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How to Write a Business Plan for a Mobile App Startup?

Stanislav Bilenkyi

Tech Researcher

Anton Baryshevskiy

Head of Business Development, Co-Founder

Head of Business Development

Get your project estimation!

What is an app business plan, and why does every project need one?

The foundation of every business is an idea or a flash of inspiration. A simple idea or a conversation with a potential business partner could be the spark that sets everything in motion. It is essential to assess your real opportunities, regardless of how appealing an idea may be. For that, you should create a business plan before you consider launching a new business.

A company's business plan is like a roadmap. If you have a strategy in place, you can more easily lead your company to its desired destination. Whether you have been in business for years or are just starting out, a business plan is necessary for long-term success.

We at Mind Studios have been in the software development business for a while, and creating a business plan for a mobile app is something we’ve done plenty of times. The article you’re about to read is based on our own experience, with insights and advice on how to build a solid business plan from the ground up. Also, we’ve added our template to help stakeholders and investors have a clear and, most importantly, equal understanding of your startup idea. So if you don't know how to plan an app yet and where to start, let's find out more about it.

Highlights:

• Startups seeking investment must have a business plan that details their business idea, target customers, marketing approach, and financial estimations.
• The quality of a company’s business plan directly correlates to its ability to attract investors and stay focused on growth objectives.
• Executive summary, company and team overviews, financial projections, market analysis, and marketing forecasts are all crucial parts of most business plans.

What is a business plan, and why is it important for mobile app startups?

A mobile app business plan is a document for starting or scaling a mobile app business . It describes your business concept, identifies your ideal customer base, demonstrates your marketing strategy, and provides financial estimates, among other things.

A business plan is commonly considered a document that serves as a tool for obtaining financing. Still, it is much more than that because it contains a wealth of useful information for investors.

Who receives funding using a business plan for software development?

• Startups and early-stage companies
• Established companies looking for expansion.
• Mid-sized firms trying to expand or enter new markets.
• R&D projects

In 2023, worldwide venture capital investment in software development totaled around $85 billion.

Likewise, in 2023, the average deal size for VC-funded software businesses was approximately $8.5 million.

As for crowdfunding, in 2023, Kickstarter software development projects raised over $120 million, with the average campaign raising about $25,000.

It is important to remember that a business plan is, first and foremost, an internal document essential for the successful administration of your company. A company strategy can help business owners to:

• Assess the market environment and the strategic positioning of their business.
• Make informed decisions.
• Have a strong plan they can refer back to to evaluate success.
• Significantly increase the odds of receiving funding.

What should a business plan include?

Let's take a closer look at what a business plan actually includes. Despite the fact that there is no universally accepted standard or order of items for describing a business plan, there are several common components that will answer the majority of the questions that investors will have, such as:

Executive summary

Company description, market analysis, products and services.

• Marketing and sales strategy

Financial plan

This is the first and most important part of your mobile app business plan because investors will read it first. Although it is first on the list of sections in a business plan, you should write it after finishing all the other parts, since it will serve as a summary of an existing plan .

The executive summary should be brief and not go too deep into how your product works. Instead, in this section, you should briefly describe your business , the niche you aim to fill , your target customer , and your application's unique solution (or a service you want to provide ).

Make your pitch unique to set your company apart from the competition. Highlight your idea's unique value proposition. This proposition should clearly describe your mobile app's unique benefits and features, stressing how it stands out . To further differentiate your product, play up your company's capabilities, such as new technology , great team knowledge , and strategic relationships . Remember that a well-defined, distinctive value proposition is critical to persuade investors and stakeholders of your company's potential for success.

Determine your objectives . You need to set clear and attainable goals, since investors will evaluate your goals for suitability. In this phase, your exit plan's goal must also be determined. A business owner must plan to 'leave' the business through exit planning. An exit can take several forms, including selling all or part of the company, merging it with another, passing it to a family, or listing it on a stock exchange through an IPO.

You should list funding needs and how the funds will improve your company's appeal. An effective startup business plan for mobile app success must include maximum transparency at each stage.

Make your document convincing . To do this, keep your product's concept and goals consistent throughout the paper. Give your reader accurate data and realistic project expectations. Make sure the business plan and executive summary creator's name and your team members' names are consistent throughout the documentation.

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After the executive summary, we recommend creating a company description. In this section, describe your company's history, mission, and the values that inspire you and your employees. If you have a tech partner or an outsourcing company, you should include it, as investors would want to know about and understand your staff's skills and experience.

Although it may sound basic, it is important to ensure you provide further details about your team, such as the number of team members, their names, job titles, etc.

The mission statement should describe the purpose of your company and the fundamental principles that guide your business. After establishing your mission, outline the primary challenges and the solutions to them that your startup can offer.

In this business plan section, assess the current and projected market conditions. Similarly, emphasize the approximate market share you are targeting. You should be aware of the present situation in your industry, have up-to-date information, and be able to generate a short-term forecast.

Mind Studios tip: The TAM/SAM/SOM definition is a great resource for analyzing the market. You can learn more about them in our article How to Do Market Research for Startups . When creating a business plan for app development, we recommend that you treat it as a business in general rather than just a mobile application. However, some differences exist: mobile apps are usually presented in app stores (AppStore and Google Play are the most popular ones). Therefore, most of your market study operations will be focused on them. Research your competitors and carefully read reviews for negative feedback - they will provide you with vital information about what competitors are not doing efficiently so far, which you may use to your benefit.

Your goal is to assess whether there’s a real market for your product, whether there are enough customers in the market, and whether those customers are willing to pay money to use your product.

Here you can highlight your product's unique selling points and provide more information about it (you can also mention your startup business proposal). If you were advised to keep things concise in the Executive Summary , now is the time to paint a more in-depth picture of your services or products for the readers.

Mind Studios tip: When marketing a mobile app, it's important to be explicit about its value and the problems it solves. Learn how to differentiate yourself from the competition by taking advantage of the possibilities presented by mobile apps. Mind Studios has an extensive background in developing mobile apps, and we would gladly consult you with any questions you may have, so feel free to contact us .

Marketing strategy and sales strategy

This part of the document should detail your product promotion strategy goals, checklist of objectives, and projections. Your knowledge of marketing your product or service is more valuable than the product or service itself.

A successful marketing plan helps acquire and retain new users, so it should also include the channels you want to use to attract customers and the funding you need for that purpose.

• Content marketing Content marketing is a good way to develop and share valuable, relevant content to attract and engage your target audience. This can involve blog posts, videos, infographics, and social media updates tailored to your target customer needs and interests. When done right, quality content can establish your company as an industry leader and bring organic traffic to your app.
• Influencer marketing and collaboration Partnering with influencers with a large following in your niche can help you expand your reach and reputation. Influencers may generate attention for your app through reviews, tutorials, and endorsements. Collaborating with them helps you tap into their existing audience, potentially converting their followers into app users.
• Cold calls Cold calling, while more conventional, could still be a successful tactic, particularly in the B2B sector. Directly reaching out to potential clients allows you to tailor your presentation, solve individual requirements, and create important connections. Cold calls can also give rapid feedback and highlight areas for growth.
• Social media Social media networks such as Facebook, Instagram, Twitter, TikTok, and YouTube are effective tools for connecting with your audience. Regular articles, engaging stories, and live sessions help boost app awareness and build a community around your company. Social media also enables tailored advertising to reach specific demographics.
• Online advertising Online advertising, such as Google Ads and social network ads, can increase traffic to your app. Paid campaigns are highly personalized, allowing you to reach potential consumers based on their interests, habits, and demographics. Investing in online marketing may quickly increase your app's downloads and user base.

Marketing budget forecast

It is also important to set a reasonable budget for your marketing efforts. Depending on your client acquisition strategy, consider the costs of content development, influencer collaborations, social media management, internet advertising, and a specialized sales crew for cold calling. A well-planned budget should incorporate initial launch charges and continuing costs for sustained engagement and user acquisition.

Anticipated growth results

Lastly, setting attainable user acquisition and retention targets can help you measure the effectiveness of your marketing activities. Analyzing market trends, competition strategies, and historical data can help you predict growth results. Regularly analyzing and revising your plan based on performance metrics ensures long-term growth and adaptability in a competitive market.

Mind Studios tip: Advertising a mobile app frequently follows the same rules for any other kind of product. But there are a few subtle tactics that you can use as well. To illustrate the point, mobile app markets are interested in promoting new solutions. As a result, they subtly boost app traffic for the first day. Before releasing your app, verify that it has undergone thorough testing, is ASO optimized, and has received positive reviews. This approach can give you an early advantage and keep you going strong even after the first 24 hours. It will be easier if you target the best possible reviews right from the start.

If you have any further questions about marketing your product or service correctly, contact us for a free consultation , and our business analyst team will be happy to help you.

To correctly set up this part of your business plan, you should clearly understand what kind of financing you need to move forward. Moreover, you need to express it as clearly as possible to be sure a potential investor will also understand what funding you need.

The financial model typically consists of a three- to five-year prediction of all key forecasted indicators, such as profit and loss , cash flow , balance sheets , start tables , unit economics calculations , and your app's projected revenues and costs . To accurately estimate the actual cost and distribution of assets, your financial record must include all these elements, each with a clear explanation.

Startup costs and funding required

Inform your investors about estimated costs. Since these numbers fluctuate, we recommend making reasonable estimates and leaving room for extra expenses .

Designate all types of costs:

• One-time costs (e.g. relocation costs, costs for obtaining an office space, equipment, servers, software, licenses)
• Fixed costs : they remain unchanged regardless of whether you produce something or not (e.g. rent, insurance, lease payments, fixed salaries)
• Variable costs : costs that change according to the production volume (e.g. wages)

Mind Studios tip: When establishing a budget, the expense of designing and developing the app for mobile devices is a major component. Many factors go into this price tag, including the team's budget, the technology selected, and any necessary third-party services or libraries, among other factors.

Don't hesitate to contact us if you have difficulty figuring out which library or combination of tools would be ideal for developing your idea; our experts will assess your concept and recommend the best course of action.

Estimate your marketing budget

You may estimate the cost of marketing services based on the market analysis you outlined in the preceding section of your business plan. Understanding the marketing budget is essential to all parties: you, as the app owner, investors, and other stakeholders.

Landing page creation

• Estimate costs for design and development.
• Include expenses for hosting and domain registration.
• Allocate funds for content creation, including copywriting and promotional videos.
• Budget for A/B testing tools to optimize content and design.
• Plan for analytics tools to track visitor behavior and campaign performance.

Website and blog launch

• Budget for website design, development, and maintenance.
• Include costs for hosting, domain registration, and SSL certificates.
• Plan for SEO services to optimize blog articles for better promotion.
• Estimate expenses for regular updates and content management.

Product launch type

Hard launch:

• Include costs for marketing campaigns targeting the entire audience.
• Budget for customer support and potential bug fixes post-launch.

Soft launch:

• Estimate expenses for releasing an MVP or full version with onboarding screens to a limited audience.
• Include costs for monitoring and gathering feedback for further improvements.
• Plan for incremental marketing expenses as the product is gradually introduced to a larger audience.

You may also be curious about the general cost of developing an app .

Monetization strategy

It is another section you need to add to your mobile app business plan. By illustrating your monetization model , you’ll demonstrate to your investors and other stakeholders that your project will be profitable and provide a return on investment with positive unit economics. It will also help you ensure your startup reaches its break-even point.

The most common ways to monetize an application are :

• Advertising (this model allows you to monetize your apps by displaying advertising to users through app ad networks, which use algorithms to deliver high-quality ads in real-time)
• Charging for the application (if your business model describes a paid application, you need to convince the consumer why they have to pay and what they’re paying for)
• In-app purchases (this is a widespread mobile app business model in iOS and Android applications)
• Subscriptions (this model of monetization is quite popular as well; in most cases, subscription apps have a free trial period)

Break-even point analysis

The break-even point is when total cost and revenue are equal, indicating that your business will not lose or earn money. In other words, you've reached the point where development or manufacturing expenses match product revenue.

This is a critical calculation to include in a fresh app business plan. Potential investors want to know the expected return on their investment and when they will see that return. Some businesses might take years to earn a profit, often losing funds for the first few months or even years before breaking even. As a result, the break-even point is a critical component of every business plan given to a prospective investor.

This can be useful for established businesses to examine costs, estimate earnings at various sales levels, and demonstrate potential recovery after unexpected or disaster scenarios.

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How does mind studios help customers in creating a business plan.

At Mind Studios, we understand that a robust business plan for an app is crucial for the success of any software or mobile app project. The discovery process in software development is a critical initial phase that aims to thoroughly understand the project requirements, align stakeholders, and establish a solid foundation for subsequent development stages.

Our comprehensive discovery phase is designed to help clients create a business plan for a mobile app that is both detailed and effective. Here’s how we assist our clients through this process:

#1. Understanding the project scope

Stakeholder interviews : We engage with clients, end-users, and key stakeholders to gather in-depth insights into their needs, expectations, and pain points. This helps us understand the project’s vision and goals.

Market research : Our app development team conducts thorough market research to analyze competitors, identify industry trends, and uncover opportunities and threats. This research is essential for positioning the project effectively in the market.

#2. Defining requirements

Functional requirements : We work closely with clients to detail the software’s features and functionalities through user stories and use cases. This ensures that all necessary aspects of the project are captured.

Non-functional requirements : We define the quality attributes of the software, such as performance, security, and usability, to ensure a comprehensive understanding of the project’s requirements.

#3. User experience (UX) design

User persona creation : Our UX experts develop profiles representing key user groups, helping us understand user behaviors and needs.

User journey mapping : We visualize the steps users will take to achieve their goals within the software, identifying potential pain points and areas for improvement.

Wireframing and prototyping : We create low-fidelity wireframes and interactive prototypes to validate design concepts and ensure alignment with client expectations.

#4. Technical feasibility and architecture planning

Technical assessment : Our technical team evaluates the feasibility of proposed features, identifying potential challenges and risks.

Architecture design : We define the system architecture and select the appropriate technology stack, laying the groundwork for a scalable and robust solution.

#5. Project Planning

Project roadmap : We outline a detailed project timeline, including key milestones and deliverables, to ensure a clear path forward.

Resource allocation : Our project managers define the project team, allocate roles and responsibilities, and estimate the budget.

#6. Risk management

Risk Identification and analysis : We identify potential risks and analyze their impact, developing mitigation strategies to address them proactively.

#7. Creating documentation

Requirement and design documentation : We compile detailed functional and non-functional requirements, along with design documents.

Project plan : We create a comprehensive project plan that includes timelines, milestones, resource allocation, and risk management strategies.

#8. Validation and Approval

Review sessions : We conduct review sessions with stakeholders to present our findings, gather feedback, and refine the project scope and plans.

Approval : We obtain formal sign-off from stakeholders, ensuring everyone is aligned and ready to proceed to the development phase.

#9. Transition to development

Kick-off meeting : We align our development team with the project goals and plans, ensuring everyone is on the same page.

Setting up environments : We establish the necessary development environments and set up continuous integration pipelines to support efficient development.

Our thorough discovery phase ensures clients have a well-defined app business plan, setting the stage for a successful software or mobile app development project. Contact our business development team anytime if you need assistance crafting a comprehensive business plan that secures funding.

Business plan example for a mobile app startup

So, what exactly does a business plan for a mobile app look like? Below is an example of a business plan we created for demonstration purposes. So, if you want to know exactly how to write a business plan for an app, you can take a look at our example. Although this mobile app business plan follows all the rules, the calculations are entirely fictional and may not apply to your plan.

We also provide a mobile app marketing plan template to complement our business plan, ensuring a strategic approach to promoting your app in the competitive market. This template includes up-to-date techniques for 2024, guiding you through effective advertising and user engagement strategies.

Download the free PDF app business plan template for a mobile app here

No matter which one you decide to create, a pre-written mobile app business plan can help you seamlessly navigate through the development process with its four fundamental stages : discovery , idea validation , design , and actual development .

Writing a mobile app business plan, especially the first page, is challenging. Many beginner entrepreneurs rush to download a free business plan from another company, mistakenly believing someone else's business strategy will help them succeed. It won't!

A detailed business plan that describes your company and mobile app justifies the use of funds, and addresses legal issues can help you build stakeholder trust. At Mind Studios, we suggest reviewing your app's business plan annually. This will help you meet user needs and assess progress. Refreshing a business plan regularly helps you track startup finances while developing smart investment strategies. In short, this document adapts to your startup .

Last but not least, business plans cannot be copied. They must be unique and show your enthusiasm for implementing your idea. Ensure your business plan shows its viability and profitability, since higher viability means more investment potential.

Contact us for a consultation with our tech experts

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Mobile App Business Plan Template

Written by Dave Lavinsky

Mobile App Business Plan

Over the past 20+ years, we have helped over 5,000 entrepreneurs and business owners create business plans to start and grow their mobile app development company. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a mobile app business plan template step-by-step so you can create your plan today.

Download our Ultimate Mobile App Business Plan Template here >

What is a Mobile App Business Plan?

A business plan provides a snapshot of your mobile app as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for an App Company

If you’re looking to launch a mobile app or grow your existing mobile app you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your mobile app in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Source of Funding for Mobile App Companies

With regards to funding, the main sources of funding for a mobile app are personal savings, credit cards, bank loans, angel investors and venture capitalists. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a mobile app is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

Venture capitalists will also fund a mobile app and will take equity in return for their funding, VC funding generally comes after you’ve received initial proof of the mobile app concept or traction with your app.

Finish Your Business Plan Today!

How To Write a Business Plan For a Mobile App Development Company

A comprehensive business plan for an app company should include the 10 sections as follows:

Executive Summary

• Company Overview

Industry Analysis

Customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of app business you are operating and the status; for example, are you a startup, do you have a mobile app that you would like to grow, or do you already have several successful app businesses?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the mobile app industry. Discuss the type of mobile app you are operating. Detail your direct competitors. Give an overview of your target audience. Provide a snapshot of your marketing strategy. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company overview, you will provide a detailed description of your mobile app business.

For example, you might operate one of the following types:

• Business app : this type of mobile app generally helps increase productivity and/or decrease costs.
• Entertainment app : this type of mobile app includes news, social networking, music, video, etc.
• Lifestyle app : this type of mobile app includes things like fitness, shopping, dating, etc.
• Education app : this type of app must have the primary objective of advancing a user’s knowledge and overall breadth in a particular subject.
• Utility app : this type of app includes things like scanners, trackers, health-related apps, cell service providers, etc.
• Travel app : this type of app aids in planning and booking trips.
• Other app : there are a limitless number of areas in which a successful app could be created

In addition to the business description, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What is your company history?
• What is your mission statement?
• What is your business idea or app idea?
• What is your business model or monetization strategy (i.e., freemium, subscription, in-app purchases, affiliate marketing, crowdfunding, paid apps, sponsored content, etc.)?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

In your industry analysis, you need to provide an overview of your app development business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the mobile app industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards quiz apps, it would be helpful to ensure your plan incorporates gamification into your app.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section:

• How big is the app industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your mobile app? You can calculate this figure by multiplying the size of your target customer market by the amount they might spend per year on your app.

The customer analysis section must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: business operations managers, college students, sports enthusiasts, soccer moms, techies, teens, baby boomers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of mobile app you operate. Clearly, baby boomers would want different pricing and product options, and would respond to different user engagement strategies than teens.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the business types (if B2B), ages, genders, locations and income levels of the customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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With Growthink’s Ultimate Mobile App Business Plan Template you can finish your plan in just 8 hours or less!

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other app businesses in your niche.

Indirect competitors are other options that customers have to achieve similar results to what your app offers.

With regards to direct competition, you want to detail the other app development companies with which you compete. Most likely, your direct competitors will be mobile app businesses offering the same type of service or activity that yours does.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What products do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior features?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an app business, your marketing plan should include the following:

Product : in the product section, you should reiterate the type of mobile app that you documented in your Company Analysis. Then, detail the specific features of your app.

Price : Document how you will price your app and if there will be different pricing levels (e.g., free, entry, premium) and what those levels will be.

Place : Place refers to your distribution method. Document how customers can download your app (e.g., from your website, the Apple App Store, Google Play, etc.).

Promotions : the final part of your mobile app marketing plan is the promotions section. Here you will document how you will drive customers to your app(s). The following are some promotional methods you might consider:

• Social media marketing strategy
• Advertising in magazines, newspapers and/or trade journals
• Reaching out to local bloggers and websites
• Pay per click advertising

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your mobile app such as writing code, building upgrades, fixing bugs, providing customer service, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect your 10,000th app install, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.

To demonstrate your mobile app’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in app development business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory team. An advisory team would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in mobile apps and/or successfully running small businesses.

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you have 100 downloads per week or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your mobile application, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in an app startup or growing mobile app company:

• Cost of equipment like computers, data warehousing, etc.
• Payroll or salaries paid to staff and independent contractors
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.

Free Business Plan Template for a Mobile App Business

You can download our mobile app business plan PDF template . Our sample mobile app business plan would also be a helpful resource for writing your own business plan.

Mobile App Business Plan Summary

Putting together a business plan for a mobile app will improve your company’s chances of success. The process of developing your plan will help you better understand your target audience, your competition, and your business strategy. You will also develop the marketing strategies needed to better attract and serve your target market, an operations plan to focus your efforts, and financial projections that give you business goals to strive for and keep your company focused.

Growthink’s Ultimate Mobile App Business Plan Template allows you to quickly and easily complete your Mobile App Business Plan.  

Additional Resources for a Mobile App Startup

• How To Start a Mobile App Business
• How To Develop Your Mobile App Idea
• 20 App Marketing Strategies Proven For User Acquisition

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23 data to include in the business plan of your mobile app development project

This article was written by our expert who is surveying the industry and constantly updating the business plan for a mobile app .

Our business plan for a mobile app will help you build a profitable project

Ever pondered what the ideal user acquisition cost should be to ensure your mobile app remains competitive and profitable?

Or how many daily active users you need to maintain to achieve your revenue milestones?

And do you know the optimal retention rate for a subscription-based app to sustain growth?

These aren’t just interesting figures; they’re the metrics that can determine the success or failure of your app.

If you’re crafting a business plan, investors and venture capitalists will scrutinize these numbers to gauge your strategy and potential for success.

In this article, we’ll explore 23 critical data points every mobile app business plan should include to demonstrate your readiness and capability to thrive in the market.

User acquisition cost should ideally be below $1 per install to ensure scalability

A lot of hair salon businesses might not seem related to mobile apps, but they both need to keep costs low to grow effectively.

For a mobile app, keeping the user acquisition cost below $1 per install is crucial because it allows the app to scale without burning through its budget too quickly. If the cost is higher, the app might struggle to achieve a positive return on investment as it grows, which can limit its ability to expand and reach more users.

However, this ideal cost can vary depending on the app's target audience and the specific market it operates in.

For instance, apps targeting a niche market or offering a unique value proposition might justify a higher acquisition cost if they can ensure higher lifetime value from each user. On the other hand, apps in highly competitive markets might need to keep costs even lower to stand out and attract users effectively.

User retention rate should be at least 40% after 30 days to indicate strong engagement

Insiders often say that a user retention rate of at least 40% after 30 days is a strong indicator of engagement for a mobile app.

This benchmark suggests that users find the app valuable enough to return, which is crucial for sustained growth and profitability. A retention rate below this threshold might indicate issues with the app's user experience or content.

However, this 40% figure can vary depending on the app's category and target audience.

For instance, a gaming app might aim for higher retention rates due to the competitive nature of the industry, while a niche app serving a specific need might be satisfied with a slightly lower rate. Ultimately, understanding the specific context and goals of your app is key to interpreting retention metrics effectively.

An average app session length of 5-10 minutes is a sign of high user engagement

Most people overlook the fact that an average app session length of 5-10 minutes often indicates high user engagement .

This duration suggests that users find the app's content or functionality compelling enough to hold their attention for a significant period. It also implies that the app is providing value or entertainment that keeps users coming back.

However, the ideal session length can vary depending on the app's purpose and target audience.

For instance, a news app might aim for shorter sessions as users quickly catch up on headlines, while a gaming app might expect longer sessions as users get immersed in gameplay. Understanding these nuances helps developers tailor their strategies to optimize user experience and meet specific engagement goals.

Since we study it everyday, we understand the ins and outs of this industry, from essential data points to key ratios. Ready to take things further? Download our business plan for a mobile app for all the insights you need.

Push notification opt-in rates should be above 60% to maximize re-engagement opportunities

It's worth knowing that push notification opt-in rates above 60% are crucial for maximizing re-engagement opportunities in a mobile app.

When users opt-in to receive notifications, it allows the app to maintain a direct line of communication with them, which is essential for keeping them engaged. High opt-in rates mean that a larger portion of your user base is open to receiving updates, promotions, and reminders, which can significantly boost user retention and app usage.

However, the ideal opt-in rate can vary depending on the type of app and its target audience.

For instance, a news app might naturally have higher opt-in rates because users expect timely updates, whereas a gaming app might need to offer incentives to encourage opt-ins. Understanding your audience's preferences and tailoring your notification strategy accordingly can help you achieve and maintain that 60% benchmark, ensuring that your app remains a valuable part of your users' daily lives.

In-app purchase conversion rates should be at least 2-5% for freemium models to be profitable

Maybe you knew it already, but for a freemium mobile app to be profitable, in-app purchase conversion rates should ideally be between 2-5%.

This is because the freemium model relies on a small percentage of users making purchases to support the app's development and maintenance costs. If the conversion rate is below 2%, it becomes challenging to cover these costs, especially if the app has a large user base that doesn't contribute financially.

On the other hand, a conversion rate above 5% can indicate a highly engaged user base, which can lead to increased revenue and potential for growth.

However, these rates can vary depending on the app's target audience and market segment . For example, niche apps with a dedicated user base might achieve profitability with lower conversion rates, while apps in highly competitive markets may need higher rates to stand out and succeed.

Monthly active users (MAU) to daily active users (DAU) ratio should be around 20-30% to indicate healthy user activity

Believe it or not, the ratio of Monthly Active Users (MAU) to Daily Active Users (DAU) is a crucial metric for assessing the health of a mobile app.

A ratio of around 20-30% typically indicates that users are engaging with the app consistently, which is a sign of a healthy user base . This means that a significant portion of your monthly users are also using the app on a daily basis, suggesting that the app is integral to their routine .

However, this ratio can vary depending on the type of app and its intended use.

For instance, a social media app might have a higher DAU/MAU ratio because users tend to check in multiple times a day, while a utility app might have a lower ratio as it's used less frequently but still serves its purpose effectively. Ultimately, understanding the specific context of your app and its user behavior is key to interpreting this metric accurately.

An app's crash rate should be below 1% to ensure a smooth user experience

Experts say an app's crash rate should be below 1% to ensure a smooth user experience because frequent crashes can lead to user frustration and abandonment.

When an app crashes often, it disrupts the user's interaction, causing them to lose progress or data, which can be incredibly frustrating. This negative experience can lead to poor reviews and a decrease in user retention, ultimately affecting the app's reputation and revenue.

Maintaining a crash rate below 1% is considered a benchmark for quality, as it indicates that the app is stable and reliable for most users.

However, this threshold can vary depending on the app's complexity and user base. For instance, a simple app with basic functionality might be expected to have a much lower crash rate, while a more complex app with advanced features might be given a bit more leeway, though still striving to stay under the 1% mark.

Apps should aim for a break-even point within 12-18 months to be considered viable

Few hair salon businesses' success can be compared to the fast-paced world of mobile apps, where reaching a break-even point within 12-18 months is often seen as a benchmark for viability.

In the competitive app market, achieving this timeline indicates that the app has gained enough traction and user engagement to cover its initial development and marketing costs. This period is crucial because it reflects the app's ability to generate sustainable revenue and adapt to user needs.

However, this timeline can vary depending on the app's business model and target audience.

For instance, apps with a subscription-based model might take longer to reach break-even due to the time needed to build a loyal user base. On the other hand, apps that rely on in-app purchases or advertising might achieve this milestone more quickly if they can effectively monetize their user engagement.

An app's average rating should be above 4.0 on app stores to attract new users

Please, include that in your business plan. An app's average rating should be above 4.0 on app stores to attract new users because it serves as a quick indicator of quality and reliability.

When potential users browse app stores, they often use ratings as a filter to decide which apps to download, and a rating below 4.0 might suggest subpar performance or user dissatisfaction. A higher rating can also enhance trust and credibility , making users more likely to choose your app over competitors.

However, the importance of maintaining a high rating can vary depending on the app's category and target audience.

For instance, niche apps with a dedicated user base might not be as affected by a slightly lower rating, as their users may prioritize specific features over general appeal. On the other hand, apps in highly competitive categories, like games or social media, often need to maintain a rating above 4.0 to stand out and attract new users effectively.

Let our experience guide you with a business plan for a mobile app rich in data points and insights tailored for success in this field.

Feature adoption rate should be tracked, with key features seeing at least 50% usage among active users

A precious insight for you, tracking the feature adoption rate in a mobile app is crucial because it helps determine which features are truly valuable to users.

When key features see at least 50% usage among active users, it indicates that these features are meeting user needs and enhancing the app's overall value. This level of adoption can also signal that the app is intuitive and that users are finding it easy to discover and use these features.

However, the ideal adoption rate can vary depending on the app's purpose and the specific feature in question.

For instance, a social media app might expect higher adoption rates for messaging features, while a finance app might see lower rates for advanced analytics tools. Understanding these nuances helps developers focus on improving or promoting features that are underutilized, ensuring that the app continues to evolve in a way that aligns with user expectations and needs.

Churn rate should be below 5% monthly to maintain a stable user base

This is insider knowledge here, but keeping a churn rate below 5% monthly is crucial for maintaining a stable user base for a mobile app.

If your app is losing more than 5% of its users each month, it becomes challenging to sustain growth because you're constantly trying to replace those lost users. A high churn rate can lead to increased marketing costs and a focus on user acquisition rather than improving the app itself.

On the other hand, a churn rate below 5% indicates that users find value in your app and are likely to stick around, which is essential for long-term success.

However, the ideal churn rate can vary depending on the type of app and its target audience. For instance, a niche app with a dedicated user base might sustain a slightly higher churn rate, while a mass-market app should aim for even lower churn to remain competitive.

Apps should allocate 10-15% of their budget for continuous user testing and feedback integration

Most of the hair salon businesses' success hinges on understanding and adapting to customer needs, and mobile apps are no different.

Allocating 10-15% of the budget for continuous user testing and feedback integration ensures that the app remains user-centric and relevant. This investment helps in identifying pain points and areas for improvement, leading to a better user experience.

In the fast-paced world of mobile apps, user preferences and technology trends change rapidly, making it crucial to stay updated.

However, the percentage of budget allocation can vary depending on the app's complexity and target audience. For instance, a simple utility app might require less frequent updates compared to a social media platform that needs constant engagement and feature updates.

An app's load time should be under 2 seconds to prevent user drop-off

Not a very surprising fact, but an app's load time should be under 2 seconds to prevent user drop-off because users today expect instant access to information and services.

When an app takes longer than 2 seconds to load, users often become impatient and may abandon the app altogether. This is especially true in a world where attention spans are shorter, and users have numerous alternatives at their fingertips.

However, the ideal load time can vary depending on the type of app and its intended use.

For instance, a gaming app might be given a bit more leeway if users anticipate a rich, immersive experience that justifies a slightly longer load time. On the other hand, utility apps, like banking or weather apps, are expected to load almost instantly because users rely on them for quick, essential information .

Subscription-based apps should aim for a lifetime value (LTV) to customer acquisition cost (CAC) ratio of 3:1

This valuable insight suggests that subscription-based apps should aim for a lifetime value (LTV) to customer acquisition cost (CAC) ratio of 3:1 to ensure sustainable growth and profitability.

Essentially, this means that the revenue generated from a customer over their entire relationship with the app should be three times the cost of acquiring them. This ratio helps ensure that the app is not only covering its acquisition costs but also generating enough profit to reinvest in growth and improve the app's offerings.

However, this 3:1 ratio is not a one-size-fits-all solution and can vary depending on the app's specific market, competition, and business model.

For instance, apps in highly competitive markets might need a higher ratio to account for increased marketing expenses, while niche apps with less competition might be able to sustain a lower ratio. Additionally, apps with a high churn rate may need to focus on improving customer retention to achieve the desired LTV/CAC ratio, whereas apps with a strong brand loyalty might naturally maintain a healthy ratio.

Apps should reserve 5-10% of revenue for server and infrastructure maintenance annually

This insight suggests that apps should reserve 5-10% of revenue for server and infrastructure maintenance annually because it ensures the app remains reliable and efficient.

Regular maintenance is crucial to address security vulnerabilities and to keep up with technological advancements . By allocating a portion of revenue, app developers can ensure they have the resources to perform necessary updates and improvements.

The percentage of revenue reserved can vary depending on the complexity of the app and the volume of users .

For instance, apps with a large user base or those that handle sensitive data might require more frequent updates and thus a higher budget. Conversely, simpler apps with fewer users might manage with a smaller allocation.

With our extensive knowledge of key metrics and ratios, we’ve created a business plan for a mobile app that’s ready to help you succeed. Interested?

Effective app store optimization (ASO) can increase organic downloads by 20-30%

This data does not come as a surprise.

Effective app store optimization (ASO) involves enhancing various elements of an app's listing, such as the app title , keywords , and visual assets , to improve its visibility in the app store. By optimizing these elements, an app can rank higher in search results, making it more likely for users to discover and download it.

When an app is more visible, it naturally attracts more organic downloads, which can lead to a 20-30% increase in downloads.

However, the impact of ASO can vary depending on factors like the app's category and the level of competition within that category. For instance, an app in a highly competitive category might see a smaller percentage increase compared to an app in a niche category, where optimization efforts can have a more pronounced effect.

A successful app should have a feature update cycle of 4-6 weeks to keep users engaged

Yes, a successful app should have a feature update cycle of 4-6 weeks to keep users engaged.

Regular updates show that the app is actively maintained, which builds trust and reliability among users. This frequency also allows developers to respond to user feedback and fix any issues promptly, enhancing the overall user experience.

However, the ideal update cycle can vary depending on the app's nature and target audience.

For instance, a gaming app might need more frequent updates to introduce new levels or events, while a utility app might focus on stability and performance improvements. Ultimately, the key is to balance between introducing new features and maintaining the app's core functionality, ensuring that updates are meaningful and not just for the sake of change.

Apps should aim for a 20-30% increase in average revenue per user (ARPU) year-over-year

Did you know that apps should aim for a 20-30% increase in average revenue per user (ARPU) year-over-year?

This target is crucial because it reflects the app's ability to not only retain users but also to monetize them effectively . By focusing on ARPU growth, app developers can ensure that their app remains financially sustainable and competitive in a rapidly evolving market.

However, the ideal ARPU growth rate can vary depending on the app's specific niche and business model.

For instance, subscription-based apps might see a more consistent ARPU increase due to recurring revenue, while gaming apps could experience fluctuations based on in-app purchases and seasonal trends. Ultimately, understanding the unique dynamics of your app's market and user base is key to setting realistic and achievable growth targets .

An app's user interface (UI) should be intuitive enough to require no more than 3 taps to reach any primary feature

This data suggests that an app's user interface (UI) should be intuitive enough to require no more than 3 taps to reach any primary feature because it enhances the overall user experience by making navigation quick and efficient.

Mobile users often seek immediate access to features due to the nature of on-the-go usage, and a streamlined UI helps in achieving this. If users have to tap through multiple screens, they may become frustrated and abandon the app, leading to a higher churn rate .

By limiting the number of taps, developers ensure that users can easily find and use the app's core functionalities, which is crucial for maintaining user engagement.

However, this guideline can vary depending on the complexity of the app and its target audience. For instance, a professional-grade app with advanced features might require more taps, but it should still strive to keep navigation as simple as possible to avoid overwhelming users.

Apps in competitive markets should allocate 15-20% of revenue for digital marketing and user acquisition

This data point suggests that apps in competitive markets should allocate 15-20% of revenue for digital marketing and user acquisition because it is crucial for maintaining visibility and growth in a crowded space.

In highly competitive markets, there are numerous apps vying for the attention of the same user base, making it essential to invest in effective marketing strategies to stand out. Allocating a significant portion of revenue to marketing helps ensure that the app can reach a wider audience and attract new users, which is vital for sustaining growth and staying ahead of competitors.

However, this percentage can vary depending on factors such as the app's stage of development and the specific market dynamics.

For instance, a newly launched app might need to spend more aggressively on marketing to build initial awareness and user base, while a more established app with a loyal user base might focus on retention strategies and spend less on acquisition. Additionally, apps in less competitive markets might not need to allocate as much to marketing, allowing them to invest more in other areas like product development or customer support.

Seasonal promotions can boost in-app purchases by up to 25%

Actually, seasonal promotions can boost in-app purchases by up to 25% because they tap into the excitement and urgency associated with specific times of the year.

During holidays or special events, users are often in a spending mood, making them more likely to engage with promotional offers. These promotions can create a sense of limited-time opportunity , encouraging users to make purchases they might otherwise postpone.

However, the effectiveness of these promotions can vary depending on the app's target audience and the nature of the promotion itself.

For instance, a gaming app might see a higher increase in purchases during a holiday-themed event, while a productivity app might benefit more from back-to-school promotions. Ultimately, the key is to align the promotion with the user's interests and the seasonal context to maximize its impact.

Prepare a rock-solid presentation with our business plan for a mobile app , designed to meet the standards of banks and investors alike.

Establishing a bug fix turnaround time of less than 48 hours is a sign of strong technical management

It's very common for a mobile app to encounter bugs, and fixing them quickly is crucial for maintaining user satisfaction.

A bug fix turnaround time of less than 48 hours demonstrates strong technical management because it shows that the team is both efficient and responsive . This quick response time helps in minimizing the negative impact on users and ensures that the app remains reliable and trustworthy.

However, the ability to fix bugs within this timeframe can vary depending on the complexity of the issue .

For instance, a minor UI glitch might be resolved quickly, while a more complex issue involving backend systems could take longer. Additionally, the size and resources of the development team can also affect how quickly they can address and fix bugs.

Apps should maintain a current ratio (assets to liabilities) of 1.5:1 to ensure financial health.

A lot of mobile app developers aim to maintain a current ratio of 1.5:1 to ensure their app's financial health.

This ratio means that for every dollar of liabilities, the app has $1.50 in assets, providing a cushion to cover short-term obligations. By maintaining this ratio, apps can better manage unexpected expenses and ensure they have enough resources to invest in future growth opportunities .

However, the ideal current ratio can vary depending on the app's specific business model and industry.

For instance, a subscription-based app with steady cash flow might operate comfortably with a lower ratio, as it can rely on regular income to cover liabilities. On the other hand, an app in a highly competitive market might need a higher ratio to ensure it can quickly adapt to market changes and invest in innovation .

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