In 2021, mobile phone users downloaded an estimated 230 billion apps, an increase of 63% from 2016. This extraordinary growth in mobile app development has led economists to believe that by 2025, mobile apps will generate over $613 billion in the US alone.
It is little wonder then that so many tech-savvy individuals attempt to develop and sell apps to make it big. And given mobile phone usage continues to rise, now is the perfect time to make your move.
With the potential of such lucrative results on offer, thousands of like-minded would-be entrepreneurs hope to develop the next big thing, and tech juggernauts such as Google and Apple are looking to buy apps and turn them into global hits.
And while the opportunity is always there to make considerable gains with the correct marketing strategy, dogged determination, and a little bit of luck, the ultimate reward for the amount of time and effort put into the app may not always correlate. Indeed, a report from App Annie found that of the 21 million apps published, only 233 made more than $100 million in 2021.
If you’re looking to get started, you need to understand the steps and strategies that will help turn your app idea into a source of revenue.
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Key takeaways:
- Considerations to make when developing an idea for an app.
- Outline the steps required when building your apps.
- Generate revenue and reputation for your app.
- Why you shouldn’t contact Apple, Google, or Facebook?
- Strategies that will help you to sell an app.
How to formulate an app idea?
The American chemist and Nobel Peace Prize recipient Dr. Linus Pauling once stated that “the best way to have good ideas is to have lots of ideas.”
You might be one of those people that wakes up in the middle of the night with thoughts racing through their heads. You may believe your business concept is “the next big thing.” After all, every app started as a notion. So how, then, do you determine if your “good idea” will create revenue?
Source: Credencys
Does your idea solve a problem?
Take a look at technological success stories, and you will see that almost all of them have one thing in common; they solve an issue or make the user’s life easier. For example, Spotify brought the worlds of music streaming and record labels together, and Netflix changed the rules regarding access to movies and TV shows.
When considering your idea for an app, if it solves nothing, it may be classified as a quirky novelty with no real-world value. Although this type of app may still sell (no one can predict what will take the market), there are far more practical, proven strategies.
Start by considering the issues you face in your own life. Are there times when you are consistently bothered by something where you’ve wished there was an app that could eliminate the problem?
If it’s an issue that bothers you, then there is a high chance it will bother thousands of other people. So this should be a critical early consideration of the development process when designing an app from scratch.
Is there a gap in the market for my app?
Before diving head-first into an idea, you need to understand your intended market. Market research is a vital early step for any business enterprise, and mobile apps are no different.
The mobile app market is unpredictable, and so without this aspect of your due diligence, you’re unlikely to get anywhere. With the sheer number of apps available, the chances of your app standing alone with no competitors are slim.
You can start by checking out the various app stores to see if there is already a similar app. Next, find successful apps in your target market and examine how they got to their position and what they’re doing well. Finally, gauge the market size to determine whether there will be room at the table for your app.
It isn’t just your competition you will need to be aware of. Customers are the lifeline of any business, so you must evaluate precisely where they are and what they are buying. Google Trends and Google Keyword are free tools to determine potential interest levels for your app.
How do I craft an app proposal?
You are now in a position where you have reduced your many app concepts to a single one with real-world value and practicality that can fill a market gap. Now you must flesh out the idea.
Now you must decide what will differentiate your app as this is what your selling point will be. You should have a clear grasp of your app and the problems it can solve. You’ll be aware of your competitors and what they have to offer.
A minimum viable product (MVP) should form part of this app development process. An MVP, concerning mobile and web apps, is where the designer identifies the key features and functions of the app that they will need to develop. An MVP can often save vital time and money when used with user feedback to finetune what people will want from the app.
Source: Net Solutions
The more detailed your business plan is at this stage, the better chance you will have when it comes to selling your app idea and vision to app developers and potential investors. You should ideally know the potential scope of the app, the target audience, the cost to build the app and product engineering, and the timescales involved in growing your app.
How to build your idea into an app?
You have your idea. You have conducted the necessary market research into your competitors and your customers. You know what will set your app apart from the competition, and you have a clear business concept of your vision. What do you need to do next to build an app?
How do I put together a development team?
Unless you have spent many hours learning how to code, market, and sell, you will almost certainly need to build a dedicated team to help you at this stage. Very few businesses can take off under the guidance of a single founder, as most people do not have the vast breadth of skills to pull it off.
Coders and developers
These are the people who will write the source code that will turn your idea into a functioning product. Though most apps appear straightforward, many will have hours of nuanced code running in the background. Your coders will build the app and fix any subsequent bugs discovered during initial feedback and playtests.
You may wish to explore three main avenues when finding your ideal development partner:
- Freelancers: These are independent contractors who work for themselves, often found on Freelancer and Upwork. They will set their rates and schedules. Some freelancers may not have professional experience with a company and may not have gone through rigorous hiring, so the range of quality may be substantial.
- App development company: These companies will often offer services separate from the coding itself. They will provide consulting and project management services to aid with the process. As a result, they are often more expensive than freelancers.
- Programmers: A mix of the previous two, programmers often work for companies but will have a high level of control over the projects they take on. They will usually charge considerably more than freelancers.
Designers
Coders and developers are experts at creating the technical basis for an app. However, they might not be as skilled in app design, and instead, specialize in a particular area, for example, eCommerce design.
If you also lack that creative flair, you may wish to bring a designer on board. You can use many freelance databases to find your ideal designer, including Dribbble, a go-to stop for designers and creatives.
Source: Space-O Technologies
A reputable designer will frequently have a portfolio of previous client work that prospective partners can review to see whether their design preferences are compatible. Usually they will offer client testimonials as additional proof of their competence and skills. They may also have a blog page or website with posts detailing their process and knowledge.
Investors
No matter how incredible an idea is, it won’t get off the page without money to pay for your coders and designers and ongoing development costs. This is when the investors and the raising of capital enter the picture.
There are several ways to reach investors and raise capital for your app:
- Startup platforms.
- Business angels networks.
- Crowdfunding.
- Business incubators.
- Professional social networks and individuals.
- Private equity markets.
- Bank loans.
Most investors will expect to see a detailed proposal and proof of concept before considering coming on board.
Protecting your idea
A vital consideration you will need to make when you bring in additional people to work on your app is how you go about protecting your intellectual property. It is also prudent to put steps before any significant app development.
You can protect any information and data for your app by having all relevant parties sign a Non Disclosure Agreement (NDA). It is a way to ensure all information remains legally confidential. You must protect your intellectual property rights across all aspects of the app’s construction.
For example, a developer has the right to their coding and can use it for an iteration of your app idea if it is not made explicitly clear that all content, designs, and code developed for the project are your intellectual property. This should take the form of a legally binding contract, which you can draft yourself or obtain through a business solicitor.
How to market your mobile app?
You have now thoroughly tested your app. It looks great, and you have been able to secure the initial funding needed to bring the app to life. Now it’s time to get it in front of the people who will most likely use your app and recommend it to others.
This opening phase of marketing and building an audience is essential if you wish to sell the app to the likes of Google Play and the iOS App Store. The following are key app marketing strategies you may want to implement before and after your app launches.
Before the launch
Business owners can often generate considerable interest in a product or service even before the project fully comes to fruition. So while your developer team is hard at work putting together the codes and designs for the app, you can take several easy steps to drum up interest within your potential market base:
- Build an app landing page: Landing pages are not the same as websites. They are standalone pages found at the end of a link that contains all the critical information about your app and what the visitor has to look forward to. You can use landing page creation sites such as Unbounce to develop this valuable marketing tool.
- Build an email list: As part of your landing page, you should create a call to action to encourage visitors to register their email addresses so that they will be notified when the app launches. This should give your app some traction from day one.
- App Store Optimization (ASO): App Store apps are ranked by their ASO score. You can boost your ASO score through strategies such as keyword optimization within your metadata, app conversion rates, and App Store creatives such as preview videos and engaging screenshots.
- Include a media kit: Journalists and social media influencers can have a great deal of sway when driving traffic to your app. You can make things easier for them by including a media kit as part of your landing page, which will contain the information and logos for your app that journalists can use for their reporting.
After the launch
Once testing and feedback sessions for the app are complete, you are finally ready to launch the app. First, though, there are further marketing steps you may wish to take to maximize your revenue and reach.
- Email your pre-launch list: It is likely those people who signed up to receive a notification when your app launches are already aware, particularly if they have been receiving product updates via a newsletter. However, making a big launch announcement to those who came on board early can’t hurt.
- Create a press release: If you have networked with journalists and other online publications before launch, there is a chance they will be interested in publishing a press release about your product. These are often cost-effective ways of grabbing some additional attention.
- Utilize paid marketing: While organic growth is the preferred option, you may wish to invest in some paid marketing if your budget allows. A Facebook ad could be a good option, with a reported cost-per-click increase of 13% compared to 2020.
- Get early adopters: You can find early adopters online through various communities such as Reddit, BetaList, Product Hunt, Indie Hackers, Quora, and Hacker News.
How to sell an app?
So now, we’ve arrived. Your app has been on the market and is selling well. You are bringing in revenue from in-app purchases. You have a loyal customer base, but you feel you’ve taken the app as far as you’re willing to go and want to pursue new endeavors. It’s time to sell your app.
There are several avenues you can follow. However, before starting the sales process, you need to consider the following.
Transfer criteria
When you choose to sell your app, you are essentially transferring it over to a new developer’s account, where they can manage and develop the app. However, not all apps are eligible for transfer.
An app will need one of the following statuses:
- Ready for sale.
- Prepare for submission.
- Developer removed from sale.
- Invalid binary.
- Developer rejected.
- Rejected.
Additionally, no version of the app can use iCloud entitlement, the app must have had at least one version released to an App Store, and no version of the app can use Passbook entitlement.
You can read here for a full list of criteria.
How much can you sell an app for?
Naturally, the rewards for your efforts are often the first thing you might think of when you’ve decided to sell their mobile app.
Source: Flippa
Though the overall process of determining a pricing model is far more detailed, you can estimate your app’s worth by applying a one (x12) to five-year (x60) forecast multiplier to your net revenue. It is logical to start with the highest range to ensure you are not selling yourself short.
So if, for example, your net revenue per month is $4,000 (x60), your initial starting valuation over five years might come in at $240,000. Once you have established the value, it will then be down to the buyer to determine why this highest range is not a suitable price for the sale.
If your app is less than a year old and cannot fulfill the lowest forecast multiplier, there will likely be a sharp drop in the number of potential buyers. They will need as much reassurance and evidence as possible that what they are purchasing has long-term staying power or potential. Other factors, such as high traffic and revenue diversity, will appeal to many buyers.
As an alternative, you can use Flippa’s online business valuation tool, which will give you a far more detailed breakdown of your app’s valuation.
Can I sell my app to Apple, Google, or Facebook?
The dream scenario is for this to happen. Voice recognition software Siri was rumored to have been sold for around $200 million, netting its investors and developers huge profits.
However, the reality is that these tech giants will only want to purchase apps that will give them a significant advantage over their competitors. It goes back to the first consideration you took when starting this journey. Does the app solve a problem or issue?
If the issue is a resounding yes, and you have the evidence to back this up, then perhaps they will take note of your app and make you an offer.
Tip: It is also unwise to contemplate selling your app idea to one of the big players. If you submit an idea to either Apple or Google and either company takes a liking to it, they will be able to claim it as their own in line with their Unsolicited Idea Submission Policy.
How to sell an app to a company?
There are many alternatives to selling your app to one of the big three. Marketplaces like Flippa are always looking for new customer acquisition apps, services, and products.
Flippa acts as a mediator between buyers and sellers. If you are looking to go down this route, you will need to list your app as being for sale. In a similar vein to App Store Optimization, the more details you can provide potential buyers, the more interest you will likely generate.
Operations, financial performance, track records, and proof of revenue are critical factors in proving that your app is a quality acquisition. If these are clearly defined, you will find your app higher up the listings.
Other companies are looking to bolster their portfolios and consider buying apps directly from the owner. If one of these companies approaches you, you can choose to enter the negotiation process.
Negotiations
If you are inexperienced when dealing with negotiations or have no team member well versed in the process, you should always seek independent advice beforehand. App brokers can also provide guidance, but unlike real estate, they are not duty-bound to favor you in the negotiations.
Buyers will always look for the best deal, and some may not hesitate to take advantage of owners keen to make the sale. A knowledgeable negotiator or someone should be able to appraise the app accurately and provide a logical estimate price. This will give you something to work with regarding the first offer, which will likely be lower than the evaluation.
Summing up
Selling apps doesn’t have to be stressful. If you are well versed in the art, there is enormous potential for profits and monetary gains. Ultimately, only you will have the power to determine the final destination for your app.
At Flippa, we have provided an online marketplace for buyers and sellers to trade since 2009. As a result, we are now the world’s leading platform for all forms of digital media and assets to grow and thrive. If you believe you have an app ready to sell, contact us today, and let’s get started.
Frequently asked questions
What programming languages should I use to build an app?
For mobile app design, it is crucial to develop your app in a technology that is widely being used by developers. Ultimately, it may come down to the specific functionality that an app needs and one programming language may be able to handle it better than another.
With that being said, it is vital for entrepreneurs to explore trends. For example, some developers prefer agile development; whereas others might prefer the waterfall approach to app building.
How to sell your mobile app?
There are plenty of ways to sell a mobile app such as being acquired by a large company, selling your app to a competitor, or through a private sale.
You can also sell your app on Flippa, a global online marketplace where individuals and business owners buy and sell websites, online businesses, apps, and digital real estate.
The selling price will largely depend on your app metrics, valuation, revenue, and the competitiveness of your business model.
