire our services to get campus management systems made.
5.2.3 Individual Clients
These will be the small business clients looking to have mobile apps made for their business. These will not be very high paying but will be in a large number.
5.2.4 Small Businesses
Small business who want to have a mobile app for their products will also be one of the market segments for our business.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Corporate Clients | 32% | 41,000 | 42,000 | 43,000 | 44,000 | 46,000 | 10.00% |
| Educational Institutions | 22% | 24,000 | 25,000 | 27,000 | 28,000 | 29,000 | 10.00% |
| Individual Clients | 27% | 34,000 | 36,000 | 38,000 | 39,000 | 40,000 | 10.00% |
| Small Businesses | 19% | 19,000 | 20,000 | 22,000 | 24,000 | 25,000 | 11.00% |
| Total | 100% | 118,000 | 123,000 | 130,000 | 135,000 | 140,000 | 10% |
5.3 Business Target
- To be the leading mobile app development service provider in the USA.
- To start making sustained profit of more than $27,000 a month after three years.
- To have long-term corporate clients who can give us business on a permanent basis.
- To be the first to accept new things and innovation in the field of mobile app development.
5.4 Product Pricing
We will price our products and services around the average of the competition, a bit higher. This is because we will be hiring the best professionals of the field and that comes at a price.
Marketing Strategy
Moving on, the next thing needed to complete this mobile app business is the mobile app marketing strategy template because the business plan cannot be complete if we do not have a mobile app marketing plan pdf. The marketing strategy of this business will be centered around two things, innovation, and experience.
Note
We will be an innovative company and will be hiring some of the most experienced people of the industry from all over the country. Those are the most important things for any business plan for an internet startup and will give us the competitive edge we need to be successful.
6.1 Competitive Analysis
- After running an extensive competitive analysis, we have determined that we will be the leading providers of cloud native development services in the area.
- The second competitive edge we have is the CEO of Rob Development, Mr. Rob Hancock. He is an experienced and educated man who will be a great asset for the company.
- The third competitive edge Rob development is going to have will be the innovation. We planned to be the first company in the US to adopt any new tech that comes to the market.
6.2 Sales Strategy
- We will use print, electronic, and social media to advertise the business to drive sales.
- We will use all possible ways to get projects from notable clients that can earn us top dollar.
- We will price our products and services according to the competition in the field.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Mobile Application Development | 48,000 | 50,880 | 53,933 |
| Web Development | 45,000 | 47,700 | 50,562 |
| Cybersecurity | 35,000 | 37,100 | 39,326 |
| Cloud-Native Development | 28,000 | 29,680 | 31,461 |
| TOTAL UNIT SALES | 156,000 | 165,360 | 175,282 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Mobile Application Development | $45.00 | $52.20 | $60.55 |
| Web Development | $50.00 | $58.00 | $67.28 |
| Cybersecurity | $46.00 | $53.36 | $61.90 |
| Cloud-Native Development | $60.00 | $69.60 | $80.74 |
| Sales | |||
| Mobile Application Development | $2,160,000.00 | $2,655,936.00 | $3,265,738.91 |
| Web Development | $2,250,000.00 | $2,766,600.00 | $3,401,811.36 |
| Cybersecurity | $1,610,000.00 | $1,979,656.00 | $2,434,185.02 |
| Cloud-Native Development | $1,680,000.00 | $2,065,728.00 | $2,540,019.15 |
| TOTAL SALES | $7,700,000.00 | $9,467,920.00 | $11,641,754.43 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Mobile Application Development | $43.00 | $49.00 | $56.00 |
| Web Development | $48.00 | $55.00 | $63.00 |
| Cybersecurity | $44.00 | $50.00 | $57.00 |
| Cloud-Native Development | $58.00 | $66.00 | $76.00 |
| Direct Cost of Sales | |||
| Mobile Application Development | $2,064,000.00 | $2,493,120.00 | $3,020,236.80 |
| Web Development | $2,160,000.00 | $2,623,500.00 | $3,185,406.00 |
| Cybersecurity | $1,540,000.00 | $1,855,000.00 | $2,241,582.00 |
| Cloud-Native Development | $1,624,000.00 | $1,958,880.00 | $2,391,020.80 |
| Subtotal Direct Cost of Sales | $7,388,000.00 | $8,930,500.00 | $10,838,245.60 |
Personnel plan
The mobile app development business plan also needs to discuss the staff that will be needed to start and run the business. If you need to know how to create a business plan for an app, here is a rough outline of the staff the company will need.
7.1 Company Staff
- Rob Hancock will be the CEO.
- 3 Managers for operations, sales, and external relations.
- 5 App developers.
- 3 Web developers.
- 2 Cloud-native developers.
- 2 Cybersecurity experts.
- 1 Office boy.
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Operations Manager | $14,000 | $15,400 | $16,940 |
| Sales Manager | $13,000 | $14,300 | $15,730 |
| External Relations Manager | $13,000 | $14,300 | $15,730 |
| App Developers | $54,000 | $59,400 | $65,340 |
| Web Developers | $35,000 | $38,500 | $42,350 |
| Cloud-Native Development | $24,000 | $26,400 | $29,040 |
| Cybersecurity | $26,000 | $28,600 | $31,460 |
| Office Boy | $6,000 | $6,600 | $7,260 |
| Total Salaries | $185,000 | $203,500 | $223,850 |
Financial Plan
The next thing we need is the financial plan for mobile application. Here is the rough outline of the finances that will be needed to start the business.
- The cost of setting up the office.
- Salary of the staff for the first six months.
- The money needed for promotion of the business.
- The money needed for hiring the staff and conducting the interviews.
- The money needed for setting up the website of the business.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.26% | 8.27% | 8.30% |
| Long-term Interest Rate | 8.33% | 8.36% | 8.45% |
| Tax Rate | 23.80% | 24.06% | 24.56% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5343 |
| Monthly Revenue Break-even | $131,200 |
| Assumptions: | |
| Average Per-Unit Revenue | $235.00 |
| Average Per-Unit Variable Cost | $0.62 |
| Estimated Monthly Fixed Cost | $163,980 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $7,700,000 | $9,467,920 | $11,641,754 |
| Direct Cost of Sales | $7,388,000 | $8,930,500 | $10,838,246 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $7,388,000 | $8,930,500 | $10,838,246 |
| Gross Margin | $312,000 | $537,420 | $803,509 |
| Gross Margin % | 4.05% | 5.68% | 6.90% |
| Expenses | |||
| Payroll | $185,000 | $203,500 | $223,850 |
| Sales and Marketing and Other Expenses | $110,000 | $126,000 | $127,000 |
| Depreciation | $2,240 | $2,356 | $2,450 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,800 | $3,000 | $3,100 |
| Insurance | $1,900 | $2,000 | $2,100 |
| Rent | $2,600 | $2,700 | $2,800 |
| Payroll Taxes | $29,000 | $30,000 | $31,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $333,540 | $369,556 | $392,300 |
| Profit Before Interest and Taxes | ($21,540) | $167,864 | $411,209 |
| EBITDA | ($21,540) | $167,864 | $411,209 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | ($4,308) | $33,573 | $82,242 |
| Net Profit | ($17,232) | $134,291 | $328,967 |
| Net Profit/Sales | -0.22% | 1.42% | 2.83% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $55,000 | $59,400 | $64,152 |
| Cash from Receivables | $19,000 | $20,520 | $22,162 |
| SUBTOTAL CASH FROM OPERATIONS | $74,000 | $80,660 | $87,113 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $74,000 | $81,000 | $88,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $40,000 | $41,000 | $42,000 |
| Bill Payments | $19,000 | $21,000 | $22,000 |
| SUBTOTAL SPENT ON OPERATIONS | $59,000 | $62,000 | $64,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $60,000 | $64,800 | $69,984 |
| Net Cash Flow | $18,000 | $20,000 | $22,000 |
| Cash Balance | $26,000 | $27,000 | $29,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $269,000 | $301,280 | $331,408 |
| Accounts Receivable | $26,000 | $29,120 | $32,731 |
| Inventory | $4,000 | $4,480 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $285,900 | $320,208 | $359,914 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,000 | $21,280 | $23,940 |
| TOTAL LONG-TERM ASSETS | $26,000 | $29,120 | $32,760 |
| TOTAL ASSETS | $298,700 | $334,544 | $376,362 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $19,000 | $21,280 | $23,919 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $16,000 | $17,920 | $20,142 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $15,000 | $16,800 | $18,883 |
| Paid-in Capital | $29,000 | $30,000 | $30,950 |
| Retained Earnings | $58,000 | $63,220 | $69,542 |
| Earnings | $201,000 | $219,090 | $240,999 |
| TOTAL CAPITAL | $298,600 | $325,474 | $358,021 |
| TOTAL LIABILITIES AND CAPITAL | $313,600 | $334,544 | $376,362 |
| Net Worth | $297,000 | $323,730 | $356,103 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.29% | 8.08% | 8.95% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.12% | 10.10% | 11.20% | 9.80% |
| Inventory | 5.40% | 5.98% | 6.63% | 9.90% |
| Other Current Assets | 2.09% | 2.32% | 2.57% | 2.40% |
| Total Current Assets | 150.20% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 11.44% | 11.60% | 11.70% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.95% | 4.99% | 5.04% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.60% | 7.66% | 7.73% | 7.38% |
| NET WORTH | 101.30% | 102.11% | 103.05% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 95.00% | 97.57% | 100.30% | 99.00% |
| Selling, General & Administrative Expenses | 95.00% | 97.57% | 100.30% | 97.80% |
| Advertising Expenses | 1.60% | 1.64% | 1.69% | 1.40% |
| Profit Before Interest and Taxes | 42.00% | 43.13% | 44.34% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 35 | 35.2 | 36.08 | 33 |
| Total Debt to Total Assets | 0.17% | 0.17% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 74.20% | 75.20% | 75.59% | 75.00% |
| Pre-tax Return on Assets | 95.03% | 99.78% | 104.77% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 34.08% | 35.14% | 36.23% | N.A. |
| Return on Equity | 53.26% | 54.91% | 56.61% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.2 | 33.81 | 33 | N.A. |
| Accounts Payable Turnover | 15.5 | 16 | 16.4 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.4 | 2.4 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $250,000 | $264,000 | $278,784 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.88 | 0.87 | 0.87 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29.2 | 29.4 | 29.7 | N.A. |
| Sales/Net Worth | 2.1 | 2.1 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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