Executive Summary
Tech by Tech is an app development company focusing on creative startups. Our target market is entrepreneurs under 40 who need an app for business operations.
Our services span the e-commerce, fitness, and entertainment industries. Our most recent project is a card quiz game that brought in $500,000 in sales in its first six months.
Tech by Tech was founded and owned by Lenae Louis, a software developer by trade.
Tech by Tech is seeking $150,000 in start-up or growth capital to fund operations, marketing, and staffing in the first 12 months.
Financial highlights:
| Metric | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Revenue | $420,000 | $780,000 | $1,350,000 |
| Gross margin | 70% | 70% | 70% |
| Net profit / (loss) | $64,800 | $159,000 | $313,200 |
Company Overview
Tech by Tech is a startup for startups. We develop apps and websites for startup companies in the e-commerce, fitness, and games industries. Our mission is to provide app and software development services to small businesses run by sole entrepreneurs.
We operate in the greater Los Angeles area but serve businesses nationwide.
Tech by Tech was created by Lenae Louis and incorporated as a limited liability company. Lenae is the founder and CEO of Tech by Tech, and she runs the company with a select team. Lenae has a Bachelor’s degree in Computer Science from Cornell University and an MBA from Harvard Business School.
Legal structure: LLC
Mission: To deliver exceptional app & software development company services to clients in Los Angeles, California, USA, building long-term relationships through quality, reliability, and deep expertise.
Objectives:
- Year 1: Establish operations, reach initial revenue target of $420,000, and build a loyal client base
- Year 2: Expand service capacity, grow revenue to $780,000, and hire additional staff
- Year 3: Achieve operational profitability, strengthen market position, and evaluate expansion opportunities
Market & Customer Analysis
New businesses are being started daily. Our focus is on startups by millennials and Gen Zers. This demographic is becoming increasingly interested in digital entertainment and supporting small businesses via e-commerce and fitness applications.
Naturally, the number of people starting businesses in these spheres has increased. App development is booming, and approaching it with this market in mind is a key to success.
The global app development market was worth $197.2 billion in 2021. It is expected to grow at a CAGR of 12.8% and reach $583.03 billion in 2030.
Financial constraints are one of the top things that restrict development in the software development industry. Businesses need to set aside a considerable amount of money to develop an app. If businesses cannot afford to build apps, app developers cannot make money.
The North American segment currently dominates the app development market, with Apple Inc. Google LLC and Microsoft Corporation are some of the key players not only nationally but globally.
The top app developers in the US for businesses looking to create applications are:
- App Maisters
- Fullestop
- Designli
- Trango Tech
- Quy Technology
- Emizen Tech
- Intellectsoft
These companies offer web development services for startups and companies of all sizes. We need to align our organizational strategy with them to remain competitive.
Customer analysis:
Our target market is businesses that serve the most prevalent end users of apps. In 2023, the following industries saw an increase in app usage:
- Video chat and online conference apps
- Finance technology apps
- Media and entertainment
- Online food delivery
The age group that spends the most time on apps is 25-34. This age aligns with the age of the business owners who have businesses with this age group as their target market.
Competitor analysis:
| Competitor | Strengths | Weaknesses |
|---|---|---|
| Fueled | Established brand, wide reach | Higher price point, less personalised |
| WillowTree | Strong marketing, national presence | Generic offering, less specialist focus |
| Rightpoint | Competitive pricing | Lower service quality, limited expertise |
Tech by Tech's competitive edge: Specialist expertise, personalised service, and a clear focus on the underserved segment of the market set us apart from the established players listed above.
SWOT analysis:
| Positive | Negative | |
|---|---|---|
| Internal | Strengths: Specialist expertise; experienced founder; strong client relationships; differentiated positioning | Weaknesses: Limited brand recognition as a new entrant; single location; reliance on founder capacity in early years |
| External | Opportunities: Growing market demand; underserved niche segments; digital marketing reach; referral network growth | Threats: Established competitors with greater resources; economic downturn reducing discretionary spend; regulatory changes |
Sales & Marketing Plan
The average cost of app development in the US is between $23,000 and $27,000 for Android and iOS, respectively.
Our prices are in line with the market price. Software development is a service-based industry, so we are limited in the number of clients we can have at once. We aim to have two complex clients per year and three easier clients. Complex projects take between three and six months to complete, and simpler ones take between one and two months.
Pricing strategy: Pricing is set to be competitive within the Los Angeles, California, USA market while reflecting the quality and specialist nature of the services delivered. All pricing is reviewed annually against market benchmarks.
Marketing channels:
- Digital presence (website + SEO) — professional website with content marketing to attract organic search traffic from clients searching for app & software development company services in Los Angeles, California, USA
- Social media — active presence on relevant platforms to build brand awareness and engage prospective clients
- Referral programme — incentivised referral programme for existing clients; target 30% of new clients via referral by end of Year 2
- Local networking and partnerships — attendance at industry events and partnerships with complementary businesses in Los Angeles, California, USA
- Google Ads — targeted paid search campaigns for high-intent keywords during launch phase
Marketing budget Year 1: $50,400 (12% of projected revenue)
Additional marketing notes:
As a software business, we will aggressively use digital marketing services. Facebook, Instagram, and Twitter will be used to reach a wide audience and engage with them through targeted advertisements and engaging content. Our website will be where our advertisements direct people. It should be fully functioning to showcase our abilities as an app and web development company. The website will feature valuable and engaging content, such as blog posts, videos, and tutorials, to establish your apps and software business as an industry authority and build trust with your audience. Lastly, optimizing your app's visibility in app stores is essential for increasing downloads. You can improve your app's visibility and attract more users by utilizing effective app store optimization strategies, such as optimizing keywords, creating compelling descriptions, and obtaining positive reviews.
Operating Plan
Personnel Department Task Deadline Lenae Louis Technology Strategize projects for the year and assign duties Ongoing Santana May Marketing Plan and implement marketing strategy. Throughout quarters. Franco Francis Human Resources Hire junior developers February 1st
Staffing plan:
| Role | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Lenae Louis (Owner / Director) | Full-time | Full-time | Full-time |
| Operations / Senior Staff | Part-time | Full-time | Full-time |
| Support / Junior Staff | — | Part-time | Full-time |
Legal & compliance:
- All required licences and permits for app & software development company operations in Los Angeles, California, USA
- Professional liability and general liability insurance
- Data protection compliance in accordance with applicable laws
- Health & safety policies and risk assessments in place before trading begins
Management Team
A highly skilled and experienced team of five professionals will lead the management team for Tech By Tech, ensuring efficient and effective operations. The team composition includes a Chief Executive Officer (CEO), Chief Technology Officer (CTO), Chief Marketing Officer (CMO), Chief Financial Officer (CFO), and Chief Operations Officer (COO). Each member has specific roles and responsibilities to ensure the smooth functioning of the business. The recruitment strategy for the management team involves a rigorous selection process that focuses on expertise, experience, and cultural fit. Performance evaluation is conducted regularly to assess individual and team performance, identify areas for improvement, and reward exceptional achievements. Professional development is prioritized to enhance skills and knowledge, keeping the team up-to-date with the latest industry trends and technologies. This ensures that the management team remains competent and capable of driving the success of Tech By Tech.
Lenae Louis — Founder & Director
Advisory support: The business will engage an experienced accountant and a business mentor through the local enterprise support network to provide financial oversight and strategic guidance during the first three years of trading.
Financial Plan
Year 1 Year 2 Year 3 Sales $150,000 $300,000 $500,000 Direct Cost of Sales $0 $0 $0 Production Payroll $50,000 $100,000 $150,000 Other $0 $0 $0 Total Cost of Sales $50,000 $100,000 $150,000 Gross Margin $100,000 $200,000 $350,000 Gross Margin % 67% 67% 70% Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $0 $0 $0 Advertising/Promotion $10,000 $15,000 $20,000 Travel $0 $0 $0 Miscellaneous $500 $500 $500 Total Sales and Marketing Expenses $10,500 $15,500 $20,500 General and Administrative Expenses
General and Administrative Payroll $20,000 $50,000 $50,000 Sales and Marketing and Other Expenses $0 $0 $0 Depreciation $1,000 $1,000 $1,000 Dues and Subscriptions $200 $200 $200 Professional Fees $300 $300 $300 Rent $3,000 $3,000 $3,000 Software Purchases $0 $15,500 $0 Insurance $4,000 $4,000 $4,000 Telephone and Internet Access $3,000 $3,000 $3,000 Utilities $1,000 $1,000 $1,000 Miscellaneous $0 $0 $0 Payroll Taxes $4,900 $10,500 $14,000 Other General and Administrative Expenses $0 $0 $0 Total General and Administrative Expenses $37,100 $88,500 $76,500 Total Operating Expenses $47,600 $104,000 $97,000 Profit Before Interest and Taxes $52,400 $96,000 $253,000 EBITDA $53,400 $97,000 $254,000 Interest Expense $0 $0 $0 Taxes Incurred $11,214 $20,370 $53,130 Net Profit $42,186 $76,630 $199,870 Net Profit/Sales 28% 26% 40%
Projected Cash Flow Statement Cash Received Year 1 Year 2 Year 3 Cash from Operations
Cash Sales $150,000 $300,000 $500,000 Cash from Receivables $0 $0 $0 Subtotal Cash from Operations $150,000 $300,000 $500,000 Subtotal Cash Received $150,000 $300,000 $500,000 Expenditures
Expenditures from Operations
Subtotal Spent on Operations $47,600 $104,000 $97,000 Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $11,214 $20,370 $53,130 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $50,000 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $108,814 $124,370 $50,130 Net Cash Flow $41,186 $175,630 $150,130 Cash Balance $41,186 $216,816 $366,946 Projected Balance Sheet Assets Year 1 Year 2 Year 3 Current Assets
Cash $41,186 $216,816 $366,946 Total Current Assets $41,186 $216,816 $366,946 Long-term Assets $50,000 $50,000 $50,000 Accumulated Depreciation $0 $1,000 $2,000 Total Long-term Assets $50,000 $49,000 $48,000 Total Assets $91,186 $265,186 $414,946 Liabilities and Capital
Current Liabilities
Subtotal Current Liabilities $0 $0 $0 Long-term Liabilities $0 $0 $0 Total Liabilities $0 $0 $0 Paid-in Capital $50,000 $0 $0 Retained Earnings $42,186 $76,630 $199,870 Earnings $42,186 $76,630 $199,870 Total Capital $92,146 $76,630 $199,870 Total Liabilities and Capital $92,146 $76,630 $199,870 Net Worth $91,186 $265,186 $414,946
Wrapping up the ASP Software Developer Business Plan
There you have it, an all-inclusive guide on how to write your software development business plan.
Every business is different, but we hope these examples and explanations can help guide you in the right direction. If you still need help, reach out to one of our experts for a one-on-one consultation.
3-year profit & loss projection:
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $420,000 | $780,000 | $1,350,000 |
| Contractor and developer labour costs | $126,000 | $234,000 | $405,000 |
| Gross profit | $294,000 | $546,000 | $945,000 |
| Gross margin | 70% | 70% | 70% |
| Salaries and wages | $117,600 | $218,400 | $378,000 |
| Marketing and advertising | $50,400 | $93,600 | $162,000 |
| Rent and utilities | $36,000 | $36,000 | $37,800 |
| Other operating costs | $25,200 | $39,000 | $54,000 |
| Total operating expenses | $229,200 | $387,000 | $631,800 |
| Net profit / (loss) | $64,800 | $159,000 | $313,200 |
Break-even analysis:
- Estimated fixed monthly costs: $14,900
- To cover fixed costs, Tech by Tech needs to generate approximately $21,300 in monthly revenue
- Break-even is projected to be reached in Month 5 of trading
Key financial assumptions:
- Revenue growth of 85% in Year 2 and 73% in Year 3 based on planned capacity expansion and marketing investment
- Contractor and developer labour costs estimated at 30% of revenue throughout the forecast period, consistent with industry benchmarks
- Staffing costs set at 28% of revenue, scaling incrementally with new hires in Year 2 and Year 3
- Marketing budget fixed at 12% of revenue; reviewed quarterly and adjusted based on channel performance
- No bad debt assumed; payment terms enforced from day one
Funding requirements:
Tech by Tech is seeking $150,000 to fund the following:
| Use of funds | Amount |
|---|---|
| Equipment and fit-out | $60,000 |
| Working capital (6 months) | $52,500 |
| Marketing launch | $22,500 |
| Legal, licences, and professional fees | $15,000 |
| Total | $150,000 |