Consider this scenario: You are a new entrepreneur who has a great business idea. You have a really awesome plan to build a mobile application, and you have everything all mapped out in your mind. You gather all your information and start looking for app developers, but then you realize just how much it costs to build an app.
If this scenario sounds familiar, keep reading to find out how to raise money to develop a great app that will make a profit.
Crowdfunding means finding money for a product or project by accepting small amounts of money from many people. It is a smart way to put your mobile app through development, as well as make the connections you need to start making a profit. Although it is not always thought of as a networking tool, crowdfunding brings together people who are interested in the idea of the app, and who want to see it completed. For that reason, they donate money toward its development. The people who contribute initially are likely willing to spend money on the finished product too. If your crowdfunding efforts don’t seem to be working, it may mean your idea needs to be tweaked to better fit users’ needs.
If you are considering developing a crowdfunding campaign, check out some of these sites.
- AppBackr – A crowdfunding source for specifically for app development, for iTunes and Google Play only.
- Indiegogo – Not specific for app development. Indiegogo gives visitors different incentives to donate.
- KickStarter – Not app-specific. Similar to Indiegogo, in that you can reward funders for contributing.
If you have the technical skills (or you are willing to learn) to build the first version of the app, go for it! You can save a lot of money by developing a simple app, only including the essential features for testing. From there, you can make minor adjustments yourself, then consult a professional to complete the project. You may be able to get your app far enough into development that you can self-fund the rest.
Which brings me to another point: credit cards. If you have enough available credit, you can use your credit cards to get started. If you’re waiting for additional funding to arrive, but you want to get started right away, your personal cards may be the best option.
What are (family and) friends for?
If you truly have a great idea, your family and friends might be willing to help you out, especially if they believe in your cause. As you start your business adventure, ask your loved ones if they can donate some money and help you get ahead. They may not be able to fund the whole project, but they might at least be able to help you get started. A big advantage to asking family and friends to contribute is that if it doesn’t work out, they will probably forgive you. If they are willing to contribute a lot of money, you can also offer them a stake in the business.
Get a loan
Once you put together a business plan, take it to the bank. You may be eligible for a small business loan to get started. You will be able to get more money from a bank than from friends and family, but you have to be ready to answer any and every question that may come up about the app and its market. You will need statistics, progress reports and projections for growth. Getting a loan will require work, but it may be worth it if you want to move quickly on your app’s development.
If you are willing to share the spotlight with another businessperson, consider finding a co-founder. Your co-founder might be more technically savvy than you, which will reassure investors that you know what you’re doing in the digital world. This will let them know that you have a decent prototype, and that you’re partnered with someone who knows enough about app development and design to tweak what needs to be tweaked.
Bonus: A co-founder will take some of the financial pressure off your shoulders, and can take on some of the risks associated with starting a business.
When you have a great idea for a mobile app, the toughest part is finding the money to put your plan to work. Hopefully these five ways to get funded can help you get started!