When you are putting together a business plan for mobile app or
web based software service, there are certain key elements you should work into
your business plan.
The most useful and
standard projections estimate future unique visitors per month. Tracking this
number over time is essential. Visitors are also useful because the dedication
of repeat visits, which can be an asset. Hits, as we used to call them in the
1990s (numbers of pages accessed on site is also a useful Indicator, especially
when tracking overtime.
2. Churn. The Churn is an
indicator of what percent of fermium and what percent of paid subscribers drop
out per month. Some calculate the advantage months instead, gathering the
lifetime value per customers.
3. Conversation. A
conversation happens when a person browsing on the website chooses to subscribe.
Conversation per visit for fermiums, which offer a free basic version of the
product and for paid subscriptions is useful. Another useful projection is
conversation from fermium to pay.
This is including pay –per
click and other sale and marketing costs by the number of customers. That is your
customer acquisition costs.
5. Lifetime value of acustomer. This is closely related to churn. Multiply your average per subscriber
per month by the average number of months that a subscriber stays.
6. Burn Rate. This is an
estimate of how much money it takes, per month to stay in business. Includesalaries, overhead, marketing, etc.
7. Runway. This is stated
in month, as in how many month of burn rate are in the cash balances. We call
this runway as in we have a runway of nine month.
8. Revenues. The sales
forecast should already show revenues. I add it here because it is an important
and extremely useful indicator of business size and flow, it doesn't include
investment or loan, but does include shipping, subscriptions, sales and servicerevenues.
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