How to start a mobile app business in 2021

Branimir Hrzenjak
8 minute read

You’ve finally decided to start your own mobile app business, but you’re unsure of how to do it? There’s a lot to learn and you’ll need a bit of help to get you started. 

There’s no denying that the mobile app market is growing at an exponential rate. Just look at mobile games like Pokemon Go or Clash of the Clans — they’ve turned a profit margin of millions. And it’s not just games — we use mobile apps for everything in our daily lives. 

That’s why 2021 may be the best time to start a mobile app business. As people spend more and more time on average on their phones, your potential market increases exponentially. 

In this article, we will guide you through the steps required to start your mobile app business.

Write down your app business idea 

There’s no point in even starting a business without an app idea. Think long and hard about what your app should be about, to whom it should appeal, and how to monetize it. 

There’s a lot of planning that goes into an app before the first line of code is even written. 

Having a well-thought-out idea helps minimize the stress of figuring it all out along the way and allows you to make strategic decisions beforehand. 

You should put your app idea in writing, and it should include: 

  • App description A few choice words about your app.
  • Targeted audience rundown Who is your app for? 
  • Initial wireframe sketches What will your app look like?
  • Monetization outline How will your app make money? 

Think of this as an initial sketch of your future app business, based on your general knowledge of the market and your vision of what the app should be. 

It’s still a long way from becoming a product.

Once you’ve written down your app idea, it’s time to analyze its viability in the market. 

Do research

Having an app idea can only get you so far. You’ll need market data to corroborate your initial assumptions of the market and assess if there’s an audience for it.

Essentially, you’re looking at data to see if your app idea has a chance of being successful. 

Competitor analysis

The easiest way to market research is to start by looking at your future competitors. Analyze their approach to the product, their success stories, and failures, in order to get an overview of the market. This will help you understand what works and what to avoid. 

More so, download their app and talk to other people who use it. Gather insights into features they might be missing or things that annoy them, and use that data to improve on your initial app business idea.

This way, you’re making sure your app is and stays competitive.

What makes an app competitive? Let’s explore below:

  • Appealing design Your app looks nice and has compelling visuals. 
  • Great user experience The experience of using your app is satisfying. 
  • Scalability It’s easy to upgrade and works well on all phones. 
  • Usability It serves the desired purpose and provides value. 

Competitor analysis is the backbone of your future business. Without it, there’s no telling where you will stand in the market or what you’ll need to do to drive your app to success.

Market research

Other than competitor analysis, you should also conduct general research of the market. Look at current and future trends and prepare for the completion of your app. The analysis should help you understand what the market will be like once your app is ready to be launched. 

There isn’t a single research approach that works for all markets. While doing research, you should look at the state of the market, its growth rate, and current trends. The goal is to get a broad understanding of the market and your app’s position in it. 

What are the benefits of market research?

  • Growth booster It identifies potential business opportunities.
  • Market insight It helps spot new and emerging trends.
  • Competitor advantage It helps you outsell your competitors.
  • Lower risk It helps lower overall business risk.

Only by using market research will you be able to effectively set goals for your future business. Look at it as a reference point for your app development. Every time you’re unsure of a decision, you can always go back and study it for answers. 

Write a business plan 

After you’ve carefully researched every aspect of the market, it’s time to formalize your app idea into a business plan. It should serve as a proof of concept of what you’re planning to build.

Executive summary

A good business plan should always start with an executive summary of your future business, focusing on its unique value proposition and your goals moving forward. Its purpose is to summarize your entire business plan for anyone interested in the highlights.

How to write a great executive summary? Try to answer the following questions: 

  • What am I trying to accomplish with my app?
  • What is the general purpose of my app? 
  • What does my app do better than the competition? 
  • Who is my app’s target audience?

A great executive summary is aligned with your goals and offers transparency in communicating your app idea to potential investors.

General description 

After that, you’re free to move on to more general information. Briefly describe what your business will do, its goals, and the company structure. Say a few words about what your future team should look like, and what expertise will be required. 

This way, if you happen to look for funding, the investor will have the chance to learn more about your company and its people. More than that, it will introduce them to your business key values, long-term goals, and key success values.  

Here’s a list of things you should include in your company’s general description:

  • Mission Statement A short statement that tells why the company exists and what its guiding principles are.
  • Goals and Objectives An overview of your business goals or long-term plans, and the steps to achieve those goals.
  • Business Philosophy The fundamental principle(s) on which your company is based on.
  • Industry A description of the industry you’re in, including your future growth prospects.
  • Strengths A description of what makes your company stand out from the competition.
  • Legal A rundown of your company structure.
  • Target Market A brief description of your target market and your plan to conquer it.

This is the only section of your business plan that will allow you to really humanize your brand. Show that your app idea is more than just numbers, research and words. You want potential investors to really connect with what you’re doing and the people you’re doing it with. 

Marketing overview

Next up, you’ll want to talk about marketing. You’ve spent some time researching the market beforehand, and now it’s time to put that in writing.

Focus on your discoveries, and back them up with data that justifies your app’s unique business proposition. 

There are several dimensions to marketing you’ll want to cover: 

  • Market forecast This in-depth analysis shows if there is a real market for your app and serves to predict its overall success over time. 
  • SWOT analysis The strategic projection of your apps strengths, weakness, and threats that uses data to highlight challenges your app business might face. 
  • Marketing strategy An overview of your plans for marketing the app moving forward, based on gathered market data and competitor analysis. 

There’s no viable product without marketing. An overview of your marketing strategy outlines how your app will attract potential customers, while also highlighting the segments that might still require work. 

Finance projection

After going over marketing, you’re finally ready to talk about finance. Present your funding projections and lay out the funding requirements that will make your business a reality. 

You should always leave a little room for varying costs and other unexpected expenses in your projection. The market is always changing, and it’s wise to have a bit of money stashed away. After all, one of the main reasons why most startup businesses fail is a lack of money. 

The most common reasons why startups fail

A good finance projection is what ties your app idea together and puts it all into perspective financially. Be sure to stick to the data and don’t set unrealistic goals you can’t hope to meet. 

Monetization strategy

In order to round up your business plan, you’ll need to outline your monetization strategy. Show how your app will make money once it’s launched, and what the expected ROI is.

To write a good monetization strategy, you’ll need insight into both current and future mobile app trends. Market trends change, and a year or two from now, when your app is done developing, the market may look a lot different than today.

App monetization strategies, sorted by popularity

Your app needs to monetize at some point, to start earning back the money invested in its development and marketing. Your monetization strategy should stay flexible so that it can evolve according to your app’s needs and the goals set. 

Secure funding

To ensure you have the means to build your app, you’ll need funding. Development is not cheap, and you want to make sure you don’t run out of money before your app is finished. 

There are several ways you can go about securing funding to start your business:

  • Take out a loan Finance the whole project yourself using a bank loan. 
  • Start a crowdfunding campaign Raise funds to build your app on fundraising websites like Kickstarter or GoFundMe. 
  • Find an investor Find a business partner or apply for a startup incubator to secure the funding needed to build and market your app. 

You’re not in any way limited to just one of these options. Feel free to try out multiple ones to see which one works best for your business. 

Choose a development platform 

After your business plan has been laid out, it’s time to choose a development platform. This will deeply impact everything moving forward, from development time to your app performance. 

Choose wisely when deciding which platform to build your app on. For mobile app development, there are several ones to choose from: 

  • Android 
  • iOS
  • Flutter
  • React Native 
  • Xamarin 
  • Unity
  • (…)

The first two are mobile platforms designed exclusively for Android and iPhone devices, while the others offer a multiplatform solution. Multiplatform solutions let you create an app and build it for both Android and iOS devices at the same time. 

Which is better, native or multi-platform? That’s up to you to decide. 

Here’s a comparison between the two that might help you make up your mind: 

Native vs. multi-platform development

There’s no easy answer to which platform is the best for developing your app. You’ll have to base that decision on who your customers are, and on your monetization strategy. 

Pick a team and start developing                                         

You’re all set to start working on your app. It’s now time to pick the team that’s going to be building and maintaining it. 

There are several different approaches you can take here. Most don’t start off with a full team right away, but opt for one or several (cheaper) alternatives. As your app starts to grow, your team will expand to meet those requirements.

Either way, having a great team goes a long way. You will be spending a lot of time with them in the future, so be sure to choose them wisely. 

Hire a freelancer

If money is an issue at this point, you can hire a freelance developer and pay him according to the work he has done. To help with that, you can turn to sites like Upwork or Toptal. The overall competition is usually high, so the general price of these services is lower. 

Popular freelance platforms

Beware, though: freelance work may be cheaper, but its quality might vary. As a result, your app might end up more low-grade than you have expected. 

Choosing to hire a freelancer to develop your app is a high-risk move, but it can be rewarding. There is a lot of freelance talent out there, so take your time when picking the right one.

Hire a full-time developer 

If you’re looking for something more serious, hire a full-time developer. Such a move will allow you to really be in charge of your app development. However, it will cost more. 

Developer salaries vary from country to country, so be sure your resources align with the projected funding requirements for your app. Additionally, hiring a full-time developer takes time. 

Developer salaries by country

While hiring developers full-time is a more worthwhile approach than hiring freelancers, it does take longer to get everything up and running. Make sure you start the recruiting process as soon as possible, or you might find yourself scrambling for talent later on.  

Hire a mobile app development agency 

If you’re looking to build your project at a scale, hire a mobile app development agency to do the work. This way, you’ll be hiring a team of qualified specialists to bring your app vision to life.

Development agencies are already set up and have both the skills and experience to see your project through from beginning to the end. 

This way, all you have to do is to provide the app idea and fund the project. You’re essentially waiting for the finished app. 

There are many benefits to hiring a mobile app agency:  

  • Agencies have a structure that is proven effective. 
  • Mobile app development agencies entail a vast range of specializations. They understand the industry, so they can offer the most effective results.
  • Top agencies have the resources to attract the industry’s top talents.
  • The processes in today’s agencies are completely transparent, with developers documenting all tasks done and time spent on the project with state-of-the-art management software.
  • Agencies hire experts of all profiles. If you have to scale your project or need additional services, they have the human resources to accommodate you and offer support.

This might be the most expensive development option, but it’s also the safest one, when it comes to making sure that your app turns out the way you’ve envisioned it. 

Create a pricing model

Your app is in development, so half of the work is done. It’s time to think about how to monetize it, by creating a pricing model that promises a return on investment for your business.

There are several pricing models you can choose from, depending on what your app is about:

  • Free 
  • Freemium
  • Subscription-based
  • Paid

There isn’t one single model that works for all scenarios. You’ll have to decide which one works best for your business based on market and competitor research. 

Free apps

Your users will get to download and use your app for free. You won’t be charging users any fee for the services you provide, but instead you’ll monetize it using advertising. 

It’s a great way to make money quickly, but often at the expense of user experience. 

Free apps are usually monetized using in-app advertising or sponsored content.

In-app based advertising example

In-app advertising entails adding ads to parts of your app, which then generate profit based on the number of users that see or click on them. This method is easy to implement, but it can also easily ruin your app UX. 

After all, your app users don’t want to get bombarded with ads all the time. 

That’s why sponsored content represents the more sensible approach. It involves placing a piece of paid content (e.g., an article) inside of your app, with the intent of promoting a certain service or brand. 

Unlike sponsored ads, it’s done in a subtle way so it fits your brand and doesn’t ruin your UX. 

For all intents and purposes, it’s just like any other piece of content in your app. 

Freemium apps 

As one of the most popular app monetization models, freemium combines aspects of both free and paid apps. Your users get to download the app for free, however, certain functionalities may be limited or unavailable until you subscribe or upgrade. 

Let’s say you’re looking to make your app freemium. 

You would make your app free to download, but include in-app purchases. This means limiting access to certain features or providing the option to purchase virtual goods.

There is a variety of option your users can be given, for example: 

  • Pay a certain amount to remove ads completely from your app.
  • Pay for additional features that aren’t available or are limited in the free option.
  • Pay for in-app energy boosters, skins or similar virtual commodities.
Freemium based advertising example

This way you’re giving users a taste of what your app has to offer for free, but in order to use certain features or virtual commodities they’ll have to pay for access. 

Subscription-based apps 

Subscription-based apps are similar to freemium ones, but with a much clearer distinction between what’s free and what’s paid. These apps require you to pay a monthly subscription in order to use their full services.

Subscription based advertising example

It goes without saying that getting users to pay for an app is challenging. Your app has to prove that it offers a great service, and even then, a lot of people who download it might not subscribe. 

One of the ways to get users to pay for your app is to establish clear limits between what’s free and paid. You might want to allow certain users to try out premium features for free, or reward active users with free trials in order to facilitate upgrades.

This pricing model allows for a more steady flow income and lets you build a steady user base.

You’ll find that the bigger challenge here is to keep customers you acquired. You’ll have to keep your app updated regularly with new features to ensure they don’t churn.  

Paid apps

Unlike free apps, paid ones require users to pay before they can download it. 

This monetization model is considered out of date, as it requires users to buy the app before even trying it out. While this may have been considered normal 10 years ago, users nowadays aim to try out an app before buying it. 

This has led to a decrease in the number of paid apps over the years, with them almost going extinct in 2020.

If you’re thinking about making your app paid, beware of the fact that not many people will be interested in your app from the beginning. More so, they might overlook it altogether if they see there’s a price-to-download attached to it. 

Market your app

Every app needs promotion, and marketing is how you get yourself noticed. It gets your app in front of a targeted audience and attracts potential customers. 

There are several marketing channels for your app that you can choose from.

Social media marketing

If your users are active on social media, create social media profiles for your app. You’ll be able to get in touch with your audience easily and directly. 

Social media is the foundation on which brands base their relationships with their customers. You can use it to update them on relevant news, run promotions or offer them customer support. 

Here are some of the outstanding benefits of social media for your app: 

  • Better connectivity Learn what your customers think and share new ideas with them. 
  • Increased app awareness Let customers discover your app through social media. 
  • Better customer experience Establish a strong presence and humanize your brand. 

Most social media sites also offer paid advertising. It’s a great way to promote your app using ads at a price, attracting an even larger audience as a result. 

To attract and reach customers, your app will need to go social. Be sure to pick a social platform where your customers are most likely to hang out. 

Content marketing 

If you’re looking for exposure outside of social media, you can try content marketing. Search the internet for opportunities to get mentioned in blogs, schedule reviews and get yourself noticed on app listing websites. 

Any of these are a great way to really make an impression on the market. However, you may find that this form of marketing requires a lot more time before you see results. Boosting your web page rankings with content can take time but has a greater return in value later on. 

Content marketing process

There are no shortcuts when it comes to content marketing. In order to fully take advantage of this strategy, you’ll have to be ready to wait for the results. Once they do show, they’ll continue driving relevant traffic straight to your app.   

Search engine marketing

If you’re looking to get discovered on search engines like Google, you might want to consider search engine marketing. It offers you the chance to promote your app using ads in front of a global audience, for a fee based on the desired completed action. 

Google offers apps the opportunity to promote their product using app campaigns. They’re a straightforward way to get users to try out your app or complete a desired action inside of it.

This way you’re not paying just for exposure, you’re paying for actual users. 

Search engine marketing is costly but worthwhile. You can use it at a scale and even drive customers to interact with brands in meaningful ways. However, it may require a lot of optimization in order to be cost-efficient, so keep an eye out. 

Conclusion

Starting a successful app business requires careful planning and effort. Start off slow and prepare for each step in detail, making sure that you’re not rushing into things. 

Taking this into consideration, it’s also important not to lose sight of your team. They’re the people who are working on your app, and their satisfaction should be a priority. Mix that with a solid business plan, and you’ll have no trouble achieving business success. Good luck!