With so many apps hitting the Google Play and iOS App stores every day, and some of them making their creators really rich, more and more people are getting interested in breaking into the market and taking a fair share of the app users. Numerous success stories hit the headlines, so most startups sincerely believe it’s pretty easy to become successful and earn a lot of money. But is this really so? In this detailed guide, the experts of LITSLINK are sharing some secrets on how to start a mobile business that will succeed.
Step #1: Business starts with an idea
When you are thinking of establishing an app startup, you might already have an idea in mind what application you want to offer your users. If not, try to think of what you don’t like about the apps you are currently using and how you would improve them. Thus, you can find some inspiration for your future hit application. You need to clarify the focus of your new venture before starting your product.
It is essential to formulate a clear idea because you need to think about your brand and reputation in the long run. Be it a fitness app or a maternity application – your users should recognize it by its name. Moreover, the clear idea of your future app gives you a perfect opportunity to save time and money investments in further steps of starting an app business. With thousands of applications currently available in iOS apps and Google Play market, you can’t research every niche; it’s simply too lengthy and too costly.
Step #2: Market research
Market research is crucial for creating an app.
This simple exercise will give you valuable insight into what’s already present in the market, what it lacks, and what apps failed or became a huge success. Here are some things to focus on during the market research stage.
Find Your Competitors
- You can’t create your own app if you do not have any idea what applications are out there in your niche.
- Proceeding to app creation without a thorough competitor analysis is dangerous as there is always a risk to invest a heap of money into a duplicate of an existing app. Or you can easily make an app quite similar to the one that recently failed in the market. Knowing your competitors allows you to learn from their mistakes and do something better, something different – which is a serious competitive advantage to an app’s success.
See Which Methods Work and Which Don’t
When starting your own app business, you are always at an advantage as compared to those who have already launched their applications – you can analyze others’ experience to see what works and what doesn’t. By holding a simple comparison of failing and successful apps in one particular niche, you can always refine your business idea and maximize the chances for market success. Study some Android app ideas by analyzing success stories or focus on the iOS app successes, and soon you will come up with a workable app business plan.
Find Out Who Your Audience Is
Being crystal clear about your target audience is also an essential step towards making your app popular in the market. Marketing is very customized today with unique appeals directed towards narrowly formulated and carefully selected target users. Thus, you will also be able to cause an emotional response from your target audience if you know it well and understand what pain or problem you can resolve with the new app. Here are a few examples to make things simple:
- If you create a health and fitness app for youths, you’ll most probably focus on some fancy connectivity tracking like making social groups or competitions, incorporating some messaging features, social shares of results, etc. If your app targets an older audience, here the functionality is key, with rigorous calorie and activity tracking.
- If you wish to launch a new content/social/entertainment app, make its functionality as easy as possible for the young generation. If it is a news/entertainment app for middle-aged users, the utility is what they are most focused on, with the features of content filtering, availability of numerous news and content channels, etc.
Step #3: Platform Choice
When you start an app business and create a mobile application, the next vital step is to choose the platform on which you wish to run your product. Overall, the number of platforms is large — Android, iOS, Windows, Blackberry, Symbian are the most popular ones, but market statistics and user trends speak in favor of considering only iOS and Android seriously as only these two platforms can reap you monetary benefits and sufficient exposure to large user groups.
Having your app available at App Store and Google Play is quite different. Though Google Play is still an indisputable leader in terms of annual app downloads, the App Store leads in annual revenues of app providers. That’s probably attributable to the fact that all apps at App Store are paid, while Android developers provide many apps for free, with some advanced premium options available for an additional cost.
If you opt to run the app on both platforms, it may be a good solution for you to diversify your market presence and gain a wide audience among both iOS and Android users. Keep in mind that this option is twice as costly as you will need to run marketing campaigns for these platforms separately, pay for your app’s presence on both platforms, etc.
Step #4:Finding a Development Team
Many people are starting a mobile app business without any software experience, and that’s absolutely fine as they can always hire an external provider for this aspect of the app development business. As soon as you get to this stage, you need to clarify what mode of collaboration fits you most. At present, the most popular software development hiring models include:
- Hiring freelancers (individuals or teams). This option is the cheapest as offshore (and even local) freelancers usually have lower rates than an in-house team or a software development company. However, such a mode of collaboration is connected with some inherent risks, such as the loss of control, the need to share some private corporate data with people you don’t know personally and you can’t be fully sure in their integrity. Besides, clients often come across quality issues and have to pay twice to have decent work done. So, hiring a freelancer is a good idea only in cases when the amount of work is small, the project is short-term, you are on a tight budget and can’t afford other options, and you have a manager who will work closely with the freelancer to keep the progress and work quality under control.
- Hiring in-house programmer teams. The option is the best one in terms of quality and control over the process. In-house team members work full-time, they are only devoted to your projects, and have contractual obligations to keep the sensitive corporate data private. Nevertheless, this hiring model is the most expensive as you will need to sign an official contract with all developers, provide them with office space and equipment, pay all taxes and provide them with social package perks, etc. Thus, the model is workable for large companies that need skilled developers for long-term projects.
- Outstaffing software development. The outstaffing model is somewhere in the middle of the outsourcing and in-house team options. It presupposes hiring a team of developers offshore with the help of an intermediary vendor who will provide your team with office space, equipment, official employment, and other l perks. The model is optimal for companies wishing to cut the costs of hiring the local developers but at the same time wishing to preserve control over the work process and make sure that their offshore team works only on their projects.
- Collaborating with a dev team. Finally, you can opt for hiring a software development company that will provide you with a dev team suiting your needs and will become your partner in the business of apps. In such a way, you save a great portion of costs otherwise required to finance the app development process. Still, you will need to share a part of the future revenue that the app will bring.
Step #5: Business Plan
To make sure that your app will succeed you need to have a sound business plan.
Why Do You Need It?
Any business plan is about careful strategic planning. It includes all details about timelines, expenditures, and the development dynamics that allow you to understand how to start an app business and how much exactly it will cost. Besides, having a clear business plan helps reduce major risks, attract investment, prepare for the app launch properly, manage, and delegate tasks effectively.
What Should It Include?
- How to make a business plan for an app? While the contents of your business plan will vary depending on the complexity and purpose of your application, the most common aspects covered in such documentation should include:
- The type of app
- The app’s unique features and USPs
- Market analysis and projected marketing costs
- Projections of revenues, profit and loss statements
- Cash flow estimations
- Ideas for a marketing campaign
Short-term or Long-term Planning?
Any business requires both the short- and long-term planning as you can’t move on blindly and invest your money, effort, and time in something vague and ambiguous. The short-term planning should involve the detailed business plans covering the next year with the key issues, such as the app’s main idea, key development steps, the budget needed for the development, and possible ways of its monetization.
The long-term planning covers about 1-5 years of the app’s future in the market. It is also a critical tool for attracting investment as it envisions your app, its market prospects, and the financial side of its development, launch, marketing, and maintenance. Key sections that a long-term business plan should have, include:
- Company description
- Market analysis
- Marketing strategy
- Competitor analysis
- Startup costs and funding needs
- Options of monetization strategies
Step #6: Investments
How to start an app without money? Is a good idea enough? In some cases, yes, but for the most part, you need to think of the ways which can bring you money Here are some ways of engaging people into your startup and getting funds from them to move on.
Ways to Get Money for Your App
Among many app financing opportunities, you can think of paying for the app on your own. This scenario is suitable for those entrepreneurs who can spend from $10,000 to $250,000 for such a project. Otherwise, you can consider the following investment options:
- Taking a loan;
- Finding a partner.
Where to Find Investors?
In terms of crowdfunding, the most popular platforms include Kickstarter, Indiegogo, Patreon, GoFundMe, Crowdrise, and the like. Here you can publish your project and indicate the sum of money you need to bring it to life. If you opt for finding a private investor, then AngelList or Crunchbase may become your great starting points in this endeavor.
If you don’t wish to rely on other people’s favors and prefer to maintain the full ownership of your project, then it may be a good idea to turn to a bank for a loan. Getting a bank loan is harder than crowdfunding, especially if you have no positive credit history or are a startup without any bank record. But getting it guarantees that you remain the boss, continuing the project on your terms.
Step #7: Building a Prototype
When you start a mobile app business, it’s better to take care of the preliminary market testing in order not to lose too much money on the full-scale launch of a wrong app. That’s when the creation of a prototype comes in handy.
Why do you need it?
While an app can cost somewhere between $10,000 and $250,000, a great prototype will cost only $2,000-$8,000. By launching it, you give users a chance to test your idea and who will provide you with some valuable feedback for its improvement. Based on that feedback, you’ll know for sure that the app is demanded in the market and will be clear about what the users want from it.
The choice of the prototype depends on your app’s features, purpose, and your budget for it. You can choose among feasibility, horizontal, rapid, and vertical prototypes, as well as some simpler versions such as animations, wireframes, storyboards, or simulations.
How to Test It?
It’s better to present the prototype to your team first, then disperse it to a wider target audience. After the initial testing, you can offer a series of questions for them to respond and leave feedback on the prototype. At this stage, it is critical to ask the right questions and give an exhaustive set of response variants for the feedback to be precise and valuable.
The most common method of soliciting feedback is the “I Like, I Wish, What If” structure; it allows getting informative responses without too much negativity. For instance, instead of saying “I don’t like the colors,” a respondent is urged to formulate the response like, “I wish the colors were less bright in the app’s design” or ‘I wish the color scheme is lighter.” The structure also urges the users to indicate the app’s strong sides in the “I like…” parts even if they generally did not like it.
Step #8: Selecting Monetization Model
The mobile app business opportunities are abundant today, offering a great number of monetization alternatives to let you get rich even with a free app. However, it’s better to determine your monetization strategy in advance, before your app hits the market. Here are some options to consider.
Paid or free?
You can start a mobile app startup with a free application and still become successful. So, no matter whether you choose to launch a paid or free app, you can earn on both. However, if you still prefer to opt for a paid one, make sure it is perfect as the competition is fierce in the market. A lot of companies provide even free apps with a great number of useful features, so for a user to pay money for an app, he or she should fall in love with it.
Ways of Monetization
Free apps are monetized in several ways, some of which include the incorporation of advertisements and in-app purchases, direct selling strategies, and pro-versions or freemiums.
Step #9: App Marketing
Business start-up applications mostly succeed at the marketing stage. In the conditions of abundance of app offers, your product risks sinking into oblivion if nobody knows about it. Thus, it’s necessary to prepare a comprehensive marketing campaign to let the users know about the novelty — try it, buy it, and recommend it to friends.
Ways of Advertising
You can promote your app in different ways – everybody is online today, so appealing to your users via different online channels is the best marketing strategy. For instance, social media promotion is the most promising approach, with official pages of the app on all social media platforms with some influencers’ promotional posts about it. It’s also good to have the official website of the app for potential clients to attend and review the app’s key features. For a complete outreach, consider placing links to your app in blogs, reviews, include it into TOP lists, etc.
Marketing can be really costly, but it mostly pays off. Create a budget for Facebook and Instagram ads, commercial guest posts, promo links, etc., and conduct regular analysis of what works and what doesn’t. That data will allow you to correct the marketing plan to maximize your ROI.
Step #10: Never Stop Improving
Even if your app is successful in the market on the first day, it’s not time to relax. Users are always waiting for valuable updates that fix minor bugs, add functionality and features based on the user feedback, and generally make the user experience even better.
As you can see, the process of building and launching an app is a long and rocky path. It pays off and ends in the product’s success in case you follow all steps of the process, such as formulating the app’s idea, conducting preliminary market research to identify competitors and the target audience, and crafting a detailed business plan followed by the development team’s recruitment. It’s critical to find investors, to develop several monetization strategies, and to build the prototype before spending huge sums on the full-scale app creation. But even these steps are not the culmination of your app launch; the app business is a never-ending story, continuing with app updates and improvements to keep the loyal clientele and improve the user experience.