Marketing to Users

JUNIOR DIVISION ONLY!

  • Learn what marketing is
  • Make a plan for more people to use your app through marketing
  • Try out some of your marketing ideas

These are the activities for this lesson:

MARKETING

You could create an awesome product that solves a really important problem, but your business will not be successful if no one knows about or uses your product. 

Marketing is the process of telling people about your product and getting them to use it.

 

REMEMBER YOUR USERS

You know who your users are already!

  • from your Unit 3 Market Research work 
  • from your Unit 5 Project Canvas work

In this lesson, you will create a marketing strategy, which is a plan so that more people learn about and use your product.

MARKETING GOALS

Let’s start thinking about some marketing goals your team wants to accomplish.

These should be realistic and measurable so that you can reach them and see if your strategy is working. 

Here are some examples of goals:

  • Get at least 100 app downloads per month
  • Get at least 10 likes per social post
  • Get at least 100 followers on each social media account
  • Reach $100 in sales per month

Your team will work together to decide on  2-3 goals in total. 

Remember: If your goals are too high, you’ll become discouraged because you may be unable to reach them.

Then you will have to consider how you will achieve your marketing goals.

4 P'S OF MARKETING

Product

Your product is the thing that you are selling, which in your case is your mobile or web app. The first step to get people to use your product is to make sure it is a good product that will be useful to them. You are doing this right now!

Place

Place is where your users can access your product.
Examples:
  • Google Play or Apple App Store
  • Your own website
  • Other websites that focus on the problem you are solving
  • Social media pages and advertisements
  • Positive but honest reviews from friends

Price

Price is how much your user will pay for your product. You want a fair price, but if your price is too high, people won’t buy your product.

Promotion

Promotions are the ways to reach your target audience to tell them about your product and convince them to use it. Promotional strategies are outlined in more detail below.

PROMOTION STRATEGIES

This is not required, as it’s an expensive option, but it might be the best way to reach some of your users.

Getting started:

  • Websites
    • What are some websites that your users might visit, where you might place an ad?
    • Think of local options to keep the cost down. Consider your school or town website.
  • Newspapers, magazines
    • Think local. Does your town have a newspaper? Your school?
    • Your ad should be 
      • eye-catching 
      • explain what your product is for
      • explain why someone should use it.
  • Radio or television
    • This can be expensive, so think local.
    • Does your local university or school have a radio station? A local TV station?
    • Local stations sometime feature local people and initiatives

social media iccons

Creating social media accounts for your product is free, but the real work is getting followers and keeping them interested. You’ll have to create interesting posts to engage your users.

Getting Started

    1. With your parent or guardian’s permission, make a free Facebook page, Instagram, or Twitter account for your product. Remember to review these safety tips for staying safe online.
    2. Add your logo, a picture of your team (optional) and anything else you would like to share.
    3. Make your first post.
    4. Ask friends and family to follow you to get started.
    5. Focus on your target users. What things are they interested in?
    6. Post pictures that illustrate the problem you are solving or interesting pictures of your team.
    7. Use relevant hashtags with your posts.

girl showing app to othersWord of Mouth Marketing (WOMM) is often the best way to get people to try your product.

92% of Nielsen-surveyed consumers believe their friends and family over any kind of advertising. 

(Source: https://blog.hubspot.com/agency/how-online-word-of-mouth-marketing-is-changing)

 

Getting Started

  • Encourage people to talk about your app.
  • Use your friends and family to spread the word.
  • Use your local connections to promote your app.
  • If you know an important figure or influencer, ask them to speak on behalf of your app.

puzzle pieces fitting togetherTry looking for organizations in your community that are trying to solve the same problem as your project. The organization most likely has members or clients they work with who would be willing to try out your product. They can also provide feedback during development! 

Getting Started

    • List organizations or groups in your community or region that are tackling the same problem as your team.
    • Email or phone each organization.
      • include a short description of your project.
      • ask to work with them to solve the problem together.
    • If they do not respond to email, try phoning them to talk directly to a person within the organization.

Here are some marketing tips to consider.

Target Audience
Do your users have Instagram or TikTok?

Will they see posters you hang around your school?
Consider Cost
Social media can be free.

But a commercial on TV costs money.
Check out your Competitors
What things are they posting?

How are they promoting their product?
Organizations
Don't forget to look at people or organizations working to solve the same problem as your team.

What are they doing to solve the problem?
Let them know what you are working on.
See how you can work together.
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ACTIVITY 1: MARKETING PLAN

Estimated time: 30 minutes (plan only)

Set marketing goals and strategies

Follow the instructions on the worksheet to:

  1. List 2-3 marketing goals for your app or business.
  2. Choose 1 or 2 marketing strategies and try them out.
Open worksheet

REFLECTION

Congratulations, you have a marketing plan! Let’s review what you did:

  • Set your marketing goals.
  • Created strategies to achieve your goals.
  • Found a way to track and assess your progress.

Remember, your marketing plan can change as other factors change, like your product (or its features), user perception, or even budgets. It’s up to you to be flexible and modify your plans as best you can.

 

mountain reflection

REVIEW OF KEY TERMS

  • Marketing – the process of telling people about your business and getting them to use your product
  • 4 P’s of Marketing
    • Product – the thing you are selling or offering
    • Promotion – the way you tell customers about your product
    • Price – how much the customer will pay for a product
    • Place – where you are selling your product
  • Strategy – how you will market your app so that you can meet your goals
  • Assessment – whether or not your strategy is working

ADDITIONAL RESOURCES

Metrics

To check the progress of your marketing plan in action, you can track your goals using metrics.

The metrics you measure will depend on the goals you are trying to achieve.

For example, if you choose to upload your app to the Google Play and Apple App Stores, you can track how many people download your app.

Each store has its own way to track downloads.

Example: Google Play Metrics

This is a view of the Google Play Developer Console. You can track: 

  • how many users installed your app
  • how many uninstalled it 
  • countries the app is being downloaded in

In this example, the app has been:

  • in the Google Play Store for 3 months
  • downloaded 11 times 
  • uninstalled once
Google Play console

You can also see how people rated your app.

You can see when ratings were added, and what the ratings were.

google console ratings

User Adoption Plan

  • Learn about user adoption plans 

  • Plan and write your user adoption plan

These are the activities for this lesson:

THE USER ADOPTION PLAN

The main focus of the plan, of course, is users! In your plan, you want to describe two things:  

  1. The users who have already tested the app  and what feedback they’ve provided
  2. How you will get more people to try out the app over the next year
girls using phones

WRITING YOUR PLAN

A lot of what you did for Market Research in Unit 2 will help you with your plan. In your plan, you will summarize what you learned about your target users and how you have interacted with them. Your user adoption plan should include: 

  • A sketch of your users, including numbers and demographics
  • (Optional) Competitor analysis – related to getting users to adopt your app over competitors
  • Who you got to test your app and how you engaged them
  • How your ideas for your app changed based on your target user feedback

FUTURE PLANS

silhouette girl yelling in megaphone

You will also need to explain how you will promote your product to potential users in the upcoming year.  

You want to explain: 

  • How you will show people your app
  • How you will get people to use it
  • What happens once people have tried your app

 To do this, you’ll need: 

  • Clear messaging that explains your app’s purpose
  • An in-depth strategy to reach target users
  • (Optional) Plans to partner with organizations who are working on the same problem, as a way to engage more users

ACTIVITY: USER ADOPTION PLAN

Estimated time: 45 minutes+

Follow the worksheet to complete your plan

  1. Answer all the questions on the worksheet.
  2. Take the completed worksheet and copy/paste the written answers into a finished document to upload as your User Adoption Plan.
You can make your own copy of the worksheet and edit as needed.
Download worksheet

REFLECTION

Writing a user adoption plan is a big accomplishment, and one that should make sure your app gets used by the people who need it! 

Sunset and reflection over lake
The entire team should review the user adoption plan.
Ask your mentor or parents to read it over.
Incorporate any feedback you get.
It helps to get different people's points of view.
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REVIEW OF KEY TERMS

  • User Adoption Plan – a document that details what feedback you have already received from users and how you will get more people to use your product

ADDITIONAL RESOURCES

Below are some examples of User Adoption Plans from past Technovation teams.

Business and Mission Statements

SENIOR DIVISION ONLY!

  • Learn about different types of businesses
  • Choose which type of business yours will be
  • Write a mission statement for your business

WHAT IS A BUSINESS?

What comes to mind when you hear the word ‘business’? You might think of a local farm stand, a grocery store, a bank, or a big technology company like Facebook or WhatsApp. 

A business is any organization or person that is doing something in exchange for money or another good. 

Businesses can:

  • make, buy, or sell goods (like a company that makes cars)
  • provide services (such as a mobile phone service company).

There are many young people who have started their own businesses. For example, Megan Yap, a Technovation alumna from Malaysia, started her own business, Melli Studio, selling stickers online.

Mellistudio logo

GOALS

2 girls working a lemonade stand

Usually we think of a business as a way to make money, which is your profit.

Businesses can have other goals besides making money.

Social goals, like

  • helping feed hungry people
  • providing students with a better education. 

Business goals, like

  • creating eco-friendly products
  • providing customers with the best product possible

All business have one thing in common; they need some way to bring in money so that they can continue to operate. 

There are three main types of businesses – for profit, non-profit, and social enterprise.

FOR PROFIT BUSINESSES

For-profit businesses focus on earning a profit by selling goods or services. They can also have goals, such as creating the best products possible or having great customer service. Hover over each logo to learn more.

apple logo

Apple

is a major seller of phones, computers, software and more. Their goal is to design the best computers and phones in the world.
visit

McDonald's

is one of the world’s largest food corporations. Their goal is to be their customers' favorite place to eat and drink.
visit

NON-PROFIT BUSINESSES

Non-profits exist to help solve a problem or contribute to a cause. They do not have the goal of making money. Hover over each logo to learn more.

UNICEF logo

UNICEF

works with partners around the world to promote policies and expand access to services that protect all children.
visit
technovation logo

Technovation Girls

helps girls around the world develop the skills to become technology and entrepreneurship leaders.
visit

SOCIAL ENTERPRISE BUSINESSES

Social enterprises focus on doing something beyond making a profit, like helping solve a social issue. They use some of the profit they make to accomplish this goal. Hover over each logo to learn more.

Morogoro Cocopeat

founded by Technovation alumna Winnie Msamba, manufactures and distributes organic growing medium from coconut husks to help local farmers.
visit
hand holding every table sign

Every Table

restaurants provides nutritious food for communities. The food sold in richer neighborhoods helps to subsidize the food cost in poorer neighborhoods.
visit

ACTIVITY 1: CHOOSE A BUSINESS TYPE

Estimated time: 20 minutes

Discuss these questions with your team
and write down your answers

  1. What do you want to accomplish by opening your business?
  2. What are some of the goals of your business?
  3. How do you think you can sustain (keep it running) your business?
  4. What type of business do you want yours to be? (for-profit, non-profit, or social enterprise)

You don’t need to have all the answers today but it is important to keep thinking of these as you build your business plan. You can always change the type of business as you further develop your project solution and business plan!

It helps to look at mission statements for other organizations for inspiration. See some examples below.

MISSION STATEMENTS

Your business goal really is to solve the problem that you identified, but you will also need money so that you can keep the business running or scale it up (grow its size and impact).

Stay true to the original goal of your business by staying close to your company’s mission statement.


A mission statement is a formal summary of the values of a company, organization, or individual.

Mission statements help companies determine what is important and what is not, and clearly state who will be served and how.

A mission statement is usually a short and simple sentence that outlines the organization’s purpose and how it accomplishes that purpose.

Your mission statement is the “heart” of your business.

ACTIVITY 2: WRITE A MISSION STATEMENT

Estimated time: 20 minutes

Develop your mission statement as a team

  • Should be 2-3 sentence long
  • Should describe the goals of your business
  • Some questions to guide you:
    • What do we do?
    • How do we do it?
    • Whom do we do it for?
    • What value are we bringing?

REFLECTION

You have accomplished a lot as you start to develop your business plan. Consider these questions:

reflection in a lake with mountains
Why do you think there are different types of businesses?
What are the advantages of the different types of business?
What type of business do you think will be best in solving the community problem you are trying to tackle?
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REVIEW OF KEY TERMS

  • Business – any organization or person that is doing something in exchange for money or another good
  • Profit – money made from operating a business
  • Non-profit – a company that has a goal other than making money
  • Social Enterprise – a business that focuses on doing something beyond making a profit, like helping solve a social issue
  • For Profit – a company that has the goal to make money
  • Mission Statement – a formal summary of the values of a company, organization, or individual

ADDITIONAL RESOURCES

Here’s a short video explaining more about social enterprises.

woman talking to other women in classrooom

Partnering with Organizations

  • Identify partners you can work with to build your project
  • Look for ways to get people to use your product

These are the activities for this lesson:

PARTNERS

Who in your community, or globally, is working to solve the same problem as you? 

These people or organizations might have the same goal as you. It is likely they have knowledge, skills, and resources in line with those you will need to complete your project. Doesn’t it make sense to reach out to them to see if a partnership can be formed?

volunteers on beach cleaning up

Partners are:

  • people or companies who work together
  • is more than someone who is helping you with your project, such as a teacher or parent.
  • can help you meet your goals, but will also get something in exchange.
    • maybe money
    • maybe publicity
    • the ability to use your app for free


    Partnerships can prove very beneficial to your project. They can: 

You may be able to find partners who are well connected to people you want to serve.

For example, if you want students to use your app, you might be able to partner with a school district that can tell students about your project.

In exchange, you’ll be helping the school district better serve its students.

Perhaps your business needs a service that is beyond what you can build yourself.

For example, say your app solved a garbage problem by arranging pickup. Instead of buying a garbage truck and driving it yourself, you could partner with a local garbage collection company.

In exchange, you could pay them a certain amount for each pickup they do.

TECHNOVATION EXAMPLES

Here are some examples of Technovation teams who partnered with members of their communities to help meet the team goals. 

HOW TO FIND A PARTNER?

If you find a partner you might want to work with, try contacting them.

You can also get help from a teacher or mentor who might be able to connect you with them more easily.

COMMUNICATION GUIDELINES

EXPLAIN:

  • who you are and why you are contacting them
  • that you are working on a project for social good
  • how you could benefit from a partnership
  • how your project will benefit them

If you contact potential partners but don’t hear back, that’s okay!

Don’t give up!

Try phoning or emailing them again.

You will find a phone call will get a better response than an email or text. 

ACTIVITY: IDENTIFY PARTNERS

Estimated time: 30 minutes

Identify 2-3 individuals or organizations for potential partners

  1. Write down their contact information.
  2. Draft a short script you can use for a phone call.
  3. Phone them and use your script to ask for their help. Leave a message if there is no answer.
  4. Document the date/time and who you spoke to or left a message with so you can follow up.
  5. An alternative is to email the organization.
  6. Document the date/time sent and to whom.

REFLECTION

Finding partners can be very beneficial to your project, but it’s not an easy thing to do.

Give yourself a pat on the back for reaching out!

Did you step out of your comfort zone to reach out and talk to people?
Did you get a response from anyone yet?
Set a reminder for next week to try again if you don't hear back.
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Marketing your Product

SENIOR DIVISION ONLY!

  • Learn what marketing is
  • Make a plan for more people to use your app through marketing
  • Develop the marketing plan section of your Business Plan
  • Try out some of your marketing ideas and revise your marketing plan

These are the activities for this lesson:

MARKETING

You could create an awesome product that solves a really important problem, but your business will not be successful if no one knows about or uses your product. 

Marketing is the process of telling people about your product and getting them to use it.

 

REMEMBER YOUR USERS

You know who your users are already!

  • from your Unit 3 Market Research work 
  • from your Unit 5 Project Canvas work

In this lesson, you will create a marketing strategy, which is a plan so that more people learn about and use your product.

MARKETING GOALS

Let’s start thinking about some marketing goals your team wants to accomplish.

These should be realistic and measurable so that you can reach them and see if your strategy is working. 

Here are some examples of goals:

  • Get at least 100 app downloads per month
  • Get at least 10 likes per social post
  • Get at least 100 followers on each social media account
  • Reach $100 in sales per month

Your team will work together to decide on  2-3 goals in total. 

Remember: If your goals are too high, you’ll become discouraged because you may be unable to reach them.

Then you will have to consider how you will achieve your marketing goals.

4 P'S OF MARKETING

Product

Your product is the thing that you are selling, which in your case is your mobile or web app. The first step to get people to use your product is to make sure it is a good product that will be useful to them. You are doing this right now!

Place

Place is where your users can access your product.
Examples:
  • Google Play or Apple App Store
  • Your own website
  • Other websites that focus on the problem you are solving
  • Social media pages and advertisements
  • Positive but honest reviews from friends

Price

Price is how much your user will pay for your product. You want a fair price, but if your price is too high, people won’t buy your product.

Promotion

Promotions are the ways to reach your target audience to tell them about your product and convince them to use it. Promotional strategies are outlined in more detail below.

PROMOTION STRATEGIES

This is not required, as it’s an expensive option, but it might be the best way to reach some of your users.

Getting started:

  • Websites
    • What are some websites that your users might visit, where you might place an ad?
    • Think of local options to keep the cost down. Consider your school or town website.
  • Newspapers, magazines
    • Think local. Does your town have a newspaper? Your school?
    • Your ad should be 
      • eye-catching 
      • explain what your product is for
      • explain why someone should use it.
  • Radio or television
    • This can be expensive, so think local.
    • Does your local university or school have a radio station? A local TV station?
    • Local stations sometime feature local people and initiatives

social media iccons

Creating social media accounts for your product is free, but the real work is getting followers and keeping them interested. You’ll have to create interesting posts to engage your users.

Getting Started

    1. With your parent or guardian’s permission, make a free Facebook page, Instagram, or Twitter account for your product. Remember to review these safety tips for staying safe online.
    2. Add your logo, a picture of your team (optional) and anything else you would like to share.
    3. Make your first post.
    4. Ask friends and family to follow you to get started.
    5. Focus on your target users. What things are they interested in?
    6. Post pictures that illustrate the problem you are solving or interesting pictures of your team.
    7. Use relevant hashtags with your posts.

girl showing app to othersWord of Mouth Marketing (WOMM) is often the best way to get people to try your product.

92% of Nielsen-surveyed consumers believe their friends and family over any kind of advertising. 

(Source: https://blog.hubspot.com/agency/how-online-word-of-mouth-marketing-is-changing)

 

Getting Started

  • Encourage people to talk about your app.
  • Use your friends and family to spread the word.
  • Use your local connections to promote your app.
  • If you know an important figure or influencer, ask them to speak on behalf of your app.

puzzle pieces fitting togetherTry looking for organizations in your community that are trying to solve the same problem as your project. The organization most likely has members or clients they work with who would be willing to try out your product. They can also provide feedback during development! 

Getting Started

    • List organizations or groups in your community or region that are tackling the same problem as your team.
    • Email or phone each organization.
      • include a short description of your project.
      • ask to work with them to solve the problem together.
    • If they do not respond to email, try phoning them to talk directly to a person within the organization.

Here are some marketing tips to consider.

Target Audience
Do your users have Instagram or TikTok?

Will they see posters you hang around your school?
Consider Cost
Social media can be free.

But a commercial on TV costs money.
Check out your Competitors
What things are they posting?

How are they promoting their product?
Organizations
Don't forget to look at people or organizations working to solve the same problem as your team.

What are they doing to solve the problem?
Let them know what you are working on.
See how you can work together.
Previous slide
Next slide

ACTIVITY 1: MARKETING PLAN

Estimated time: 30 minutes (plan only)

Set marketing goals and strategies

Follow the instructions on the worksheet to:

  1. List 2-3 marketing goals for your app or business.
  2. Choose 1 or 2 marketing strategies and try them out.
Open worksheet

REFLECTION

Congratulations, you have a marketing plan! Let’s review what you did:

  • Set your marketing goals.
  • Created strategies to achieve your goals.
  • Found a way to track and assess your progress.

Remember, your marketing plan can change as other factors change, like your product (or its features), user perception, or even budgets. It’s up to you to be flexible and modify your plans as best you can.

 

mountain reflection

REVIEW OF KEY TERMS

  • Marketing – the process of telling people about your business and getting them to use your product
  • 4 P’s of Marketing
    • Product – the thing you are selling or offering
    • Promotion – the way you tell customers about your product
    • Price – how much the customer will pay for a product
    • Place – where you are selling your product
  • Strategy – how you will market your app so that you can meet your goals
  • Assessment – whether or not your strategy is working

ADDITIONAL RESOURCES

Metrics

To check the progress of your marketing plan in action, you can track your goals using metrics.

The metrics you measure will depend on the goals you are trying to achieve.

For example, if you choose to upload your app to the Google Play and Apple App Stores, you can track how many people download your app.

Each store has its own way to track downloads.

Example: Google Play Metrics

This is a view of the Google Play Developer Console. You can track: 

  • how many users installed your app
  • how many uninstalled it 
  • countries the app is being downloaded in

In this example, the app has been:

  • in the Google Play Store for 3 months
  • downloaded 11 times 
  • uninstalled once
Google Play console

You can also see how people rated your app.

You can see when ratings were added, and what the ratings were.

google console ratings

Calculating Revenue

  • Learn about different ways to make money for your app
  • Calculate how much revenue your business will make over 5 years

These are the activities for this lesson:

REVENUE MODEL

By now, you have a pretty good idea of your business model and how you will market your product. 

Now, it’s time to figure out how your business will make money. 

Nonprofits and social enterprises still need to make money to pay for all of their expenses.

money

PROFIT

[Revenue] - [Operating Costs] = [Profit]

[Revenue] – how much money your business earns

[Operating Costs] – how much it costs to run your business

[Profit] – how much money you have left over once you have paid for all of your expenses

CHOOSING A REVENUE MODEL

For mobile apps and AI inventions, there are three main ways to earn revenue, outlined below. Keep in mind that you can use a combination of the three, like having in-app ads and paid features.

You can charge a one time fee to download an app providing a unique service. 
Google Nest is US$24.99 to buy
Minecraft costs US$11.99 to download.
Mini Metro game costs US$1.89 to download.
You sell goods, services, or special features within the app. The app can be free but the user can unlock features or buy items by paying for them.  
In Pokemon Go, you pay real money to buy “Pokecoins” to buy items in the game.
Spotify with ads is free, buy you can pay a monthly fee to listen without ads.
Spotify with ads is free, but you can pay a monthly fee to listen without ads.
With a Metaquest VT device, you purchase games and experiences to use with it.

You can include banner or pop-up advertising in your app. You get paid each time someone clicks on an ad.

Facebook places ads in your news feed and throughout the app.
Candy crush splash screen
Candy Crush is a game that places ads at the bottom of the screen
Youtube logo
Youtube plays ads between videos.

CALCULATING REVENUE

Once you decide on a revenue model, you can calculate potential revenue for your business. The process is:

  1. Calculate your market size,  or how many people could download your app.
  2. Calculate your market opportunity, or the number of people who you can reasonably expect to download your app.

Let’s look at an example to see how the process works. Click on the arrows to move through the process from year to year.

HSBC logo
This example courtesy of our friends at HSBC

BE REALISTIC

It may be tempting to overestimate your revenue, but that is not a good way to get people to believe in your product. Reasonable, well explained, and well researched numbers will help you make a great case for why your product will succeed.

WHAT ABOUT NONPROFITS?

If you are a nonprofit, you might not plan on selling anything. However, you will still need money to develop and maintain your product. Here are ways that nonprofits can do that.

REVENUE

You can still earn money through the different revenue models listed previously. The difference is that nonprofits don’t keep the profit like you would with a social enterprise or a for-profit company.

GRANTS

Organizations or governments sometimes give grants to support projects for social good. 

A grant is money that someone gives you that does not need to be repaid.

DONATIONS

A donation is similar to a grant but usually given by an individual. Donations are given with no expectation of anything in return.

ACTIVITY: CALCULATE REVENUE

Estimated time: 45 minutes

Calculate revenue for years 1-5 of your business

  1. Choose a revenue model (or a combination).
  2. Plan ahead! How will you get more users for your app each year?
  3. Fill out the Revenue section of the worksheet, following the HSBC example above. You will need to do some research and possibly survey your target audience to make the best estimate possible.
  4. Do not complete startup capital and operating costs sections in the worksheet. You'll do that in the next unit.
Note you can make a copy of the worksheet and edit as needed.
Open worksheet

REFLECTION

Your revenue model will be an essential part of your pitch and will support your solution.

If you are serious about creating a sustainable product and business, you must research and plan how you’ll get  people to download and continue engaging with your app each year.

Make sure to document this. You will need it when you write your business plan and record your pitch video.

wall mural saying "believe"

REVIEW OF KEY TERMS

  • Revenue – total amount of money your business earns
  • Operating costs – the cost of running your business
  • Profit – difference between amount earned and spent in a business
  • Revenue Model – a plan on how to make money
  • Market Size – how many people there are who could use your app
  • Market Opportunity – how many people you estimate will actually use your app or AI invention
  • Grant – money given to companies or organizations from governments or other organizations to support public services and social projects
  • Donation – money given to organizations, usually by individuals, to support their work

ADDITIONAL RESOURCES

This video provides more information on different revenue models for apps.

Operating Costs

  • Figure out how much money it will cost to run your business 
  • Estimate how much profit you’ll earn over 5 years

These are the activities for this lesson:

GETTING STARTED

When you’re first starting out your business,  you might think – we need some money to get started!

You might need to buy computers, hire people, or rent an office space. All of this costs money, and you aren’t making money from your business yet. So how do you get this money?

Money to help a business get started is called startup capital.

calculator and numbers on sheet
women shaking hands on business deal

You might need some investors to help you.

Investors are people who loan you money to help you get your business started, expecting to either

  • get their money back plus more
  • or receive something else in exchange.

While you don’t need to have startup capital, you can include it in your financial plan if you choose. 

Check out the information on startup capital in the Additional Resources section.

ONGOING BUSINESS EXPENSES

Think about how much money it is going to cost to run your business. The expenses you pay to keep your business running are called operating costs. Here are some examples of operating costs:

  • office spaces, computers, internet
  • employee salaries
  • app or online store fees
  • marketing and advertising

EXPENSE CATEGORIES

Here are some categories that most operating costs will fall into.

You might need to do research to figure out how much different items cost!

Click on each category to learn more.

girl working at tableThis includes things like computers, desks and chairs.

Ask yourself: 

  • What items do we need in a space for staff to do work?
  • Will they need computer hardware?

computer software graphicPrograms that help you design the product, manage data, or do other things your team can’t do on your own.

Ask yourself:

  • Do we have to pay for use of different databases or other services to run our app?

play store and app store logosThis will include putting your app in the Google Play or Apple App Store.

Ask yourself:

  • How much does it cost to put our app in the Google Play or Apple App Store?
  • What about selling our app through an online shop?

woman thumbing through magazineAdvertising in newspapers, printing fliers, using social media, etc.

Ask yourself:

  • What marketing strategy did we choose?
  • What will it cost?

female working at computer stationYou might hire people to help you build and get your app to your target market. 

Ask yourself:

  • Who will we hire?
  • How much will we pay them?

receipt and moneyThis includes rent, electricity, internet costs, and phones.

Ask yourself:

  • Do we need an office?

  • How much is it to rent?

  • How much does internet cost in our area?

COST EXAMPLE

For each expense, you will need to calculate costs. Here is an example to calculate the cost of paying employees in your business.

PLAN FOR THE FUTURE

Your operating costs are likely to go up over time. Revisit your revenue model from Unit 6, and look for things that might also make your operating costs go up. 

For instance, if you decided to build more features, you might need to also hire more people to build them. 

Also, if you decide to advertise your product more, you need to spend more money on marketing.

chart showing items increasing

On the other hand, you want to cut costs where you can.

For example, you might be able to work from your home, or find some free office space. Look for ways to save money, especially as you are starting out.

CALCULATE PROFIT

After you calculate your operating costs, you can calculate a profit projection, or an estimate of your business’ profit over 5 years.

It’s a simple equation!

Profit = Revenue – Operating Costs

What about nonprofits? 

Nonprofits can still have revenue streams, but they can’t keep any of the left over money.

Typically they will use this money to:

  • make their business better
    • e.g. pay their own workers more
  • or do more social good
    • e.g. provide more of their services to the community

If your business has the potential to make a lot of money, but you still want to have a social mission, try making your business a social enterprise instead.

community group

ACTIVITY: CALCULATE OPERATING COSTS

Estimated time: 30 minutes

Continue the Business Finances worksheet from Unit 6

  1. Review the Revenue model from Units 6 to help determine your costs each year.
  2. Fill out the Operating Costs section.
  3. Calculate profit: Profit = Revenue – Operating Cost
Note you can make a copy of the worksheet and edit as needed.
Open worksheet

NOTE: It’s okay if you have a negative profit in the first 2 to 3 years that you are in business.

However, over time you want your profit to go up. If you are still in the negative by year 3, you should review your revenue model and/or your operating costs.

Maybe you are not getting enough people to use your product quickly, or maybe your operating costs are too high.

REFLECTION

Here are a few questions to keep pondering about your business finances:

How much money is required to get your business started and generating revenue?
Why did you choose the revenue model you did?
How do you expect your business to grow?
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REVIEW OF KEY TERMS

  • Operating Cost – the money you need to spend to run your business.
  • Profit Projection – how much profit you think your business will earn over many year
  • Investors – people who give you money to start your business and in return, get some of the profit you earn
  • Startup Capital – the initial amount of money that helps you start your business, typically given through different types of investors
  •  

ADDITIONAL RESOURCES

Startup Capital

Many businesses get startup capital by asking people to loan it to them. These people are known as investors.

Once you get your business started, investors expect to either get their money back plus more, or receive something else in exchange.

Here are a couple of different ways to get people to invest in, or put their money into your business. Hover over each card to learn more.

Crowdfunding

Crowdfunding

A large group (crowd) of people each give small amounts of money that add up to a larger amount. This allows regular people to directly invest in your business. These people usually get something in exchange, like 10 free downloads of your app.

Examples: Indiegogo, Kickstarter, Kiva, Go Fund Me

Investors

Investors

Wealthy individuals who invest their own money early on in the business, but expect equity in exchange. Equity is like partial ownership, based on how much money they put into the company.

Examples: Peter Cowley, Jeff Bezos, Paul Buchheit

Venture Capital

Venture Capital

A group of professional investors (also known as a firm) who understand investment opportunities and risks in startup businesses. They research well to predict well that the startups that they invest in become successful in the marketplace. The money they invest comes from a variety of sources.

Examples: 3i, Khosla Ventures, SV Angel

Business Plan

  • Learn about the different parts of a business plan 
  • Plan and write your business plan

These are the activities for this lesson:

THE BUSINESS PLAN

A business plan is a proposal about how you will run your entire company. It is a written document that has important information about  

  • Your company 
  • Your goals 
  • How you will achieve your goals 

Think of it as a set of instructions that describes how and why you are building your business. It will incorporate many of the things you’ve already  learned so far– you are just putting all of it together!

girl working at computer

Let’s start with this video on crafting a powerful business plan.

PARTS OF THE BUSINESS PLAN

Here are the parts of the business plan that you’ll need to submit. Remember, your business plan can include charts and images that help explain your ideas – it doesn’t have to just be words!

Click on each part to learn more.

Suggested length: 1/2 page

The Executive Summary is the first section of your business plan and should be no longer than 1 page.

This is the first impression your reader has of your product and your business. It’s like a trailer for a movie—it has to give the reader an idea of what your business is, but also entice them to keep reading. 

Although this section goes first, you should consider writing it last! That way, you know all the details of your business plan and can summarize your thoughts well.

The Executive Summary for a standard business plan should include: 

  • Team name 

  • Team member names 

  • Your business name and location 

  • App name 

  • Products and/or services offered

 

Suggested length: 1 page

A Company Description is an overview of your business, which should broadly describe

  1. who you are
  2. how your company runs and functions (operates)
  3. what your goals are.

 

It gives more detail than the Executive Summary. It can include: 

  • The kind of business you are (corporation, social enterprise, nonprofit, etc.) 
  • Your mission statement 
  • The important people in your business and their roles 
  • Briefly cover:
    • What you plan to sell
    • Who your market will be 
    • Why business was created and why your team is passionate about it 
    • Immediate future goals
    • Long-term future goals

Suggested length: 1/2 page

In this section, you describe what you are selling and how the customer benefits.

Include details about how your product is being developed—if you are collaborating with anybody, or if you are creating the product by yourselves. Pictures or screenshots of your app can be very helpful. You can also include diagrams of how your product works.

This section should include: 

  • In-depth description of your product/service, emphasizing the specific benefits to the customer 
  • Advantages over the competition 
  • Product development: 
    • Current stage of the app’s development  
    • How the app will be built and delivered to the customer 
    • Research and development activities that may lead to new products and services

Suggested length: 1 page

Here is where you will show off all of the homework you did in Market Research.

Your market analysis should include: 

  • Description of the market: Who are the key competitors? 
  • How do you think your app will perform and why? 
  • Customer research: A sketch of your customers, including size and demographics 
  • Competitor analysis: a detailed evaluation, highlighting their strengths and weaknesses 
  • (Optional) Description of how your app changed in response to your competitor analysis

Suggested length: 1 page

In this section, you explain your marketing strategy, and how you will promote your product to potential customers.

Essentially, you will explain:

  1. How you will show people your app
  2. How you will get people to buy it
  3. What happens once people buy your app

To describe this, you’ll need:

  • Clear branding that amplifies your app’s purpose 
  • An in-depth strategy to reach target users 
  • Feedback from target users integrated into marketing plan (this should also be covered in the pitch video) 
  • Details about pricing, promotions, and distribution of the app 
  • How the company will function, from when the app is produced to when the app is delivered to the customer 
  • Information on the number and types of employees you have or will need

Suggested length: 1 page

In this section, you must show that your plan is financially achievable and how your business will be successful!

Use tables and graphs to show the information in a simple format. 

The key parts of your the financial plan are: 

  • Budget that clearly explains your revenue model and projected operating costs 
  • How much money you have now and how will you use it 
  • How much money you plan to make in the next 3-5 years and how (profit projection)

Here you can describe all of the key people that are in your company. Explain who does what in your business and justify why you have them on your team. If your team is small, you can demonstrate all the different key roles they play in your company.

You’ll want to provide: 

  • Names and profiles of your management team (first names only for safety reasons!)
  • Main responsibilities and past experience (what each team member contributed)
  • Job titles for your team members, like Chief Executive Officer (CEO) or Chief Technical Officer (CTO). You can get silly with it too, like Chief Idea Maker! 

Here are some examples of job titles. 

Also list of any advisers, such as your mentor(s).

TECHNOVATION EXAMPLES

Below are examples from previous Technovation Girls teams for each business plan section.

Executive Summary

Company Description

Products and Services