Mobile App Business Plan
If you have a mobile app startup or want to expand your current mobile app business, you clearly need a business plan.
The following mobile app business plan template and example give you the key elements to include in a winning plan.
Mobile App Business Plan Example
I. Executive Summary
Business Overview
[Company Name], headquartered at [insert location here] is a creative mobile application that helps you find restaurants, culinary events and other cool foodie gatherings. It’s a unique guide based on recommendations from chefs and sommeliers. Recommendations range from special occasion restaurants to neighborhood dive bars to high-end farmer’s markets.
Products and Services
[Company Name] will offer a wide variety of insider recommendations from the food industry’s most trustworthy chefs, sommeliers, writers, restaurateur, bartenders and food artisans. Recommendation include:
- Restaurants
- Bars
- Grocery Stores
- Farmer’s Markets
- Meat and Seafood Shops
- Delis
- Bakeries
- Coffee
- Recipes
Customer Focus
[Company Name] will primarily target smartphone savvy people and those who enjoy food & wine. The demographics of these customers are as follows:
- Aged 18-29
- Average income of $54,700
- 28.9% married
- 39.6% in Management/Professional occupations
Management Team
[Company Name] is led by [Founder’s Name] who has been in the mobile application business for 10 years. While [Founder] has never run a mobile application himself, he was previously director of strategic development for mobile app company devoted to food. As such [Founder] has an in-depth knowledge of the business as well as the needs of foodies, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is uniquely qualified to succeed for the following reasons:
- There is currently no food app devoted to foodies and their specific interests and needs. In addition, we have surveyed publishers of appropriate content and received extremely positive feedback saying that they explicitly want to sell their work through our business when launched.
- The management team has a track record of success in the mobile applications and food business.
- The mobile applications business is a proven business and has succeeded throughout the world.
- Market trends, such as the growth in smartphone users and mobile app downloads prove very favorable to [Company Name]
Financial Highlights
[Company Name] is seeking a total funding of $1.25 million to launch its business. The capital will be used for include further app development, marketing collateral, website development and working capital.
Specifically, these funds will be used as follows:
| App Development | $240,000 |
| Online & Offline Marketing | $570,000 |
| Headcount | $150,000 |
| Operating Expenses | $135,000 |
| Working Capital Cushion | $150,000 |
| TOTAL INITIAL FUNDING | $1,245,000 |
Top line projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Total Revenues | $5,402 | $24,436 | $90,504 | $416,920 | $1,370,767 |
| Total Direct Cost | ($810) | ($3,665) | ($13,576) | ($62,538) | ($205,615) |
| Gross profit | $4,592 | $20,771 | $76,928 | $354,382 | $1,165,152 |
| Gross Profit Margin (%) | 85% | 85% | 85% | 85% | 85% |
| Total Operating Expenses | ($537,150) | ($964,983) | ($1,349,453) | ($1,606,790) | ($1,733,423) |
| EBITDA | ($532,558) | ($944,212) | ($1,272,524) | ($1,252,408) | ($568,271) |
| Depreciation | $0 | $0 | ($5,000) | ($5,000) | ($5,000) |
| Amortization & Impairment | $0 | $0 | $0 | $0 | $0 |
| EBIT | ($532,558) | ($944,212) | ($1,277,524) | ($1,257,408) | ($573,271) |
| Pretax Income | ($532,558) | ($944,212) | ($1,277,524) | ($1,257,408) | ($573,271) |
| Income Tax Expense | $0 | $0 | $0 | $0 | $0 |
| Net Income | ($532,558) | ($944,212) | ($1,277,524) | ($1,257,408) | ($573,271) |
| Net profit (%) | -9858% | -3864% | -1412% | -302% | -42% |
II. Company Overview
Who is [Company Name]?
[Company Name], headquartered at [insert location here] is a creative mobile application that helps you find restaurants, culinary events and other cool foodie gatherings. It’s a unique guide based on eating, drinking and other recommendations from chefs and sommeliers. Recommendations range from special occasion restaurants to neighborhood dive bars to high-end farmer’s markets.
[Company Name] will offer a wide variety of insider recommendations from the food industry’s most trustworthy chefs, sommeliers, writers, restaurateur, bartenders and food artisans. Recommendation include:
- Restaurants
- Bars
- Grocery Stores
- Farmer’s Markets
- Meat and Seafood Shops
- Delis
- Bakeries
- Coffee
[Company Name] is led by [Founder’s Name] who has been in the mobile application business for 10 years. While [Founder] has never run a mobile application himself, he was previously director of strategic development for mobile app company devoted to food. As such [Founder] has an in-depth knowledge of the business as well as the needs of foodies, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
It was apparent to [Founder’s Name] that an unserved market need existed for the product. Furthermore, after surveying publishers of content, this theory was proven.
[Company Name]’s History
After surveying publishers of mobile applications, chefs, restaurateur and sommeliers, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
[Founder’s Name] has selected a technology director with project management experience in the development of mobile applications.
Since incorporation, the company has achieved the following milestones:
- Developed the company’s name, logo and placeholder website located at www…
- Determined the list of products to be offered
- Determined equipment and development requirements
- Identified three potential mobile application development companies and solicited proposals from them
[Company Name]’s Products
Recommendation include:
- Restaurants
- Bars
- Grocery Stores
- Farmer’s Markets
- Meat and Seafood Shops
- Delis
- Bakeries
- Coffee
Below is [Company Name]’s initial product list. As you can see all items are classified under the following main categories:
- Recommendations- Includes the following categories: Restaurants, Bars, Grocery Stores, Farmer’s Markets, Meat and Seafood Shops, Delis, Bakeries and Coffee
- Industry News – Includes press releases, news articles and announcements
- Recipes – includes industry insiders’ top recipes
- Original Content – Articles and blog for [Company Name]
Technology Platform
[Company Name] will be built for iPhone and Android. Its modern, flat design has been optimized for iOS7. Other features include:
- Powerful resting API
- Security
- Full social network capabilities
- Push notifications
- Real-time chat, sharing map location and voice messaging
III. Industry Analysis
[Company Name] directly or indirectly competes with all mobile applications. Direct competition will come from companies offering free and paid mobile applications, similar to [Company Name].
Industry Statistics & Trends
The following industry size facts and statistics bode well for [Company Name].
- The smartphone app development industry in the U.S. will reach an estimated $9.7 billion in revenues this year.
- Industry developers have capitalized on the smartphone’s rise over the last five years and quickly produced gaming, entertainment, productivity, and social apps to support U.S. consumers’ increasingly smartphone-centric lifestyles. This year, an estimated 138.8 billion app downloads worldwide will take place. Today, the Apple App Store (iOS) offers over 1.2 million apps, while Google Play (Android) houses over 1 million.
- Free downloads are expected to account for 95.5% of total downloads. According to Gartner, in-app purchases are expected to account for 48.2% of total mobile app store revenue Revenue from advertising is also expected to increase significantly.
- Key drivers include: Number of Mobile Devices, % Services Conducted Online, and E-Commerce Activity.
IV. Customer Analysis
[Company Name] will primarily target smartphone savvy people in two primary age groups: 18-29 and 30-49.
The largest share of mobile app industry revenue is generated from consumers between 18 and 29. Consumers in this age group tend to be the most technologically savvy, have the highest smartphone penetration rate and have the greatest comfort purchasing online.
Consumers aged 30 to 49 are estimated to represent 45% of the market. A growing segment, more lifestyle, tools and productivity apps are being developed to cater to this market, as it typically has significantly higher income than consumers age 18 to 29.
V. Competitive Analysis
Direct & Indirect Competitors
The following are expected to be the key competitors for [Company Name] due to their current brand and resources:
Tastemade
Tastemade is an app for the food lover who also loves to travel. Through a network of “Tastemakers” in 22 cities around the world, Tastemade offers short, one or two-minute videos showcasing the coolest places for food lovers. You can also use the app to make your own videos during your travels and creates lists of the places you’ve been and want to see.
Local Eats
Local Eats doesn’t list every restaurant possible. Instead, it focuses on the best of the bunch with editors considering ratings from magazines, newspapers, and dining sites to work out what should be suggested. Its curated list manner means you don’t have to work your way through the poor restaurants to get to the good. The app focuses on local restaurants too rather than including national chains.
Restaurant Finder
Restaurant Finder doesn’t stop at covering the USA and Canada, with plenty of restaurants to find across Europe, as well as Australia, Brazil, Malaysia, and other countries. In each case, it’s easy to find places near your location, plus there are extensive reviews for them all, ensuring you can always find somewhere tasty to eat locally. It’ll even give you the heads-up on nearby grocery stores if there aren’t any convenient restaurants or bars near.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Niche Market Focus:By serving the niche market of foodies, [Company Name] will be able to focus its products and content on the needs of these customers more so than larger, entrenched competitors.
- Relationships: [Founder’s Name] and the technology director know many of the best programmers and mobile application development companies. As such, it will be relatively easy for us to build the app’s functionality.
VI. Marketing Plan
The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Offering a wide variety of food-focused material for app users
- Making the experience of dining and cooking fun and easy
- Providing excellent customer service, with dedicated customer service representatives
Promotions Strategy
The Company’s promotions strategy to reach the target market of foodies includes:
Public Relations
We will contact food magazines, food sections of newspapers, and television stations and send them a press release describing the opening and unique value proposition of [Company Name].
Search Engine Optimization
The Company will develop its website in such a manner as to direct as much traffic from search engines as possible. The original website designer will use knowledge of search engine optimization to orient the website’s content towards this end and begin a program of link exchange to move up the search engine rankings (particularly Google). Ongoing search engine optimization of this type will be executed by an experienced SEO firm contracted on a monthly basis.
Pay-Per Click Advertising
Additionally, [Company Name] will use highly-focused, specific keywords to draw traffic to its website through text pay-per click advertising on Google Ads and banner ads on other appropriate websites (brokered by Google or another ad placement company). Advertisements will be targeted at potential clients who will find our content-rich site to be a valid resource and applicable to their interests, rather than an interruption or distraction.
Email Marketing
[Company Name] will publish a monthly email newsletter to tell customers about trends in food and offer other articles and columns of interest to customers. Email addresses will be gathered from users who opt-in when using the website and the email newsletters will support the brand of the site as an expert in food-related recommendations. In addition, emails presenting exciting new offers or products may be sent as often as once a week to customers who have opted-in to keep them informed of the latest information on the website.
Print Advertising
[Company Name] will initially advertise in food magazines and newspaper food sections in order to gain awareness.
Pricing Strategy
[Company Name] pricing will be appropriate for the marketplace. That is, they will be priced similar to other mobile applications with similar offerings.
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing suppliers of content and managing supplier relations
- Hiring and training staff
Mobile Application Functions
- Developing additional application features
- Application maintenance, updates, and bug-fixing
- Ongoing search engine optimization
Service Functions
- Customer service
- Writing and producing content for the application
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize mobile application development contract |
| [Date 2] | Complete prototype design of mobile application |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Launch [Company Name]mobile application |
| [Date 5] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name] who has been in the mobile application business for 10 years. While [Founder] has never run a mobile application himself, he was director of strategic development for a mobile application. As such [Founder] has an in-depth knowledge of the mobile application business as well as the needs of foodies, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
[Founder] graduated from the University of ABC where he majored in Business.
The technology director, [Tech Director Name], has 15 years of web development management experience. He has experience managing mobile application developments. He received an MBA in Business Information Systems from XYZ College.
Hiring Plan
In order to launch the store, we need to hire the following personnel:
- Sourcing Assistants (2 – responsible for finding content and making deals with content providers)
- Customer Service Representatives (2– responsible for fielding emails and calls from customers about potential, current, and past orders).
- Part-Time Bookkeeper (1 – will manage accounts payable, create statements, and execute other administrative functions)
At a future date, the following staff will be added:
- Programmer (1 – to be hired in the second year of operation, will work under the technology director implementing new developments and bug fixes on the website. Before this time, programming services will be on a contract basis).
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sale of upgraded mobile application offerings, business listing fees and in-app advertisements.
The major costs for the company will be cost of goods sold (license fees and royalties to suppliers, internet connection fees, etc) and salaries of the staff. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name is seeking a total funding of $1.25 million to launch its business. The capital will be used for include further app development, marketing collateral, website development and working capital.
Specifically, these funds will be used as follows:
| App Development | $240,000 |
| Online & Offline Marketing | $570,000 |
| Salaries | $150,000 |
| Operating Expenses | $135,000 |
| Working Capital | $150,000 |
| TOTAL INITIAL FUNDING | $1,245,000 |
Key Assumptions & Forecasts
Below please find the key assumptions that went into the financial forecast.
| Average New Downloads per Month | Annual New Downloads | Annual Active App Users | |
|---|---|---|---|
| Year 1 | 140,405 | 1,684,857 | 842,428 |
| Year 2 | 1,489,943 | 17,879,321 | 9,782,089 |
| Year 3 | 3,317,811 | 39,813,727 | 29,688,953 |
| Year 4 | 5,224,927 | 62,699,123 | 61,038,514 |
| Year 5 | 6,547,008 | 78,564,095 | 100,320,562 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
