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.

Mobile Application Development Business Plan - 3 Years Profit Forecast

Nonprofit Start-Up Business Plan
Discloses concept of non-profit/charity organizations to attract financing from donors, government agencies, and investors.

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.

Mobile Application Development Business Plan - Startup Cost

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

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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:

Mobile Application Development Business Plan - Marketing Segmentation

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

  1. After running an extensive competitive analysis, we have determined that we will be the leading providers of cloud native development services in the area.
  2. 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.
  3. 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

Mobile Application Development Business Plan - Sales Monthly

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6.4 Sales Yearly

Mobile Application Development Business Plan - Sales Yearly

6.5 Sales Forecast

Mobile Application Development Business Plan - Unit Sales

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.

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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

Mobile Application Development Business Plan - 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

Mobile Application Development Business Plan - Profit Monthly

8.3.2 Profit Yearly

Mobile Application Development Business Plan - Profit Yearly

8.3.3 Gross Margin Monthly

Mobile Application Development Business Plan - Gross Margin Monthly

8.3.4 Gross Margin Yearly

Mobile Application Development Business Plan - Gross Margin Yearly

8.4 Projected Cash Flow

Mobile Application Development Business Plan - 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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