23 data to include in the business plan of your mobile app development project

This article was written by our expert who is surveying the industry and constantly updating the business plan for a mobile app.

Our business plan for a mobile app will help you build a profitable project

Ever pondered what the ideal user acquisition cost should be to ensure your mobile app remains competitive and profitable?

Or how many daily active users you need to maintain to achieve your revenue milestones?

And do you know the optimal retention rate for a subscription-based app to sustain growth?

These aren’t just interesting figures; they’re the metrics that can determine the success or failure of your app.

If you’re crafting a business plan, investors and venture capitalists will scrutinize these numbers to gauge your strategy and potential for success.

In this article, we’ll explore 23 critical data points every mobile app business plan should include to demonstrate your readiness and capability to thrive in the market.

User acquisition cost should ideally be below $1 per install to ensure scalability

A lot of hair salon businesses might not seem related to mobile apps, but they both need to keep costs low to grow effectively.

For a mobile app, keeping the user acquisition cost below $1 per install is crucial because it allows the app to scale without burning through its budget too quickly. If the cost is higher, the app might struggle to achieve a positive return on investment as it grows, which can limit its ability to expand and reach more users.

However, this ideal cost can vary depending on the app's target audience and the specific market it operates in.

For instance, apps targeting a niche market or offering a unique value proposition might justify a higher acquisition cost if they can ensure higher lifetime value from each user. On the other hand, apps in highly competitive markets might need to keep costs even lower to stand out and attract users effectively.

User retention rate should be at least 40% after 30 days to indicate strong engagement

Insiders often say that a user retention rate of at least 40% after 30 days is a strong indicator of engagement for a mobile app.

This benchmark suggests that users find the app valuable enough to return, which is crucial for sustained growth and profitability. A retention rate below this threshold might indicate issues with the app's user experience or content.

However, this 40% figure can vary depending on the app's category and target audience.

For instance, a gaming app might aim for higher retention rates due to the competitive nature of the industry, while a niche app serving a specific need might be satisfied with a slightly lower rate. Ultimately, understanding the specific context and goals of your app is key to interpreting retention metrics effectively.

An average app session length of 5-10 minutes is a sign of high user engagement

Most people overlook the fact that an average app session length of 5-10 minutes often indicates high user engagement.

This duration suggests that users find the app's content or functionality compelling enough to hold their attention for a significant period. It also implies that the app is providing value or entertainment that keeps users coming back.

However, the ideal session length can vary depending on the app's purpose and target audience.

For instance, a news app might aim for shorter sessions as users quickly catch up on headlines, while a gaming app might expect longer sessions as users get immersed in gameplay. Understanding these nuances helps developers tailor their strategies to optimize user experience and meet specific engagement goals.

Push notification opt-in rates should be above 60% to maximize re-engagement opportunities

It's worth knowing that push notification opt-in rates above 60% are crucial for maximizing re-engagement opportunities in a mobile app.

When users opt-in to receive notifications, it allows the app to maintain a direct line of communication with them, which is essential for keeping them engaged. High opt-in rates mean that a larger portion of your user base is open to receiving updates, promotions, and reminders, which can significantly boost user retention and app usage.

However, the ideal opt-in rate can vary depending on the type of app and its target audience.

For instance, a news app might naturally have higher opt-in rates because users expect timely updates, whereas a gaming app might need to offer incentives to encourage opt-ins. Understanding your audience's preferences and tailoring your notification strategy accordingly can help you achieve and maintain that 60% benchmark, ensuring that your app remains a valuable part of your users' daily lives.

In-app purchase conversion rates should be at least 2-5% for freemium models to be profitable

Maybe you knew it already, but for a freemium mobile app to be profitable, in-app purchase conversion rates should ideally be between 2-5%.

This is because the freemium model relies on a small percentage of users making purchases to support the app's development and maintenance costs. If the conversion rate is below 2%, it becomes challenging to cover these costs, especially if the app has a large user base that doesn't contribute financially.

On the other hand, a conversion rate above 5% can indicate a highly engaged user base, which can lead to increased revenue and potential for growth.

However, these rates can vary depending on the app's target audience and market segment. For example, niche apps with a dedicated user base might achieve profitability with lower conversion rates, while apps in highly competitive markets may need higher rates to stand out and succeed.

Monthly active users (MAU) to daily active users (DAU) ratio should be around 20-30% to indicate healthy user activity

Believe it or not, the ratio of Monthly Active Users (MAU) to Daily Active Users (DAU) is a crucial metric for assessing the health of a mobile app.

A ratio of around 20-30% typically indicates that users are engaging with the app consistently, which is a sign of a healthy user base. This means that a significant portion of your monthly users are also using the app on a daily basis, suggesting that the app is integral to their routine.

However, this ratio can vary depending on the type of app and its intended use.

For instance, a social media app might have a higher DAU/MAU ratio because users tend to check in multiple times a day, while a utility app might have a lower ratio as it's used less frequently but still serves its purpose effectively. Ultimately, understanding the specific context of your app and its user behavior is key to interpreting this metric accurately.

An app's crash rate should be below 1% to ensure a smooth user experience

Experts say an app's crash rate should be below 1% to ensure a smooth user experience because frequent crashes can lead to user frustration and abandonment.

When an app crashes often, it disrupts the user's interaction, causing them to lose progress or data, which can be incredibly frustrating. This negative experience can lead to poor reviews and a decrease in user retention, ultimately affecting the app's reputation and revenue.

Maintaining a crash rate below 1% is considered a benchmark for quality, as it indicates that the app is stable and reliable for most users.

However, this threshold can vary depending on the app's complexity and user base. For instance, a simple app with basic functionality might be expected to have a much lower crash rate, while a more complex app with advanced features might be given a bit more leeway, though still striving to stay under the 1% mark.

Apps should aim for a break-even point within 12-18 months to be considered viable

Few hair salon businesses' success can be compared to the fast-paced world of mobile apps, where reaching a break-even point within 12-18 months is often seen as a benchmark for viability.

In the competitive app market, achieving this timeline indicates that the app has gained enough traction and user engagement to cover its initial development and marketing costs. This period is crucial because it reflects the app's ability to generate sustainable revenue and adapt to user needs.

However, this timeline can vary depending on the app's business model and target audience.

For instance, apps with a subscription-based model might take longer to reach break-even due to the time needed to build a loyal user base. On the other hand, apps that rely on in-app purchases or advertising might achieve this milestone more quickly if they can effectively monetize their user engagement.

An app's average rating should be above 4.0 on app stores to attract new users

Please, include that in your business plan. An app's average rating should be above 4.0 on app stores to attract new users because it serves as a quick indicator of quality and reliability.

When potential users browse app stores, they often use ratings as a filter to decide which apps to download, and a rating below 4.0 might suggest subpar performance or user dissatisfaction. A higher rating can also enhance trust and credibility, making users more likely to choose your app over competitors.

However, the importance of maintaining a high rating can vary depending on the app's category and target audience.

For instance, niche apps with a dedicated user base might not be as affected by a slightly lower rating, as their users may prioritize specific features over general appeal. On the other hand, apps in highly competitive categories, like games or social media, often need to maintain a rating above 4.0 to stand out and attract new users effectively.

Feature adoption rate should be tracked, with key features seeing at least 50% usage among active users

A precious insight for you, tracking the feature adoption rate in a mobile app is crucial because it helps determine which features are truly valuable to users.

When key features see at least 50% usage among active users, it indicates that these features are meeting user needs and enhancing the app's overall value. This level of adoption can also signal that the app is intuitive and that users are finding it easy to discover and use these features.

However, the ideal adoption rate can vary depending on the app's purpose and the specific feature in question.

For instance, a social media app might expect higher adoption rates for messaging features, while a finance app might see lower rates for advanced analytics tools. Understanding these nuances helps developers focus on improving or promoting features that are underutilized, ensuring that the app continues to evolve in a way that aligns with user expectations and needs.

Churn rate should be below 5% monthly to maintain a stable user base

This is insider knowledge here, but keeping a churn rate below 5% monthly is crucial for maintaining a stable user base for a mobile app.

If your app is losing more than 5% of its users each month, it becomes challenging to sustain growth because you're constantly trying to replace those lost users. A high churn rate can lead to increased marketing costs and a focus on user acquisition rather than improving the app itself.

On the other hand, a churn rate below 5% indicates that users find value in your app and are likely to stick around, which is essential for long-term success.

However, the ideal churn rate can vary depending on the type of app and its target audience. For instance, a niche app with a dedicated user base might sustain a slightly higher churn rate, while a mass-market app should aim for even lower churn to remain competitive.

Apps should allocate 10-15% of their budget for continuous user testing and feedback integration

Most of the hair salon businesses' success hinges on understanding and adapting to customer needs, and mobile apps are no different.

Allocating 10-15% of the budget for continuous user testing and feedback integration ensures that the app remains user-centric and relevant. This investment helps in identifying pain points and areas for improvement, leading to a better user experience.

In the fast-paced world of mobile apps, user preferences and technology trends change rapidly, making it crucial to stay updated.

However, the percentage of budget allocation can vary depending on the app's complexity and target audience. For instance, a simple utility app might require less frequent updates compared to a social media platform that needs constant engagement and feature updates.

An app's load time should be under 2 seconds to prevent user drop-off

Not a very surprising fact, but an app's load time should be under 2 seconds to prevent user drop-off because users today expect instant access to information and services.

When an app takes longer than 2 seconds to load, users often become impatient and may abandon the app altogether. This is especially true in a world where attention spans are shorter, and users have numerous alternatives at their fingertips.

However, the ideal load time can vary depending on the type of app and its intended use.

For instance, a gaming app might be given a bit more leeway if users anticipate a rich, immersive experience that justifies a slightly longer load time. On the other hand, utility apps, like banking or weather apps, are expected to load almost instantly because users rely on them for quick, essential information.

Subscription-based apps should aim for a lifetime value (LTV) to customer acquisition cost (CAC) ratio of 3:1

This valuable insight suggests that subscription-based apps should aim for a lifetime value (LTV) to customer acquisition cost (CAC) ratio of 3:1 to ensure sustainable growth and profitability.

Essentially, this means that the revenue generated from a customer over their entire relationship with the app should be three times the cost of acquiring them. This ratio helps ensure that the app is not only covering its acquisition costs but also generating enough profit to reinvest in growth and improve the app's offerings.

However, this 3:1 ratio is not a one-size-fits-all solution and can vary depending on the app's specific market, competition, and business model.

For instance, apps in highly competitive markets might need a higher ratio to account for increased marketing expenses, while niche apps with less competition might be able to sustain a lower ratio. Additionally, apps with a high churn rate may need to focus on improving customer retention to achieve the desired LTV/CAC ratio, whereas apps with a strong brand loyalty might naturally maintain a healthy ratio.

Apps should reserve 5-10% of revenue for server and infrastructure maintenance annually

This insight suggests that apps should reserve 5-10% of revenue for server and infrastructure maintenance annually because it ensures the app remains reliable and efficient.

Regular maintenance is crucial to address security vulnerabilities and to keep up with technological advancements. By allocating a portion of revenue, app developers can ensure they have the resources to perform necessary updates and improvements.

The percentage of revenue reserved can vary depending on the complexity of the app and the volume of users.

For instance, apps with a large user base or those that handle sensitive data might require more frequent updates and thus a higher budget. Conversely, simpler apps with fewer users might manage with a smaller allocation.

Effective app store optimization (ASO) can increase organic downloads by 20-30%

This data does not come as a surprise.

Effective app store optimization (ASO) involves enhancing various elements of an app's listing, such as the app title, keywords, and visual assets, to improve its visibility in the app store. By optimizing these elements, an app can rank higher in search results, making it more likely for users to discover and download it.

When an app is more visible, it naturally attracts more organic downloads, which can lead to a 20-30% increase in downloads.

However, the impact of ASO can vary depending on factors like the app's category and the level of competition within that category. For instance, an app in a highly competitive category might see a smaller percentage increase compared to an app in a niche category, where optimization efforts can have a more pronounced effect.

A successful app should have a feature update cycle of 4-6 weeks to keep users engaged

Yes, a successful app should have a feature update cycle of 4-6 weeks to keep users engaged.

Regular updates show that the app is actively maintained, which builds trust and reliability among users. This frequency also allows developers to respond to user feedback and fix any issues promptly, enhancing the overall user experience.

However, the ideal update cycle can vary depending on the app's nature and target audience.

For instance, a gaming app might need more frequent updates to introduce new levels or events, while a utility app might focus on stability and performance improvements. Ultimately, the key is to balance between introducing new features and maintaining the app's core functionality, ensuring that updates are meaningful and not just for the sake of change.

Apps should aim for a 20-30% increase in average revenue per user (ARPU) year-over-year

Did you know that apps should aim for a 20-30% increase in average revenue per user (ARPU) year-over-year?

This target is crucial because it reflects the app's ability to not only retain users but also to monetize them effectively. By focusing on ARPU growth, app developers can ensure that their app remains financially sustainable and competitive in a rapidly evolving market.

However, the ideal ARPU growth rate can vary depending on the app's specific niche and business model.

For instance, subscription-based apps might see a more consistent ARPU increase due to recurring revenue, while gaming apps could experience fluctuations based on in-app purchases and seasonal trends. Ultimately, understanding the unique dynamics of your app's market and user base is key to setting realistic and achievable growth targets.

An app's user interface (UI) should be intuitive enough to require no more than 3 taps to reach any primary feature

This data suggests that an app's user interface (UI) should be intuitive enough to require no more than 3 taps to reach any primary feature because it enhances the overall user experience by making navigation quick and efficient.

Mobile users often seek immediate access to features due to the nature of on-the-go usage, and a streamlined UI helps in achieving this. If users have to tap through multiple screens, they may become frustrated and abandon the app, leading to a higher churn rate.

By limiting the number of taps, developers ensure that users can easily find and use the app's core functionalities, which is crucial for maintaining user engagement.

However, this guideline can vary depending on the complexity of the app and its target audience. For instance, a professional-grade app with advanced features might require more taps, but it should still strive to keep navigation as simple as possible to avoid overwhelming users.

Apps in competitive markets should allocate 15-20% of revenue for digital marketing and user acquisition

This data point suggests that apps in competitive markets should allocate 15-20% of revenue for digital marketing and user acquisition because it is crucial for maintaining visibility and growth in a crowded space.

In highly competitive markets, there are numerous apps vying for the attention of the same user base, making it essential to invest in effective marketing strategies to stand out. Allocating a significant portion of revenue to marketing helps ensure that the app can reach a wider audience and attract new users, which is vital for sustaining growth and staying ahead of competitors.

However, this percentage can vary depending on factors such as the app's stage of development and the specific market dynamics.

For instance, a newly launched app might need to spend more aggressively on marketing to build initial awareness and user base, while a more established app with a loyal user base might focus on retention strategies and spend less on acquisition. Additionally, apps in less competitive markets might not need to allocate as much to marketing, allowing them to invest more in other areas like product development or customer support.

Seasonal promotions can boost in-app purchases by up to 25%

Actually, seasonal promotions can boost in-app purchases by up to 25% because they tap into the excitement and urgency associated with specific times of the year.

During holidays or special events, users are often in a spending mood, making them more likely to engage with promotional offers. These promotions can create a sense of limited-time opportunity, encouraging users to make purchases they might otherwise postpone.

However, the effectiveness of these promotions can vary depending on the app's target audience and the nature of the promotion itself.

For instance, a gaming app might see a higher increase in purchases during a holiday-themed event, while a productivity app might benefit more from back-to-school promotions. Ultimately, the key is to align the promotion with the user's interests and the seasonal context to maximize its impact.

Establishing a bug fix turnaround time of less than 48 hours is a sign of strong technical management

It's very common for a mobile app to encounter bugs, and fixing them quickly is crucial for maintaining user satisfaction.

A bug fix turnaround time of less than 48 hours demonstrates strong technical management because it shows that the team is both efficient and responsive. This quick response time helps in minimizing the negative impact on users and ensures that the app remains reliable and trustworthy.

However, the ability to fix bugs within this timeframe can vary depending on the complexity of the issue.

For instance, a minor UI glitch might be resolved quickly, while a more complex issue involving backend systems could take longer. Additionally, the size and resources of the development team can also affect how quickly they can address and fix bugs.

Apps should maintain a current ratio (assets to liabilities) of 1.5:1 to ensure financial health.

A lot of mobile app developers aim to maintain a current ratio of 1.5:1 to ensure their app's financial health.

This ratio means that for every dollar of liabilities, the app has $1.50 in assets, providing a cushion to cover short-term obligations. By maintaining this ratio, apps can better manage unexpected expenses and ensure they have enough resources to invest in future growth opportunities.

However, the ideal current ratio can vary depending on the app's specific business model and industry.

For instance, a subscription-based app with steady cash flow might operate comfortably with a lower ratio, as it can rely on regular income to cover liabilities. On the other hand, an app in a highly competitive market might need a higher ratio to ensure it can quickly adapt to market changes and invest in innovation.