This article tackles one of biggest barriers to growing that app business face today :- balancing fixed monthly running costs with unpredictable, lumpy project based income. It suggests there could be a way to build a strong revenue platform to under-pin an App Development or Digital Web business that will balance the costs/income equation and help businesses scale with confidence.
If you run a services business that builds apps, and websites you’ll recognise this.
- Mismatch between costs and income – fixed monthly salary costs, office space and the rest set against income that’s variable, lumpy, unpredictable
- “Over-trading” anxiety – stretching your resources thin as you finish off one project and start another.
- The angst around resourcing…
- Do you hire ahead of demand and increase risk with an even greater mismatch between costs and income.
- Do you outsource to give yourself more flexibility but risk your reputation
- Do you bring in contractors and accept the code debt that this brings.
You may be some who likes the cut and trust of a project based revenue model. But for most this is the single biggest barrier to growing their business. Opportunities unfolding ahead of you, but do you invest hire more staff, rack up your fixed costs and hope you win more customers?
So imagine a situation where you have a strong and rising monthly recurring revenue base for your business.
- Where you can turn project revenue into multi-year monthly income.
- Where you can take an initial project and 2x its income.
- Where most or all of your monthly costs are covered by recurring revenue services so you have the confidence to invest in your business, hire more staff, expand.
- Where you can price up contracts with the margin you should command rather than feel pressured to trim margin so win the project and plug a short term cash flow hole.
And most importantly where you build a business that has many times higher exit value for the owners.
Well we know how it can be done and we have worked with businesses to build a strong, reliable revenue stream from past projects. Not only do they sleep at night knowing some or all of the bills are covered, it actually lets them grow their business (by offering services to existing apps built by others) and positioning them perfectly to take on the next build project.
You see we come at this differently. We aren’t just focused on solving technical business problems (we do that of course, with robust, secure, stable platform that lets you build apps fast, apps that blow your customers away with their awesomeness). We’re different because we also focus on solving the biggest business issue facing App and Web Development Agencies today – breaking the cycle between growing fixed costs and increasingly volatile and unpredictable income.
So how is it done?
We find it works best by offering a range of app services that can be grouped three main offerings. This makes it easier for your customers to understand the value of your services. It also means you have technical offerings if your main client contact is more technical or business offerings if your contact is more commercial.
- App Optimisation
How to continually improve and learn from what’s actually happening with the app once it’s out in the wild. There are a whole range of optimisation services that you can offer to join your client on the journey to app awesomeness. This also keeps you in close contact with the customer after the initial app build phase is over, so you win follow on projects. App owners want to know what’s happening to their app and you’re in the perfect position to offer them a monthly service that reports on growth in active devices, what platforms are most common, how good the download & on-boarding journey is – how this can be improved. These are high value services that your customers will happily pay for each month.
- App Management & Support
Be the trusted hands around the app, keeping a hawk eye on the performance and availability of the app and the integrated services… flag problems and fix them before the app owner even knew there was a problem, manage hook up latency to spot problems in the backend that’s affecting app performance, sell database backup as a service, uptime, response time and availability as a service. Again, high value monthly services generating a monthly support fee.
- Maintenance and Support
Because the app owner feels you’re with them on their App journey, this lets you get ahead of the game and pre-plan upgrades and project work. You get more visibility, you can plan your resources more effectively and avoid the angst of “over-trading”. You can also sell them forward blocks of time to do the ongoing fixes, improvements and enhancements to their app generating predictable monthly income