Development and Promoting of Calcron Android Application - Example

Financial Application Business plan: Calcron Android Application Your Name (First M. Last) School or Institution Name (University at Place or Town, State) Financial Application Business plan: Calcron Android Application Kurt production is a technology-based organisation that craves for creativity and innovation. The company is very willing to invest in multiple new projects in order to assess the market demands. Recently During us, along with company's creative development team, came up with the idea to develop an all-new mobile application. So, in this paper, we will be discussing the business and development plan regarding this new application. Executive Summary The success rate of most mobile apps has risen dramatically over the past few years due to the excessive popularity of smartphones (Darcey and Conder, 2012). We wanted to develop an application that mostly focuses on the students. We noticed that students now a day has been going through a lot of financial problems, and most of them are unable of keeping track of their income, costs or loans. We wanted to make an application that can help the students in these scenarios. In order to make a business plan for the application, we needed to assess the market demands. This was necessary because we had to make a decision based on this analysis whether to release the product into the market ourselves or sell the technology to an established firm (Scott, 2015). For this analysis, multiple steps were taken. First, we had to see if there any actual demand for this kind of application in the market. So, we started by conducting an online survey via our website and social media sites. Our target users were students from age 17-25. We also had several universities to conduct the survey at their campus on behalf of us. The result of the survey was very much positive. Then we had to establish a business model for the application. Like any other mobile app, we had two options, either the subscription model or the pay-per-download model. The subscription model would charge the users $1.45/ month. And the pay-per-download would charge them $3.49. The price was set by comparing other financial application in the market. The next big challenge was to determine the OS platform for the application. We had to choose, on which operating system we wanted to release our application first. As the initial release of the app will be based on the Australian region, so we conducted a survey again to see what type of phone students use the most. Based on that, we decided to launch the application in the google play store initially. After reviewing our sales forecast, we decided that it would not be the best idea to release the application into the market ourselves. Because the past performance of similar apps indicates that those companies usually lack long-term assets. So, in this scenario, any bad investment can cause major harm to the organisation. Consequently, we came up with the decision to initially release the product ourselves, and if it gains popularity, then we would sell its rights to another firm. We also developed a prototype of the application so that we can get as many reviews as possible and work out the technical issues before release (Darcey and Conder, 2012). Past performance of the Company Past Performance 2012 2013 2014 Sales $ 10 560 743 $ 7 450 158 $ 9 450 684 Gross Margin $ 1 266 248 $ 919 875 $ 957 550 Gross Margin % 96,58% 94,21% 95,35% Operating Expenses $ 406 692 $ 431 701 $ 439 900 Balance Sheet 2012 2013 2014 Current Assets Cash $ 2 296 302 $ 2 485 369 $ 2 905 895 Other Current Assets $ 2 051 778 $ 3 861 796 $ 1 773 769 Total Current Assets $ 4 348 080 $ 6 347 165 $ 4 679 664 Long-term Assets Long-term Assets $ 3 422 $ 3 429 $ 13 025 Accumulated Depreciation $ - $ - $ - Financial Assets $ 38 050 $ 38 050 $ 38 050 Total Long-term Assets $ 41 472 $ 41 479 $ 51 075 Total Assets $ 4 389 552 $ 6 388 644 $ 4 730 739 Current Liabilities Accounts Payable $ 1 898 481 $ 2 423 808 $ 1 620 205 Current Borrowing $ - $ - $ - Other Current Liabilities $ 247 448 $ 1 368 286 $ 124 234 Total Current Liabilities $ 2 145 929 $ 3 792 094 $ 1 744 439 Long-term Liabilities Total Liabilities Paid-in Capital $ 100 000 $ 100 000 $ 100 000 Retained Earnings $ - $ - Earnings $ 2 143 622 $ 2 496 550 $ 2 886 300 Total Capital $ 2 243 622 $ 2 596 550 $ 2 986 300 Total Capital and Liabilities Other Inputs $ 4 389 552 $ 6 388 644 $ 4 730 739 Payment Days 30 30 30 Functions of the Application Calcaron is a complete mobile application that is suitable android operating system with a complete single user interface. The main function the app is to calculate the daily financial activities of the users to provide suitable expense and saving plans. The application lets the user sync his bank account. The user has the option to key in his monthly or weekly income. Then the application takes a note of the users' daily expenses based on the account activities. The users also have the opportunity to add extra expenses to their expense sheet inside the app. Then the application uses an advanced sorting algorithm to create a proper budget plan for the user (Darcey and Conder, 2012). The user has the opportunity of choosing between multiple budget plans. After choosing a budget plan, the application will monitor the users account activities. If their cost exceeds their budget limit, then the app will send notifications to the user. In this case, the application will also provide an alternate plan for the next week or month to adjust this extra cost. If the user's expense remains within the estimated limit, then the application will sort the extra money as savings. The user will be notified about the amount of his savings on a weekly basis. Another major function of the application is to track student loan opportunities. If a user is in need of a loan, the app will search for possible student loan opportunities and notify the user about the possibilities. If the user is already under a loan, then the application will create his budget plan according to that loan. The application also lets the users apply for any available student’s loans directly via the app. Other features include keeping track of bills and emergency expenses. So, the application acts as the personal accountant of the user. Price and User estimates As we have discussed before, this application is being solely developed for the use of students. Our target is mainly university students and freelancers between the age of 17-25. We estimated that the application should have around ten thousand users in Australia after three months of the release of the first version. We have set the price of the application inconvenience to the students. After carefully analysing the market, we noticed that most financial apps use pay-per-download model and set a price around $4-5. We have decided to use both the pay-per-download model and the subscription model because it is convenient for the students as they can subscribe to the app at a lower price and delete it if they don't like its functions. Users can stop their subscription and buy the whole product any time they want. The buying price for the app will be $3.45 and subscription price will be $1.45/month. Development Instructions The application will be based on java and sort algorithms. The interface should be simple, with only a single screen (no appearance of any split screens). The user should have the choice to input any information on his own. The registration method can be done by both e-mail and Facebook. It would need an access to the user accounts data server. So, it should have a sync option. The application will only have the function to observe the data, not to manipulate it. The calculations should be done using at least three different functions so that the app is able to provide multiple budget recommendations at once. Sorting algorithm should be able to provide the best plan by analysing these different functions. Any changes in the budget or at the accounts trigger a notification in order to notify the user. The interface should have a separate notification panel. The application should be able to access the devices native features like the geographic location and the media. Other Estimates We have estimated that the application needs at least 3 for development. After development, we have allocated one month to test the prototype and sort out the technical issues. Therefore, from development phase to the marketing of the app, it might take us around 5 months from now. Also, our development team will consist of only one lead programmer, so that functions do not get very complicated and it will also keep the development cost to a minimum. The average cost for the development of these kinds of apps is $7000. Development costs include hiring programmers, providing materials and test spaces. We have allocated another $1500 for market costs such as license, and any legal issues. According to our estimates, we should have at least ten thousand pay-per-download users within the first three months of the release. So, we should be able to recover the development cost within the first month of release and hope to get a revenue of at least $20000 in the next two months. These are just estimated as any technology based product can be a risky maneuver in the market, because it is hard to predict its success ratio (Callaghan, Fribbance and Higginson, 2014). Sales Estimates To determine the applications sales estimates for the upcoming three years, we need to consider two different scenarios. The worst-case scenario that assumes we have no title sponsors in the market and are not under contract with any firm. And the best-case scenario that assumes that we have more than one sponsor to back up our advertising cost or we are under any legal contract with another firm regarding the application. For the sake of calculation, we will only consider the pay per download model. For worst-case scenario, Sales 2015 2016 2017 Paying users 34,500 35,200 35,700 Sponsors revenue 0 0 0 Total sales 34,500 35,200 35,700 For best-case scenario, Sales 2015 2016 2017 Paying users 68,5000 70,2000 70,7000 Sponsors Revenue 100,4500 110,4500 115,4500 Total sales 1689500 8124500 1861500 CASH FLOW PROJECTION Current Period Preceding Period 5/04/15 to 06/30/16 05/04/16 to 06/30/17 BEGINNING CASH ON HAND 24,110.00 31,885.00 ADD: CASH RECEIPTS Cash Sales 12,000.00 12,600.00 Collections from user subscription 35,000.00 36,750.00 Loan - - Interest Income 250.00 250.00 Income Tax Refund - - Misc. Cash Receipts 50.00 50.00 TOTAL CASH RECEIPTS 47,300.00 49,650.00 LESS: CASH PAYMENTS COST OF DEVELOPMENT: Direct Product/Service Costs 13,000.00 13,650.00 Salaries-Developers 1,900.00 1,995.00 Payroll including taxes 225.00 236.25 Supplies 400.00 420.00 Other Costs 50.00 52.50 Sub-Total Cost of development 15,575.00 16,353.75 OPERATING EXPENSES: Advertising and Promotion 300.00 315.00 Technical updates 50.00 52.50 Feedback service 25.00 26.25 Business Licenses and Permits 30.00 31.50 Charitable Contributions 50.00 52.50 Computer and Internet 200.00 210.00 Continuing Education 125.00 131.25 Dues and Subscriptions 25.00 26.25 Insurance 600.00 630.00 Employee benefits 200.00 210.00 Commercial Account Fees 600.00 630.00 Assorted Expense 25.00 26.25 Office Supplies 50.00 52.50 Payroll Processing 200.00 210.00 Subscription cancelation 20.00 21.00 Advertising on physical location 50.00 52.50 Accounting and legal services 250.00 262.50 Habitation 1,600.00 1,680.00 Company Rental Payments 525.00 551.25 Salaries-Indirect 4,000.00 4,200.00 Taxes 425.00 446.25 Contractor - - Telephone 500.00 525.00 Sponsored advertising 100.00 105.00 Conveniences 900.00 945.00 Website Development - - Sub-Total Operating Expenses 10,850.00 11,392.50 OTHER EXPENSE PAYMENTS Interest Expense 700.00 735.00 Income Tax Expense 5,200.00 5,460.00 Cash Disbursements to stakeholders - - Sub-Total Other Expense Payments 5,900.00 6,195.00 TOTAL CASH PAYMENTS 32,325.00 33,941.25 NET CASH CHANGE 14,975.00 15,708.75 CASH POSITION (end of month) 39,085.00 47,593.75 Conclusion There are several factors to consider when it comes to developing apps. It is very important to analyse the market conditions and demands closely before going into development. The success of the product depends on which strategy the company chooses to release it. A well-developed product is not necessarily a successful product, but a well-planned product is bound to be a success. References Callaghan, G., Fribbance, I. and Higginson, M. (2014). Personal finance. 1st ed. Basingstoke: Palgrave Macmillan. Darcey, L. and Conder, S. (2012). Android wireless application development. 1st ed. Upper Saddle River, NJ: Addison-Wesley. Scott, D. (2015). The new rules of marketing & PR. 1st ed. London. Read More