Reinvesting in your Mobile App Business

Keep Doing What Works

What should you do with your mobile app profits? This came up earlier while discussing issues on breaking even. Clearly, once you’ve actually made a profit, you’re all set, right? No. When you find things that work you need to keep doing them until you find something better.

Too frequently, people who do have a good thing going stop. Sometimes they think the money they made earlier will keep rolling in at the same rate. Other times, they stop their current advertising program to experiment with other programs. Experimentation is good, but it needs to be vetted before completely shutting down other revenue streams. Sometimes, it is simple burn-out. It could be any number of things.

With any business, however small, you want two things – a vision of where you want to take it, and an exit plan. We’ll leave exit plans for future discussion. Your vision is especially important as it will decide a lot of issues for you. It’s one thing if you intend for your mobile app development to be a sort of a “hobby with benefits”, another if you want it to be your primary source of income supporting a comfortable lifestyle, and something totally different if you aim for it become a multi-million dollar business.

Most of the processes are the same; it is only the intensity of effort that varies.

Three Focal Points –  Most mobile app developers don’t have to worry significantly about shipping and handling, product packaging, storage or physical inventory. This eliminates a large portion of operational considerations leaving you to focus on basically three things:

  1. Mobile App & Product (or Service) Development
  2. Mobile App Sales and Marketing
  3. Improving your Revenue and Business Model

Simply, if you are looking to make money in mobile app development on a sustained basis, you want to keep producing high quality apps, marketing them and finding more/new/better ways of monetizing them while reducing costs. These mostly speak for themselves.

Improving Business Model – The third is the most important of the three. This is the mechanism that will help take you from relying upon in-app advertisements for your free app revenue to a variety of potentially much more lucrative arrangements using your revenue to:

  • add in-app payment modules
  • build or improve upon your mobile friendly web site and storefront
  • spend time networking with other compatible businesses on sponsorships, joint marketing initiatives or simple cross promotions, or commissions on referrals
  • add a new member to your team who has strategic skill sets that you need
  • add development capabilities across more platforms or utilizing new technologies (training, software purchases, etc.)

Continue Advertising – These are just some of the ways of reinvesting into your business, but throughout the entire process, you want to keep advertising your apps for as long as doing so is profitable. If for every $1.00 you spend on advertising, you were guaranteed to make $1.10 every 30 days, there’s no reason to stop that. One would be hard pressed to find a bank paying 10% interest over a year, say nothing about monthly.

Remember the Law of 72. This is your doubling rate – 72 divided by your interest rate. If you are consistently getting $ 1.10 on every dollar of adspend, that is 10% – meaning you are doubling your money every 7.2 MONTHS (not years).

There will be fluctuations, but as long as you have your thumb on the pulse of your adspend, you will be able to take prompt corrective action when variances start creeping in. It is always said that, “Past performance is not a guarantee of future results.” If you treat advertising like it is your lifeblood – always engaged, constantly testing, always seeking to get a 1% better return on any of your KPI’s, you will be kicking butt the majority of the time.

Continuing work in developing great apps is a given, of course. Releasing a bad app is bad for business, but by this stage you already know that.


Project Manager at the Opera Mobile Store providing Sales-Marketing support. Content development and research.

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