Every business, whether a startup or conglomerate, has decided that its first course of action after conceptualising its business and laying its foundation in the landscape is to go in this direction and leverage a robust mobile or web application because software development is expanding at a rapid rate and applications have taken a prominent position in the online space. Hence consulting a good web development company becomes a need.
Why wouldn’t it be more urgent to have an application under your company name given the rising data consumption through smartphones and growing consumer needs, customised by a leading web development company? After all, developing a mobile app for your company can help increase customer engagement, brand recognition, and visibility. Evaluation of the value of your mobile application is just as important—if not more important—than app development and maintenance for the business to ensure they get the maximum return on investment. You must have thought about this at least once: “What would my app be worth?”
Have you invested, and do you comprehend how the intended audience will use your app? As a result of its direct connection to app downloads and revenue, it aids in the sustainability and profitability of your business. If you have been thinking about having a digital face for your brand then you need to check out Evolfinity’s website. It is a leading name in the world of web development companies, providing many services including web development, mobile app development and all.
Continue reading to find the factors which decide the final value of an app, as stated by, Evolfinity, a leading web development company:
- Applications’ value factors:
The complexity of the business determines the specific valuation drivers for each app business, but even after developing the steps for app evaluation, certain conventional valuation metrics should be kept in mind. It is essential to consider user reviews, the number of downloads, any platform-based restrictions, the maintenance costs associated with the app, how well your product is branded and marketed, and customer satisfaction when pricing your application.
- Industry, the app is dedicated to:
How fierce is the market competition in your industry? Your app’s worth will depend on how urgent and necessary it is, whether or not there are already competing products on the market, and other factors. Do you believe there were obstacles in the way of your application’s entry into the market, to use an example of a similar application? Restrictions, whether related to the competition or not, may affect the price at which your app will be valued if you decide to sell it in the future. How quickly is the market expanding? Is your app designed in such a way that it can change over time to meet the needs of the audience and keep up with developments in the market?
- Should the value be the foundation of the application?
Although it may seem like the wrong way to approach app development, evaluating an app even before it is conceptualised or processing has begun can ensure that you have the greatest chance of success, as per some of the best developers working at Evolfinity, a leading web development company in Bangalore. Your profit depends on every element of the application, including the purpose, development, and marketing, all of which have the potential to either increase or decrease that profit. Your profit is determined by how much a buyer is willing to pay. You can better understand what your application is capable of and how much the intended audience will benefit from it by designing it around its value.
What demographic makes up the core of your audience? You can use this to estimate typical app usage. Keep a record of the channels you used to acquire the customer and the costs involved. Are customers choosing not to use the app? If yes, what is its most typical root cause? Your app would be worth more if you fixed it. Check the lifetime value of the consumer in a similar manner. How many downloads and active users does the app have each month? More such factors, such as whether or not the intellectual property is protected, whether or not your company complies with all licencing requirements, etc., will assist you in developing a strategy for a tailored evaluation of the value of a mobile app.
- The financial state of the app process:
Will users continue to use the newly developed app in the future? Will it be the most popular for the longest time, given the app’s niche? How long has the company been in operation, and how has it maintained its gross and net income over the last two to three years? Is the cost structure complicated? Will you benefit from the income split between recurring and one-time revenue? These are all questions that will have to be answered when assessing the long-term viability of the app.
- Standard Operating Procedure:
In order to increase the value of the app, thorough documentation of all the processes that were used in its development is required. The process will be streamlined, strategically planned, and scalable as a result. A comprehensive procedure should be developed to optimise the user onboarding process if an increasing abandonment rate is noticed. A Standard Operating Procedure (SOP) should be created in order to keep the app and its users’ experiences in sync.
- The app development process:
Have you considered the key main risk in your company’s operations? Losing a key employee who is involved in the processing and is in charge of the business’ expansion can have a serious financial impact. How frequently must the app be updated to maintain functionality? Updates are required to keep the app functional, feature-rich, and bug-free. Users may become fatigued by frequent updates, and the experience may be ruined by delayed updates. How much technical expertise was put into managing and running the app development operations?
- The revenue earned:
In order to apply the other valuation drivers, you must first establish the earning baseline. Included in this are your gross revenues and the organisation of your company. The seller’s discretionary earnings formula, which is appropriate for apps valued under $5 million, and the earnings before interest, taxes, depreciation, and amortisation (EBITDA) formula, which is suitable for larger corporations, are the two methods that can be used to determine the baseline earnings. Additionally, other factors should be taken into account when developing a tailored strategy for the evaluation of mobile apps.
- Code and supporting materials:
The top developers at Evolfinity, one of the best web development companies said that applications are built using code and architecture, so you must exercise due diligence, check the code’s quality, and have it documented in order to determine how much your app is worth. If the app was created using generally acknowledged industry standard protocols, it would be very beneficial. Knowing the application’s code and architecture can give insight into how it is structured, allowing buyers to confidently make a decision on the true value of an app.
- Abandonment of apps:
Customers not using their apps after downloading them due to a lack of features is one of the most challenging issues for developers and marketers. A high rate of app abandonment can have a negative financial impact. If you notice that the abandonment rate is steadily increasing, you should develop a procedure to optimise the user onboarding process. This will help you keep your audience engaged.
When discussing risks, this needs to be taken into account on a molecular level, as the risk is higher and the pool of potential customers is smaller for young apps. The age of the app will be a benefit to the company, and if you have a successful track record and the app’s user base is still expanding, you can definitely get more money for it. A comprehensive procedure should be developed to optimise the user onboarding process if an increasing abandonment rate is noticed.
Utilize the available analytics tool to monitor the traffic and sources of all documents that lead to your website, your app, or the app store. Along with monitoring and enhancing the performance of the app and the company, this will give you an exact valuation. Additionally, create an effective onboarding process with a series of interactive and engaging tutorials to ensure that users are informed about and comfortable with the platform before using it. To optimise user onboarding, create a comprehensive process that starts with improving the performance of your app and website to make them more engaging.
The bottom line:
When followed correctly, these steps will help ensure the current success of the application and business by assisting you in making an informed decision centred on the value of the application throughout the process. If you decide to sell the business in the future, you can feel secure knowing that you have a successful exit strategy. Tracking and monitoring the traffic from where it originates is an important step to ensure your current success.
Thus, it has become imperative to have a digital presence in today’s world.
Excellent web development services are offered not only in India but also in many other countries by Evolfinity, a well-known web development company in Bangalore. Companies can work with Evolfinity to build an effective website that is tailored to their requirements and keeps up with current web development trends. Making use of Evolfinity, a web development company in Bangalore, will guarantee that your company is using the most recent website technology. This will make sure that your website visitors have the best possible experience and make it simpler for them to find the goods and services you provide.
Contact Evolfinity today, if you haven’t yet, and get a website made especially according to your needs and wants, by India’s one of the best web development companies.