How to Start a Mobile App Business

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How to Start a Mobile App Business

Starting a mobile app business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn how to start an app successfully.

Importantly, a crucial step in starting a mobile app business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Mobile App Business Plan Template here.

15 Steps To Start a Mobile App Business

1. Choose the Name for Your Mobile App Business
2. Develop Your Mobile App Business Plan
3. Choose the Legal Structure for Your Mobile App Business
4. Secure Startup Funding for Your Mobile App Business (If Needed)
5. Secure a Location for Your Business
6. Register Your Mobile App Business With the IRS
7. Open a Business Bank Account
8. Get a Business Credit Card
9. Get the Required Business Licenses and Permits
10. Get Business Insurance for Your Mobile App Business
11. Buy or Lease the Right Mobile App Business Equipment
12. Develop Your Mobile App Marketing Materials
13. Purchase and Setup the Software Needed to Run Your Mobile App Business
14. Build Your Team
15. Open for Business

1. Choose the Name for Your Mobile App Business

The first step to starting a mobile app development business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your mobile app business:

1. Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check
   to see if a suitable domain name is available.
2. Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
3. Think about marketing. Come up with a name that reflects the desired brand and/or focus of your software company.

2. Develop Your Mobile App Business Plan

One of the most important steps in starting a mobile app business is to develop your mobile app business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

To enhance your planning process, incorporating insights from a sample mobile app business plan can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your business plan should include the following sections:

1. Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your mobile app business.
2. Company Overview – this section tells the reader about the history of your mobile app business and what type of mobile app business you operate. For example, are you building hybrid apps or native apps? Will your app be available for purchase from different app stores? Will it undergo app store optimization for Apple’s app store or another app store? Do you specialize in developing Android apps or iOS apps?
3. Industry Analysis – here you will document key information about the mobile app industry. Conduct market research and document how big the industry is and what trends are affecting it.
4. Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? What are their interests?
5. Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
6. Marketing Plan – your app marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product: Determine and document what products/services you will offer
• Prices: Document the prices of your products/services
• Place: Where will your business be located and how will that location help you increase sales?
• Promotions: What promotional methods will you use to attract customers to your mobile app? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing. You might also try to secure advertising on an app store to reach a larger audience or creating YouTube videos that showcase your user interface and all the features of your app.
7. Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
8. Management Team – this section details the background of your company’s management team.
9. Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your mobile app business make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

3. Choose the Legal Structure for Your Mobile App Business

Next you need to choose a legal structure for your mobile app business and register it and your business name with the Secretary of State in each state where you operate your mobile app business.
Below are the five most common legal structures:

1) Sole Proprietorship

A sole proprietorship is a business entity in which the owner of the mobile app business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a software company together. The partners share in the profits and losses of the business.

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a software company include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a software company is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your mobile app business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

4. Secure Startup Funding for Your Mobile App Business (If Needed)

In developing your mobile app business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a mobile app business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a mobile app business that they believe has high potential for growth.

5. Secure a Location for Your Business

You might choose to run your mobile app business from home or build a remote team. Alternatively, you might secure a physical location for your business.
To find the right space, consider:

• Driving around to find the right areas while looking for “for lease” signs
• Contacting a commercial real estate agent
• Doing commercial real estate searches online
• Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space

6. Register Your Mobile App Business With the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your mobile app business name. This process is fairly simple and involves the following steps:

1. Identify and contact the bank you want to use
2. Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
3. Complete the bank’s application form and provide all relevant information
4. Meet with a banker to discuss your business needs and establish a relationship with them

8. Get a Business Credit Card

You should get a business credit card for your mobile app business to help you separate personal and business expenses. You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

Every state, county and city has different business license and permit requirements.
Nearly all states, counties and/or cities have license requirements including:

• General Business License – This is the most common type of business license. It gives you permission to operate your business in a specific location.
• Sales Tax License – This type of license is required if you will be selling products or services that are subject to sales tax.

Depending on where you open your business and the type of apps you develop, you will have to obtain the necessary state, county and/or city licenses.

10. Get Business Insurance for Your Mobile App Business

Business insurance policies that you should consider for your mobile app business include:

• General Liability Insurance – This type of insurance can help protect the business if someone is injured or their property is damaged as a result of something the business did or failed to do.
• Product Liability Insurance – If the mobile app business sells products, this type of insurance can help protect against any injuries or damages that occur as a result of using the product.
• Workers’ Compensation Insurance – If the mobile app business has employees, this type of insurance can help protect against any injuries or illnesses that they may suffer while working for the business.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.

11. Buy or Lease the Right Mobile App Business Equipment

A mobile app business needs a computer, internet access, and software to create mobile apps. If you plan to have a physical location for your team, you might also need office supplies and furniture.

12. Develop Your Mobile App Business Marketing Materials

Marketing materials will be required to attract and retain customers to your mobile app business.
The key marketing materials you will need are as follows:

1. Logo – Spend some time developing a good logo for your mobile app business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. Your logo might also be displayed within the app. The right logo can increase customer trust and awareness of your brand.
2. Website – Likewise, a professional mobile app business website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how your target audience perceives you. A website is a good place to announce company news and app updates to new and existing app users.
3. Social Media Accounts – Establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your mobile app business. Social media pages are great for building communities of your users.

13. Purchase and Setup the Software Needed to Run Your Mobile App Business

There are a few software programs that a mobile app business needs in order to get started. One option is Appcelerator, which allows you to develop apps using JavaScript, HTML5, and Titanium. Another popular tool is PhoneGap, which helps you create cross-platform apps using HTML5 and JavaScript. Finally, you’ll need a development environment like Eclipse or Xcode in order to write code for your apps.

14. Build Your Team

A key component to starting most any business is to build a great team. This is especially true for mobile app businesses, which are heavily reliant on technology. You’ll need to assemble a team of talented engineers, designers, and marketers who can help you turn your vision into reality.

If you don’t have the necessary skill sets in-house, you’ll need to hire freelancers or consultants to fill the gaps. The most important thing is that you have a solid foundation of people who can bring your app idea to life.

15. Open for Business

You are now ready to open your mobile app business. If you followed the steps above, you should be in a great position to build a successful business and you will know everything you need about how to start an app business. Below are answers to frequently asked questions that might further help you.