Your app is a valuable asset that can be monetized. You can make money within the app by charging a fee for download, obtaining a subscription, using one-time in-app purchases, and incorporating advertisements. Another option is selling it. It might seem strange at first, but we believe you should think of your app as something that represents value. In this article, we'll go over the major questions like how to sell an app and ways to sell your app for what it’s worth.
How to Sell Apps: Step-by-step Guide
Most of the time, you might be confused about how to sell your app. To make the process easier for you, we have compiled some steps that may help you to sell your app.
Step 1: Outline Your App's Concept
The first step is to describe your app's niche, what features it will include, and what value it will provide to the users. Write down any ideas for your app's design, name, marketing, monetization strategies, etc. It does not have to be overly detailed, but it will come in handy when you begin developing the business concept.
Step 2: Do your Research, Know your Market and Users
Regardless of how certain you are about the superiority of your app idea, conduct thorough research and gather relevant data about the overall market, your competitors, and your prospective users. Make sure you know the points, like:
- Competitors apps: Researching competitors and analyzing their strategies will help you understand what they are doing to promote their products. Moreover, with in-depth research, you will know their monetization strategies and how they retain users, ratings, and reviews.
- User base: The user base refers to your targeted audience, their age, occupations, genders, and how they come to know about new products in the market.
- Overall Market: Odds are, you may find that there are many apps available on Google Play and App Store similar to your niche, free and paid. So, to dive deep into it, you need to analyze similar apps like yours, their number of downloads across all platforms, and the locations they are most popular. This will give you a precise idea of the overall market and the areas you should focus on.
Step 3: Develop a Business Idea
The business concept should be a comprehensive document in which you should give a precise overview of your app concept and present a clear business plan. It should contain answers to all of your investors' questions.
You should clearly understand your targeted users and how they will benefit from your app. Also, how will your project differ from the many other similar app providers, what marketing channels you will use to attract potential customers, and how will you make money with your idea? The most important things to keep in mind are:
- Analyze your app project
- Target audience
- An overview of marketers and competitors
- Marketing strategy
- Growth Roadmap
- Monetization strategy
Step 4: Develop and Launch Your App
Once you complete the development process, it's time to launch the app, making it ready to sell. Thorough testing is mandatory before you release an app. Your business concept presentation already includes details about the launch activities. So, once you have covered that topic, all you have to do is put everything you've planned into action.
To attract investors, you must maintain your good work and grow your app. You can introduce new features to your app, improve retention, make efforts to increase users, interact with your users, increase engagement, etc.
Do everything you can to build and maintain your app's reputation- don't break the app store's rules, have a user-friendly interface, and be responsive to the media. It is also critical to properly lead your business operations, follow your country's laws, pay taxes, and respect your employees. Keep in mind that they will conduct due diligence on your business when you find investors.
Step 5: Start Finding Potential Buyers
This is a challenging part for many buyers, but, yes, an important one. Whether you are looking at how to sell an app to a company or any potential buyer, you need to understand how to find the right buyer for your app. So, in order to find potential buyers, the following are the guidelines you need to follow.
Step 6: Make a List of Prospective Tech Companies
Make a list of tech companies that are interested in purchasing app projects. If you want to sell the app, you'll need to look for tech companies that can buy other projects. The most straightforward method is to conduct an online search for tech unicorns and conduct research on recent acquisitions and investments. Don't confine yourself to your own country or region. Your buyers could be from anywhere in the world.
Step 7: Choose The Companies That Are Relevant To Your Industry
Analyze the company's profile, read about its most recent acquisitions, and figure out if your app fits its business model and development roadmap. Keep your initial investor list to companies that are relevant to your app.
Step 8: Identify Potential Contacts
Look at the company's website to see if they have contacts for people in charge of business development or investments. You can search LinkedIn for company representatives having professional accounts. Ideally, you'd want to connect with and contact someone in charge of business acquisitions. You can also use LinkedIn to find relevant contacts.
Step 9: Pitch a Prospective Investor
Once you've compiled a list of necessary contacts, you're ready to start pitching companies. Your personal preferences determine the channel you choose. One of the most effective platforms is LinkedIn. You can start by sending messages on it and can schedule personal meetings and phone calls. In fact, you can also meet company representatives at startup events and meetups.
Under the mutually signed NDA, all the necessary information should be disclosed. Keep in mind not to reveal too much sensitive information about your app. Your prospective buyer will conduct due diligence. If you believe you will require legal assistance, seek the advice of a lawyer.
How Much Do Apps Sell For?
It is important to understand how to price an app. To calculate the profit of your app, take the gross revenue and deduct all expenses that directly contribute to that revenue. App Store fees, operational costs (such as servers, customer support, licensing, and so on), marketing spend, app maintenance, and anything else required to keep the app running are all examples of expenses for an app.
Development costs associated with building new features are typically not considered because those expenses contribute to future profit rather than the maintenance of current profit. However, each app is unique, and you may need to include some development costs in your app's valuation.
While most apps sell for 12X-36X, others sell for much more, and some do not sell at all. Many factors may influence where your app falls within that range. Apps built from templates with no defensibility and fluctuating downloads or revenue are typically at the lower end of the spectrum. On the other hand, strategically valuable apps, even if they are not profitable, can sell for multiples of their gross revenue.
Strategically valuable apps, on the other hand, can sell for multiples of their gross revenue even if they aren't profitable.
Another factor that could significantly impact your app's valuation is revenue sustainability. Subscription apps with a history of low subscriber churn usually have higher valuations than apps that make money from one-time purchases and/or ads.
Wrapping up the Post
If you are planning to sell your app and are looking for analytical data related to your potential buyers, companies, locations, and more, Appflow.ai has got you covered! We use AI to help people get the most out of their businesses. With the help of our actionable insights and personalized suggestions, we help businesses generate more leads and assist them in making better decisions faster.