5 Tips on Managing Budget for App Development
The first stage of any project is to develop a business plan and establish a budget. If your calculations are imprecise, the whole project will be at risk of failure. That’s why it’s vital to think over every detail that concerns your application.
In this post, we will go through some essential pieces of advice on budget planning.
Settle a well-defined plan
Do you have a clear understanding of what should be implemented in your app? If the answer is no, then you’d better decide with the plans for your app wisely, because developers and designers will do their job depending on your expectations.
Now, let’s get to the steps that define the mobile app development cost.
Decide on the objectives of your app
There can be unlimited amounts of reasons to create an application. Features and strategies for your application may vary under certain circumstances. Do you want to build an app to promote your existing brand? Or maybe you have an innovative idea that will change the market? Perhaps you even want to make an application that will engage customers? By the way, Nike+ running app that promotes Nike in digital spaces is a great example. Whatever your plans are, you should keep clarity. If the outcome doesn’t match your expectations because of the blurry explanation given, you won’t be able to return the wasted time and money.
Select a platform
It’s not a secret that the more platforms you want to cover, the more clients you involve. But the overall price of development grows exponentially with every platform you include to your order.
The most balanced decision to make is to analyze your target audience and develop applications for the platforms that are in demand among them.
Decide on hiring options
Here are two courses of events. The first option is to employ in-house developers. This decision provides you with full control over the development process and the possibility to plan your future projects with the same team. On the other hand, the internal team leads to a lot of side expenses. Firstly, you have to hire professionals and examine their skills. Moreover, you have to provide your team with an office equipped with hardware and software. Small startups sometimes can’t afford to make such investments.
As for the other option, you can resort to services of an outsourced development company. If you find the right company to cooperate with, you’ll get the final product of high quality. A number of small startups followed the path of outsourcing development.
Come up with the list of features
As it was said before, you should think about the functionality beforehand. It’s better to make a list of features to understand what kind of problems your app is meant to solve. That will help you to clarify your requirements for developers.
Manage your resources reasonably
We must not be blind to the fact that application is the same kind of business just like any other. So, investors expect to get revenue from it. That’s why you should know the estimated time app needs to pay off the expenses and efforts. That will give you an opportunity to plan on your next project or invest in upgrading the current one.
That’s it for the hints to help you measure your budget. Yet, there are also marketing expenses that significantly influence app success.
Why bother with promotion
Any ready-to-use app with beautiful design, first-class optimization, and useful features worth nothing without the proper marketing. Of course, the application is great, but how do people find out about it? Right now, there are around 2.2 million applications in the Apple App Store and approximately 3 million in Google Play. Chances of accidental take-offs are extremely low.
The majority of users don’t waste their time exploring the depths of app stores, so they just look through the list of top app ratings. That’s why, if you intend to gain a huge part of the audience, you’ll have to compete for the top positions.
Of course, that’s not the only way of promotion. You can use promotional emails, targeted ads, etc. All of these will help to draw the audience as well.
The calculation for the marketing budget
Estimating the marketing budget is as important as the application budget. Let’s run through several tips on paid advertising.
Paid promotion delivers significant profit to attracting new users.
Evaluate the number of installs.
As it was mentioned, the top 10 apps provide you with plenty of users. Algorithms are set up to calculate the number of installs and rate them accordingly. Thus, you have to do research to understand how many resources you can spend to achieve a proper amount of installs. For example, to get to the top 10 in the Music category in the US region in the App Store, you have to generate about 111,550 daily installations.
Calculate the cost per install
CPI, or cost per install, indicates the price required by the promotion to generate one installation. This metric includes any expenses on drawing users to your application. The average price varies from $1,2 to $1,6 per user. By doing simple math, we can figure out that our music app mentioned above, with the CPI of $1.2, will need $133,860 of daily investments. But to attract more users, you have to hold your position for at least a couple of days. So, let’s take three days, and we get $401,580.
Generate the installs
Now about the ways to generate CPI.
The first option is to hire marketing analysts. These specialists will test the effectiveness of the ads on different platforms like Facebook, Twitter, etc. Then, they launch the campaign and track the traffic, analyze the location of users, the average duration of a session, etc. Eventually, you’ll get statistics that describe the correspondence of your target audience with each platform.
Another solution is to use an automated service for the promotion of an application. They can analyze user behavior patterns and define the platforms that contain focus groups for your app.
Wrapping up
All things considered, the budget is the primary thing for every project. Whether you want to add any feature or launch the marketing campaign, each of these actions brings up budget issues. So, in order to avoid failures, use these pieces of advice, and adopt your budget reasonably.
