A Guide on How to Create a Business Plan for Your Application Startup


People who have new application to set up usually do it to either make sure the team is working towards the same goal or to gather funds. If your reason is the former, there is no need for you to formalize your business plan. You can simply make a canvas for your business’ model. This type of approach is easier and more focused compared with a business plan that is traditional. A business canvas is better in terms of its adaptability in technical startups.

You ought to continue reading this article if you are one of the people who plan to write a business plan to gather funds. You can personalize each part if you plan to compete your mobile application.


1 Implementation Summary

Implementation summary is the most basic and the most important aspect of your app startup’s business plan. Because the implementation summary is the one that will make an impression to your potential investor, it should be clear and succinct. The lesser, the better.

1.1 Difficulty

Successful enterprises are able to determine a problem and find an appropriate solution for it through their commodities. Upon the detection of problems, ask these questions to yourself:

  1. What causes the customers to be dissatisfied with the current situation?
  2. How does this difficulty affect the customers?
  3. What steps are they taking to address this problem?

1.2 Resolution

Resolution is the part of the plan where you present your application to your target audience. However, you should not divulge too much information regarding your app. You need to focus more on the difficulty you identified. By listing down how your app solves the problem, you can concentrate on finding the resolution first.

1.3 Proposal

Your proposal should be unique and valuable. These characteristics will make your business stand out. If possible, your business should be the only one that can provide solutions. Moreover, do not state that your business is better than your competitors. Basically, do not make false promises to your customers. Doing this will greatly result to a negative impact, especially on the side of your audience.

1.4 Aim

This is the part where your potential investor will check if their goals and your goals match. The definition of success such as reaching a target for a specified amount of time and the end goal are included.

2 Corporation

Some shareholders think that the section where you discuss your company in your plan is the most vital. However, there are some risks in doing this. For instance, it could be that what you’re currently writing about your company does not match what your business will become. This is the reason why most accelerators such as Y-Combinator make decisions according to the preference of the founding team and according to the potential of the company as well.

2.1 Overview

This is the part where you define the current and legal structure of your corporations. Questions regarding your company’s entity, brief history, headquarters, and number of employees should be answered.

2.2 History

You should discuss more comprehensively about the history of your company. You can tell about the inspiration for starting this kind of business and narrate how you and your team developed the idea for the app. You can also mention about the milestones your company has achieved, changes it has gone through, and just about everything that could be relevant.

2.3 Management

The management reflects the image of your company. Thus, for each member of your management team, include their names, college degrees, relevant work experience, and job description in this section.

2.3 Consultation Team

This is your team that helps you come up with the most crucial decisions for your company. The members of your consultation team must have an experience in the industry of your business. You can list down their position in your company, their contribution in your app startup, and their involvement in your company.

3 Business

Company owners ought to be familiar with the industry of their business. They should be updated with the present situation and future projections. Therefore, you must be knowledgeable about your business and its nature.

3.1 Size

For startups, the size of the market is divided into three:

  • TAM (Total Available Market)- This the number of overall demand for your product.
  • SAM (Serviceable Available Market)- This is a part of the TAM that includes the sales channel of your business.
  • SOM (Serviceable Obtainable Market)- This reflects the first customers who purchase and use your product. It is a part of the SAM.

3.2 Projections

Nielsen or Forrester can be your source of projections since these are established market research firms. You can include the growth rate of your competitors in the industry and the amount that you have invested for your company. Do not include global economy statistics if you only focus on domestic market.

3.3 Competition

The Gartner Group, which is a market research firm, popularized the 2×2 matrix. This is a model that investors want to see. For the variables, you can choose and set your competition apart through the X and Y axis. The function level, broadness, pricing, and customers are some examples that can work for you.

Another thing that you need to remember is not to put your company at the top right corner of this matrix. You have to be strategic and realistic with how you position your business.

3.4 Analysis of SWOT

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This is an objective analysis of how your business plan weighs if you stack it up in your target market and competitors.

4 Marketing

You have to make your strategy in marketing realistic, since this is what investors are looking for. You also have to make sure that these strategies are doable in reaching out to your app’s future customers or users.

4.1 Acquiring Customers

In this section, you will talk about the methods that you will use in attracting customers. Be specific with your details and tactics. Your expectations must be realistic, and your expenses should be included. The funds you will get is for the growth of the product, so you need to be quantitative. By doing this, investors can estimate the risk there is with your plan.

4.2 Growth

If your model entails a large customer base, you need a referral system in your app. Basically, you will need to take advantage of networking. Two good examples of this are Uber and Houseparty.

4.3 Metrics

It is not a good idea for people doing app startups to concentrate much on metrics because it will not sustain your business. You can choose 1 or 2 metrics that focus on your business instead. For instance, if your app is for social networking, it will be better to focus on the number of active users who log in every day.

5 Financial Strategy

This is the final part where you show your investor the amount of capital you need to setup your app. You have to map out where all the money will be spent.

5.1 Monetization

Advertising, paid, purchases through in-app, and subscription are some of the ways to make money for your app.

5.2 Cost

Although you cannot accurately give the amount of money you will be needing, make sure that your estimate is close and reasonable. You may include emergency funds as well. Do not forget to include the frequency of the payment and the stability of the price for your expenses. The frequency of payment can be one time or recurring. For the stability of the price, it can either be fixed or variable.

5.3 Required Funding

In the last section, you should be able to answer these questions about your business plan.

  • What is the amount of money needed?
  • How many percent of the equity can you give up?
  • Is this a preferred stock or a convertible note?
  • How frequent should payments be made?

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