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So you’ve got your million dollar idea, you’re calling up app developers. In your head, you’re hiring your friends and planning your end of year business trip to Europe. Next thing you know you’re driving your supercar to your multi-million dollar house.
But let’s step on the brakes there.
What do we need to do before you get to this point?
You’re going to need a business model. I’m sorry, it doesn’t sound as exciting as all the stuff I mentioned before. But how else are you going to get there?
A business plan is essential to the success of any business.
Plan the plan
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What does that even mean?
Well, you can’t just make the plan and hope for the best!
Who is this plan for? Does it have more than one purpose? Is it for internal use or is it for others to see? If a third party is seeing this, what do you have to achieve from them reading it?
Plan to write your summary last, because you have to keep it on message, keep it concise. You want to make sure there isn’t anything you’ve missed.
As if you write the summary first, you may add something or change something further in the plan.
The summary is going to be for anyone who is going to read this, investors, partners and developers. The summaries purpose is to get them on board with the idea before they read anymore.
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Do your research. Just do it. Nike.
No, unrelated, my bad. Doing the research, however, isn’t unrelated. You’re going to need to make some very serious decisions in your business, all of which must be backed by your research.
Here are some topics you MUST research. There are a few things you don’t have to do, unfortunately, this isn’t of-of them.
Researching your Potential Customer
This is just a selection, want to know how you’ll find more? Random guesses.
Wait, no, it’s research. More research.
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Branding – Your Core Story
Who is this app for?
What are this apps Unique Selling Point?
What’s the pricing structure?
What is your business structure?
Are you going to have a casual Friday?
Serious stuff! Really. Company culture is important, cultivate it.
It’s a lot of questions, but that’s only the tip of the iceberg, unfortunately. If building a successful business was easy everyone would own one… bottom line it’s not.
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Do your research to create expected figures. Create estimated marketing costs, revenue projections, break-even analysis and profit/loss statements.
Then measure the expected figures to the actual figures, once your startup has taken off.
Don’t do it alone
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Get some help making your plan, from a friend to a professional. They can all offer something that will help or change your plan.
Professionals like business advisors and accountants. Who offer expertise in an area you may lack. Which is fine, you’ve already come up with a billion dollar idea. Why should you do all the work?
Then, getting your friends and family members to review the business plan. A different set of eyes is very helpful. Having errors in your business plan will detract from a professional image. So having a different person, or multiple people read it, will hopefully find all errors.
Distribute it to everyone, the more people that are happy to review it the better. Unless they take your idea and run with it. Maybe save it for people you trust.
But for everyone else? If you have an idea that you want to be tested out, run surveys, questionnaires and group interviews. Do whatever you have to do in order to validate your idea!
Find out what people want from an app, see if your app idea aligns with their wants and needs. If you don’t have the budget for this, run these polls on social media. Share it in groups that relate to your idea.
Our Recommended Business Plan or Model
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For all entrepreneurs and startups, we recommend a lean canvas business model. Lean canvas business models are a more visual approach, making your information more easy to digest by those reviewing it. Also, it’s called a lean canvas business model because it is a cut-down business model, it’s quicker and easier to create and allows you to quickly adapt. Build-Measure-Learn.
Business Plans are dinosaurs used by corporations with unlimited money. Business Models are used by the movers and shakers.
All it requires is 9 sections, that we will go through.
Lean Canvas Business Model
- Here you will list your top few problems and how these problems are currently being solved, if possible.
- Customer Segments
- This section is where a good chunk of your research to go. Here you list your target customers and their characteristics.
- Unique Value Proposition
- Essentially your elevator pitch. A message that turns someone unaware about your app into a prospect. Make sure to make this compelling, clear and concise.
- For the solution, list all the solutions to your problems, that aren’t being solved already.
- What are the ways customers will find your product, and from there go to buy/download it?
- Revenue Streams
- Where are you going to make money? If we’re talking about an app, is it going to have an upfront cost? Or will it have in-app purchases or advertising? Could be a combination or any or all of those.
- Cost Structure
- What are your fixed and variable costs? Fixed costs are things like office rent and computers. But variable costs are things like server hosting, when your downloads and user base increase, likely your server costs will too.
- Key Metrics
- What are the ways you’ll be able to show how your business is doing? For an app startup, you would look at downloads, in-app purchases and daily active users.
- Unfair Advantage
- What do you have that no one else does? This thing can’t be done by anyone else easily. It’s left till last as it’s the best selling point if you’re trying to get investors onboard.
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A lean canvas business plan shouldn’t take that long, however, it may make or break the success of your app. But it is too valuable and essential to not do.
Even if you think you don’t have enough knowledge now, business plans can be updated. So evolve the business plan as you and your business does.
Have you created a business plan? Maybe you’ve found something you’ve missed. Or maybe you’ve found something I’ve missed. If so, let me know in the comments section below!
So what are you wait for, let’s get started before that house goes!
If you have an app idea you wish to get off the ground, see our quote page for more information!
Have you heard of the Internet of Things? It’s the way all of our smart devices can, or will connect up to each other. If you’re curious, read more, here.