During the seed funding stage, app entrepreneurs often turn to Google for information on writing effective app startup business plans for their mobile concepts. There is some really awesome information floating around the internet for how to write a business plan for an app, but this information doesn’t always translate into an effective and investor-ready plan. A great template will offer a general guide to organize information, but does not provide a successful approach to writing an engaging, informative and successful plan.
Have you read through sample app startup business plan PDFs on Google? Read five of them in a row, and you will be bored to death by the sixth. The secret for connecting to investors through a mobile app business plan is very similar to how authors structure novels to connect with readers. In this article, we will introduce the components of a Mobile App Startup Business Plan, and teach you how to build an awesome plan using our “Novel” approach.
What is the “Novel” Approach to Writing App Startup Business Plans?
I’d guess that the average tech investor receives dozens of business plans for apps to their e-mail each month. I’d also guess that the average app startup entrepreneur believes that this investor routinely and excitedly reads the thousands of pages they receive. Truth is, investors are either excited about or disengaged with a plan from the moment they look at the cover page.
Think about shopping in a bookstore. You’re looking randomly at a bookshelf for a great mystery novel. You see an awesome cover, and you grab the book off the shelf. Then, you flip the book over and read the summary. Sounds boring, you put it back. You repeat this process until you find one that is worth purchasing and reading.
This is the same process that investors go through when reviewing mobile application business proposals. If they see something that looks interesting, they read the executive summary, and then make a decision on whether it is worth reading or whether it fails to peak their interest.
The ThinkLions “Novel” approach to writing a business plan adopts the same principles that make novels interesting to readers. What is it about a summary that makes a reader anticipate reading an entire novel? What is it about a novel that captivates readers to willingly engage with 200 pages of text? The “Novel” approach answers these questions and applies them to the business plan writing process to create plans that are better written, more captivating, and ultimately, more successful.
Why a Mobile App Startup Business Plan is Different than a Traditional Plan
The “Novel” approach works especially well for representing a mobile app business model. While a mobile app plan has many of the same components as a traditional business plan, there are also many vast differences and considerations that must be accounted for. App startup business plans must especially consider:
- Size of Market: Physical businesses don’t have the reach that mobile apps do. Since 25% of the entire world is connected to a smartphone, phone app business plans must consider a much larger market. As a result, market number expectations for mobile apps can often seem unrealistic to investors.
- Design: UI/UX and design are extremely important in software. Your business plan should consider and explain how your application will look, feel and navigate. This is especially important if you have not built a prototype or MVP, as you will have to detail the user journey through text and visual examples.
- Revenue Model: Apps typically have very specific revenue model types. For example, many apps use one (or several) of the following mobile app business models to generate revenue: freemium, advertising, in-app purchases, subscriptions, or one-time fees (upfront payment to download app). Finding the right revenue model is critical for an app startup, as in some cases, there are benefits to using one specific revenue model over another.
- Proof of Concept: New apps are launched every day and competition is extremely high for those seeking investor funding. In the software world, investors want to see that there is a clear need and demand for your software. They don’t just want research; they want proof. Your app startup business plan should show how you have tested your concept thoroughly, and explain how results of that testing proves that there is a demand for your solution.
App Startup Business Plan: The “Novel” Mindset
There are hundreds of business plan templates available on Google. Most of them are acceptable formats for organizing your information. What’s more important than the format of your plan, is the mindframe that you have while writing your plan.
Consider what your business plan says about your brand. Not what it literally says, but what is said between the lines.
- Tone: Depending on your brand and industry, your brand personality should be expressed through the tone of your writing. Does your brand foster a culture of humor, or expertise, or even aggression? If so, the language and tone that you use should introduce and expose these qualities.
- Precision: When writing business plans for apps, be sure to never make opinionated assumptions. State facts or opinions that are based on strong evidence, and prove any assumptions before you write them in your plan. There is a huge difference in stating that “Teachers need apps to help them grade better” and that “78% of teachers agree that a mobile app would help them grade better”. One is an opinion, while the other is a statistic based upon real survey data.
- Brevity & Completion: Experts often say to keep your business plan under a certain number of pages — say, 20 or 30 pages. Realistically, your plan needs to be whatever length allows you to tell the complete story of your app startup in a brief but complete manner. Sometimes however, such as when applying for incubators or accelerators, there may be a certain page length requirement. Otherwise, it’s much better to have a longer plan than a plan that leaves questions and confusion. The trick is to be direct with each point and eliminate any fluff or unnecessary information.
- The Plot: In some ways, you are literally telling a story — the story of how your concept will grow into a sustainable and successful business. No one likes reading textbooks. We read them when we have to, but no one actually enjoys it (well, I don’t anyway). Think of your app business plan like a novel — you want to draw emotion and take readers on a journey from start to finish. Successful app startup business plans not only inform the reader, but they engage them, and in some cases, even entertain them.
Writing the App Story
To people who don’t read plans all day, the individual sections of a business plan can seem somewhat disconnected and independent of one another. However, we’re writing a novel and not a textbook. This means that each chapter isn’t a separate lesson, but a continuation of the story. The journey for a successful business plan moves from chapter to chapter, building upon the story with new information. Consider the following plot:
- Description of the business: A great story always starts with an introduction of the character, or in the case of an app startup business plan, the Company or brand. The goal in the beginning of the story is to explain the character’s personality and mission, and to build a connection between the character (brand) and the reader. If this story were about Batman, we would start by introducing Bruce Wayne and establishing him as an important part of the story.
- Business Objectives: In our Batman story, the first chapter would introduce us to the character, and by the next chapter, we’d know that the character’s mission and goal was to save Gotham City. Now that we have identified your character, or your brand, the next chapter of the business plan will be to display what your character hopes to achieve throughout the story, or in the case of an app startup, throughout the first several years of business.
- Identify the Problem: At this point in a novel, the plot would present the “challenge” in the story. In a superhero story, this is where the city is being terrorized by the villain. For an app business plan, this is where you identify what issue is terrorizing your market. This chapter presents the information that builds a valid case, and proves that a problem exists and a solution is needed.
- Present the Solution: As Penguin reeks havoc upon Gotham City, everyone knows there is only one person who can beat him… Batman! Looking at Batman’s history, we know that he possesses the required skills and knowledge, and has the unique advantage to win a battle against Gotham’s enemies. The operational strategy portion of your app business plan will do something similar. While your app solution probably doesn’t involve wearing a cool costume, this chapter will identify why your brand is the perfect solution for the problem that your market (or your Gotham City) is facing. The management portion of your business plan will prove why your team is ideal for defeating the Joker, and why it has the unique advantage over any other superhero or brand (don’t forget, Bruce Wayne was a billionaire entrepreneur — Wayne Enterprises).
- Show the Result: After Batman finishes kicking ass all over Gotham, the story concludes by showing the city revived back to it’s former crime-free glory. At the end, there is usually a successful ending that perfectly concludes the story with the character achieving his or her goals. In an app business plan, the result of your solution is displayed in your sales expectations, financial forecasts and valuation projections. In other words, your financials conclude your story and show the success of your character/brand as it solves the market’s problems.
I’ll admit now that I know much more about app startup business plans than I do about Batman. My apologies to any Batman fans, I haven’t watched a Batman movie since I was a kid… Does Gotham still even exist? Anyway, don’t let that deter you from the point of the article!
Investors are Human
Always keep in mind that there is a human on the other side of your business plan. If your plan is your only way to present your idea to them, make sure it is presented in a way that is compelling, captivating and worthy of their time. Use our “Novel” approach to create an app startup business plan that stands out and demands attention! Be Batman!
Do you have any tips to writing business plans that stand out? If so, leave them in the comments below!