Business Plan for an App: A Step-by-Step Guide
- Leanware Editorial Team
- 2 days ago
- 11 min read
Launching a successful app isn’t just about coding a cool idea - you need a solid business plan that charts a course of action from concept to growth. This roadmap guides your team through each stage of app development, bringing the product owner’s vision to life through market research and financial planning.
Once each step in the business plan is completed, it opens the door for the next stage. This linear sequence adds structure to the process while leaving room for iterative improvement. So, how do you write a business plan that covers all your bases?
Discovery Phase: Laying the Foundation for Your App Business Plan
The discovery phase is all about grounding your idea in reality. Think of this as laying the foundation for your app: who is it for, and how will it compete in the market? The purpose of this phase is to identify an opportunity and use data-backed research to validate that your concept fulfills a real market need.
What is a Business Plan and Why Does Your App Need One?
The #1 reason 42 percent of startups fail is due to “poor market need” — building a product nobody wants. The second biggest reason is companies running out of cash. A business plan documents the story of how your app will become a viable business — covering concept, target market, strategy, organization, and financial projections.
Writing a business plan forces you to answer critical questions about your app’s purpose, the problem it solves, who your customers are, and how you’ll make money. It also serves as a reality check — helping you determine if the opportunity is big enough and if your approach makes sense.
Market Research and Analysis
A thorough market analysis helps confirm demand for your app and convinces potential investors that there is a real consumer need for your product.
Market Size and Trends
Industry research, like trend analysis, helps you realistically define how many users your app can attract. Many business plans include metrics like:
Total Available Market (TAM): the total market share and potential revenue (e.g., all mobile fitness app spending worldwide)
Serviceable Available Market (SAM): a customer base you can realistically reach (e.g, English-speaking markets in the US)
Serviceable Obtainable Market (SOM): the specific subsection that you intend to target or a gap in the existing market
Customer Personas
Developing a fictional yet realistic profile of your ideal user puts you in the mind of your target customer. These profiles make your target users tangible with information like:
Demographics: age, gender, location, income
Psychographics: goals, motivations, frustrations
Behaviors: tech usage, lifestyle, buying triggers
Ideal Customer Profile 1: Corporate Tina, who struggles to find time to work out and values on-demand fitness solutions — making her a prime target for your home workout app.
Now, every time you’re building features or crafting marketing messages, you can ask yourself, “Would this appeal to Corporate Tina?”
Competitive Landscape
Understanding your users is important, but it’ll give you incomplete information until you map out the competitive landscape. No app exists in a vacuum — even if you’re truly novel, your potential users are solving their problem somehow today.
What you’re offering is a better alternative. In this phase, you’ll want to identify:
Direct Competitors: apps or services that cater to your SOM and are similar to your product
Indirect Competitors: these are alternative solutions that your target customers may already be using
For each major competitor, analyze their strengths, weaknesses, and strategy. What features do they offer? How do they monetize their product? Who is their target audience? The goal is to figure out how you can position your app to win in this environment.
Defining Your Business Vision and Leadership
The greatest companies start with a story — about the leadership team, their vision, and the company's mission. Customers and investors want to buy into the people behind the project as much as they do the product itself.
Executive Summary
Paint a vivid picture of the company you’re building with the executive summary. This is the section everyone will read, so it needs to pack a punch. Walk your readers through the three big questions:
What is your product and business model?
Why is it a good opportunity?
For whom is it intended?
The goal here is to build a convincing one-page narrative about the unique value your app will bring — starting with your mission statement, offering insight into the leadership team, and a high-level overview of financials and growth plans.
Company Description
This section lets you describe the specifics of your company, providing background information on who’s driving the venture and what the business looks like.
Mission, Vision, and Values
The mission statement outlines the goal of your project, and the problem you’re going to solve. Your company vision will speak to the impact your app is going to have on the market, and visualize the future you want to create.
Mission addresses a current need
Vision outlines a long-term direction
Your values are the principles that guide how you operate. Is your focus innovation and inclusivity? Do you value transparency? Restricting yourself by listing 3 to 5 core values that define the identity of your company and the culture you’re hoping to create.
Team Overview
Introducing the founders and key team members convinces readers — this team can pull it off! Use the overview to focus on the experience and expertise each person brings to the table, which makes them an invaluable asset.
Strategy for Marketing, Sales, and Revenue
With the basics covered, it’s time to delve into how you’ll attract customers and make money. You can’t write a business plan for an app without developing a go-to-market strategy. This section will cover marketing and monetization.
Marketing and Sales Strategy
Once you know your target audience, you need to grab their attention. That’s where the marketing and sales strategy comes in. This is a comprehensive plan outlining how you’re going to attract, convert, and retain users for your app.
Pre-launch, Launch, and Post-launch Plans
To cover all your bases, you need a three-pronged approach:
Pre-launch: There are multiple ways to build interest leading up to the date of the launch — landing pages, email marketing, a growing social media presence, or even community engagement through forums
Launch: To make a launch successful, invest in coordinated marketing blasts using established channels (emails, social media), along with an app store optimization strategy and a paid ads campaign
Post-launch: A long-term post-launch sales plan should rely on established content marketing channels (blogs, scripts, emails, whitepapers), continued social media engagement, referrals, and partnerships
Customer Acquisition Channels
When it comes to running a successful marketing campaign, you’ll want to diversify your efforts across multiple channels to get the best results.
Organic Search (SEO): Building a reputable web presence can draw search traffic — consider whether your app could benefit from organic lead conversions
Social Media Marketing: Identify which social media platforms align with your audience’s interests — Instagram, Twitter, TikTok, LinkedIn?
Paid Advertising: A well-placed ad can be worth its cost — consider where your money would have the most impact
Content & Email: Blogs, whitepapers, emails, videos, podcasts — any content that hooks your users can lead to a potential sale
PR & Media: Getting featured on popular media for your niche can drive instant traffic to your app
Community Engagement: Don’t underestimate the impact of good user referrals — engagement on community forums like Reddit, Stack Exchange can draw in long-term customers
Outreach: Putting in the ground work with direct sales outreach can drum up good business for a startup — reaching out to potential customers, showing up at the right industry events, or even offering free trials to business users
Marketing Budget Forecast
Tracking and measuring the results of each channel will help you refine your marketing strategy over time, but you still need to predict costs in your business plan, especially if you’re seeking funding.
If you’re planning on spending $10,000 on marketing in the first year, estimate what percentage of that will be allocated to each channel, along with the expected sales returns.
Monetization Strategy
Perhaps one of the most important parts of your business plan is your monetization strategy. Simply put, who’s paying, what are they paying for, and how is the purchase happening?
When it comes to apps, there are a dozen models to choose from: paid app downloads, in-app purchases, subscriptions, advertising, freemium upgrades, commissions, and more. Your goal is to figure out which method will work best for your audience.
Financial Planning and Business Structure
The final sprint in the planning stage is one of the most important. This section will cover the financial projections for your business and the organization structure of your company.
Financial Plan
Before you dive in headfirst, you need to make a financial plan — to ensure the decision you’re making is financially sound. Investors will read this section very closely because it outlines the potential return on investment.
A standard financial plan should include:
Projected income statement: forecasts revenues, expenses, and profits/losses over time
Cash flow projection: charts how cash will flow into and out of the business, highlighting times when the company will need capital investments
Balance sheet projection: shows any assets or liabilities the business may have
Break-even analysis: identifies when the business revenue will meet its costs
Funding needs: clearly states the investment requirement and where the money will be utilized
Startup Costs and Funding Needs
As a startup, you need to be incredibly candid in your fundraising. Give investors a clear picture of how much money is required to get your app off the ground and through the initial launch phase. This number should include one-time costs and recurring expenses till you reach a break-even point.
If you’ve already invested some of your own money or sweat equity, mention that too — investors appreciate when founders show commitment to their idea.
Revenue Projections
This section outlines how you expect your revenue to grow over time. Often, revenue projections use estimates based on the payment model, market size, pricing tiers, and expected user growth over a few years.
If you’re planning on changing monetization methods or pricing figures over time, factor those changes into your calculation. Acknowledge any losses you expect in the initial years, as long as you’re trending towards profitability.
Cash Flow and Profitability
While revenue projections get a lot of attention, cash flow is arguably even more critical for a business’s survival. Positive cash flow means you have money in the bank to cover expenses. You could be growing revenue, but still run out of cash if revenues lag expenses, or there are massive upfront costs.
This section should discuss how you will manage cash and when you expect to achieve profitability (if at all) within the projection period.
How to Choose the Best Business Structure for Your App
A practical aspect for any new venture is deciding on a business structure. For many startups, the most obvious choice is starting an LLC (Limited Liability Company). These offer incredible flexibility and protect your personal assets from business liabilities — including shielding founders from being personally sued for app-related issues.
That said, if you’re planning on seeking venture capital or issue equity, you’ll need to set up a C-Corp. These allow easy issuance of preferred shares and a flexible ownership structure. You can also start off with an LLC, transitioning to a C-Corp later to accommodate equity investors.
Other options include a sole proprietorship — which doesn’t offer liability protection. If there are two or more founders, you can initially operate as a partnership, but switching to an LLC or corporation helps establish clear ownership shares and stronger protections.
Release: Finalizing and Presenting Your Business Plan
Now that you’ve put together your complete business plan, all that’s left is perfecting your presentation and sharing it with shareholders. Think about how you’re going to frame your insights to make the biggest impact on investors, partners, and team members.
Preparing Your Pitch and Executive Summary
While having a comprehensive business plan in hand is extremely important, when it comes to pitching your plan, you need to be concise and incredibly compelling. That’s where a tight executive summary comes in — tailored to your audience.
For investors: focus on the market opportunity and potential ROI
For partners: highlight the impact and product synergies
An ideal pitch deck should cap at 10 to 15 slides that capture the problem, solution (app), market, business model, team strengths, and financial ask. Combine that with an elevator pitch and you’re good to go!
Final Review Checklist
Before sharing your business plan and final pitch with the world, conduct a thorough review using a checklist.
Clarity: Does each section flow smoothly into the next? Does the problem statement naturally lead to the solution? Does the market analysis support the strategy sections?
Completeness: Have you covered all major sections? That includes the executive summary, company description, market analysis, marketing strategy, monetization, and financials.
Consistency: Do all facts, figures, and claims make narrative sense? Is your document consistent in its themes, formatting, and structure?
Sharing Your Business Plan with Stakeholders
When sharing the actual document, you may want to make format changes for each stakeholder. If you’re sending the plan to potential VC investors, they often prefer a pitch deck first. In discussions with potential partners or advisors, lead with relevant excerpts of the plan, e.g., market analysis and strategic fit, rather than the full financials.
Evolution: Improving Your Plan Post-Launch
Congratulations — you’ve launched your app and presented your plan. But the journey doesn’t stop there, post-launch is when reality tests your plan. The assumptions you made will meet actual market feedback and based on the response you may need to change some things around.
When and How to Revisit Your Plan
Regularly reviewing your plan at the end of every quarter keeps your finger on the pulse and makes sure you’re aligned with market responses. Another good rule of thumb is to revisit the plan when you reach major milestones, e.g. when your MVP reaches 10,000 users or your seed funding comes through.
Changes in the market can also spark internal pivots. These strategy changes are important if you want your business to be resilient in an ever changing landscape. The worst case scenario of course is if your actual revenues or expenses are far off from your projections. This is a surefire sign you need to update your financials.
Incorporating Feedback from Users and Investors
After launch there are only two opinions that matter — feedback from your users and investors. Users will tell you what they value in your app and what they don’t, whether directly through reviews and customer support queries, or indirectly through usage analytics. Its up to you to collect and incorporate user feedback to grow the success of your app.
Investors will also point out concerns or flag issues with quarterly metrics or with your operational plan.
Adapting to Market Shifts
If there’s a shift in the market, whether with a big competitor or a change in regulations, its likely going to have an impact on the results of your business plan. Proactively adapting your strategy to prepare for external changes helps you stay agile and avoid problems down the line.
Maintaining and Using Your Business Plan for Ongoing Growth
Its important to remember that creating a business plan is more than an academic exercise. This research will help guide the direction of your strategy and define a workable operational outline.
Using the Business Plan for Strategic Alignment
As you grow your startup, the business plan will help you ground decision making across departments, so everyone’s working towards the same overarching goals. At its core, this plan will help you align initiatives and avoid siloed thinking.
Keeping Investors and Teams in Sync
Your business plan can be a central reference in keeping investors and team members in sync regarding where the company is heading and how its doing. When you’re building on your plan with investor updates, or quarterly update emails for all stakeholders the plan becomes a communication tool.
Measuring Plan Performance Over Time
Once you’ve planned and executed, the final step is measuring progress and learning from what you did. It’s the difference between a projected budget vs actuals in financial terms. Regularly comparing actual metrics for user growth, revenue, retention, etc. against projected numbers will help you track alignment between strategy and execution.
FAQs
How to write a business plan for an app?
A good business plan will set the direct for your startup, and should follow a 5-phase process — business model, market research, sales strategy, company description, and financial plan.
