Setting up a Five Year Mobile App Development Business Plan — Part 1 (Version 1.0)

App Development business planThis is intended to be a work in progress, aiming at a comprehensive itemization of the components and tasks in creating a five year business plan for mobile app development. This will involve more than one post.

It is necessary to draw attention to the Pareto Principle in that:

  • About 20% of your efforts will account for 80% of your revenue.
  • Most of what you do as a developer (80%) generates little to no revenue (20%).

You can develop today, tomorrow, and forever — but without marketing, sales, and public relations, not to mention several aspects of business development, you will make little to no money.

For as many items as are listed here, there are likely to be dozens more. My intention is to update this list as those items are defined. Nevertheless, I feel this is more than sufficient to provide a good overview of what is involved in running a mobile app development company – not just producing apps.

Every step you take beyond developing apps increases your potential to make money – to do better than just break even… This point is expanded upon at the end of this portion of the article.

The percentages involved consider 4 work weeks of 40 hours per month, 160 hours. That is to say, applying 5% of your time per month to say, networking = 8 hours per month. That’s 96 hours per year and 480 hours for a five year plan.

70% hands on development, study and research – This is your core work and what you are likely to spend the most time on if you intend to be a developer. The core of your business involves making great apps – either what you sell or what generates revenue for you, as a product or service. Without this, you don’t really have a business.

  • determine which platforms and devices you will service
  • continuously expand your coding ability,
  • keep and steadily expand your ideas for new apps
  • create apps and continuously improve them
  • test apps and performance on different platforms, devices and end-user engagement
  • define a process to evaluate which apps/features you will work on
  • refine in-app messaging capabilities
  • define your app lifecycle and explore possibilities to improve longevity
  • find others to help you with beta testing

10% marketing and metrics – Properly implemented, your marketing and advertising can equate to a continuous stream of revenue.  Making money is a lot easier if you already have some money for an advertising budget, but there are several areas of marketing that only involve your time.

  • develop a detailed understanding of your target market and affinities with peripheral markets
  • define your business model/s – free with ads, freemium, premium, in-app sales, subscriptions, etc.
  • consider changing business model per app relative to lifecycle or key marketing events
  • identify and constantly improve your key metrics performance,
  • always have a set of clearly defined goals (i.e. improve registration conversion rate),
  • define a marketing and advertising budget
  • develop a press packet, develop
  • learn how to best use social networks to promote your business/apps,
  • define methods to increase end-user “word of mouth” viral potential
  • aim to steadily increase your total points of presence
  • examine possibilities through app aggregators and alternative distribution channels/methods
  • examine sub-licensing possibilities particularly with regards to regional/language app localization
  • attend trade shows

10% business operations – There’s more to business growth than simple development, marketing and sales.  While the growth that you can find here is typically on the high end – when you know what you are working toward, it becomes a whole helluva lot easier to actually get “there”.  If you can make it there… you can make it anywhere. 

  • keep and maintain a business balance sheet
  • determine if you will hire employees or outsource
  • if you do or intend to have employees begin fleshing out a human resources program (company culture, company policies, benefits, etc.)
  • learn local tax laws and take advantage of business tax exemptions and deductions
  • have an SOP for meetings to make them more useful and efficient
  • decide which stores you will start on and how you will steadily expand your distribution network
  • define whether or not you will seek external investments and if so begin developing a prospectus for prospective investors
  • constantly look for B2B opportunities from strategic partnerships, joint ventures, special purpose vehicles, cross-promotional agreements, reseller agreements, value-added options for end-users to include discounts or coupons
  • define possible business and app exit strategies.

5% networking – developing your social and professional network to form relationships with specialists, but not just in mobile app development or marketing. A business can conceivably benefit from the input of all manner of subject matter experts. Sometimes these experts will be willing to help you for free, offer discounts, provide useful resources on their own sites and venues, or simply be able to refer others to you as needed.

  • device/platform specialists,
  • graphic designers,
  • video producers,
  • marketing and sales specialists
  • seo and content developers
  • human resources and crowdsourcing
  • quality assurance/process improvement
  • editors, journalists, bloggers
  • content developers
  • top competitors
  • retailers and distributors
  • local business assistance groups
  • tax advisors
  • legal resources

5% publishing and public relations – Properly developed, your publishing and public relations efforts serve as a force multiplier for your marketing and sales programs. A web site is a simple no brainer, even if you go with a regular WordPress install.

  • build your own web site
  • write articles or white papers
  • produce a newsletter
  • press releases
  • attend and/or hold a session in trade conferences
  • identify your most important end-users – and do everything you can to assist them in building up their own communities whether professional associations, businesses, gamer guilds, blogs, etc.
  • engage end-users across your different venues.

 

Why? Why have a 5 year plan?

 

VisionMobile’s survey of 10,000 mobile app developers indicates that up to 80% of developers are struggling to breakeven. It also shows a direct correlation between experience and profitability. The bell curve is significant in terms of total app production. Where 64% of first time developers are earning less than $500 monthly; only 34% of developers with 21 or more apps under their belt are still earning less than $500 monthly. More experienced developers are 27% more likely to be earning more than $5k per month, as well. Getting from your first few apps to having 20 or more is itself a landmark event for your career and business.

It is loosely considered that 10,000 hours of diligent effort in something approximates being an expert in it.

That might be 20 hours per week over 10 years, it might be 40 hours per week over 5 years. It’s not that precise, but it’s a good enough rule of thumb. The point is that if you are dedicated enough to something, you can pull the equivalent of two full-time jobs. There are 168 hours per week, cut out 40 hours for a day job, 40 hours for a second job, and you still have 88 hours. Getting a good night of sleep is important, 56 hours a week, taking you down to 32 hours to shave, shower, and eat. Personal circumstances will vary, but with some give and take, it is not just doable, but practically guaranteed as long as you keep at it.

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

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