Does an app startup struggling to penetrate the market meet really need to doll out the extra capital for a business plan?
Yes, they do!
In fact, it is a solid business plan that can change the horizon for a mobile app that may be headed for failure.
A business strategy typically has detailed information regarding a startup chances of success and potential in a specific industry. It also offers business direction and insight into the behaviors of your demographic.
Even though all that sounds like it takes a lot of time and effort, it is worth it. Here are some of the major reasons why a business plan is your biggest secret weapon when building a successful mobile app startup.
They Prove the Viability of your App
A lot of app startups begin from great inspiration and a passion for an idea. However, while you may feel strongly about it, does not mean that the world will pay to have the app on their phones, or that they even need the app that badly.
While you are still at the concept stage, a business plan will make sure that it is the idea you should run with.
The first component of a business plan is the market research. This will tell you what your target audience really needs and any other opportunities in the market that you should grab.
They Help you Make Better Decisions
As an entrepreneur you do not have the instincts of what it is like operating in a certain market or industry. It helps you make educated decisions and calculated risks. You will soon find that your role as entrepreneur is often decision making and crisis management. Not every leader can take their sweet time to sit down and contemplate the ripple effect of each option. A plan forecasts the inevitable ups and downs of a business and offers direction.
With a business plan you can outline the important milestones you must meet as a startup within the first few years of operating in a market. This will help you stick to a course. After you launch into the market you will have a real measure for success and growth. You can match each accomplishment with a five-year business plan that you started with.
You Need One if You Want Capital
Having a business strategy instills a lot of confidence in your potential investors. Whether you are approaching an angel investor, a venture capitalist or a bank they need to know that not only there is an opportunity in the market but you have what it takes to make an app that addresses this.
The biggest thing an app startup business plan can offer then are your financial statements and projections. Make sure that as you present these you simplify them. Show them when you see the business breaking even where you and your investor can then start earning revenue.
You won’t be Scared to Spend
One of the biggest challenges of running an app startup is figuring out where to spend, where to curb, and how much to spend. With a plan you will be more confident in where you decide to invest your capital and resources. All you have to do is review your forecasts and try to stick to them as closely as possible.
You Will Detect Problems Early On
Some obstacles in business are inevitable but then there are some that you never see coming. A solid strategy that allows you to monitor where you are at and where you are going helps your startup detect and fix problems while they are in the early stages.
One example of this is reviewing your cash flow statements regularly so that you can foresee any time period where you will be tied up for cash. This way you can arrange for the cash the startup would need before you are taken by surprise at that point.
Writing a plan and reviewing it over and over again may just be the secret to growth and success. Business plans allow us to make goals on a routine basis and then put things into action to achieve them. When you find yourself tracking progress you will also find yourself molding your business to gear it towards greatness, something you may have omitted without a business plan.