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Updated Jul 05, 2024

Do You Need an App for Your Small Business?

The mobile market is skyrocketing. Should your business get in on the app action?

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Sean Peek, Business Ownership Insider and Senior Analyst
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

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Mobile apps have gained traction as retail and marketing tools. Statista found consumer spending in app marketplaces reached $171 billion in 2023. Proliferating with progressively advanced features appealing to consumer desires, apps are increasingly attractive to small local businesses.

Bars, restaurants, flower shops, hairdressers, medical professionals, and community-based goods and services companies are using apps to improve the customer experience. But does every business need an app? If you’re thinking about investing time and money into building a mobile app for your business, we’re breaking down the factors you need to consider.

How to know if you need an app

Mobile device popularity is skyrocketing — people spend a vast amount of time interacting with mobile apps on their smartphones and tablets. According to Pew Research, about 97 percent of Americans own some kind of cellphone, while 85 percent own a smartphone. Across the globe, hands are busy tapping away on mobile apps; they accounted for $171 billion in gross consumer spending worldwide in 2023 — up $4 billion from 2022, according to the Statista report.

The question isn’t whether or not your company can benefit from its own mobile app, but under what circumstances is it practical to develop and maintain an app; keep in mind the tall task of consistently infusing it with fresh content and compelling features that keep customers coming back.

Here are some factors to consider before deciding whether your business needs an app.

Editor’s note: Looking for mobile app development for your business? If you’re looking for information to help you choose the one that’s right for you, use the questionnaire below to receive information from a variety of vendors for free.

What is your goal?

When you’re thinking about developing a mobile app for your business, consider how people would use it and what precise functions you’d need.

A dedicated mobile app can assist current and future customers in many ways. It can introduce newcomers to your business; also, it can better serve existing customers by promoting new products and services, special offers, loyalty programs, and other perks for in-store or remote commerce.

A mobile app also provides a constant, real-time connection to your customers. They can check your hours, find business locations, get directions, view available merchandise and access any other information you choose.

FYIDid you know
A well-designed app makes all relevant information and services available in a minimal number of taps. If your app doesn't make life easier and enhance value for your customers, you're doing it wrong.

Who are your customers?

When considering creating a mobile app, you need to identify your customer base and their likelihood of using it.

Most businesses seek broad customer appeal, with a consumer base ranging in age from 18 to older than 65. According to previous research from App Annie, now known as data.ai, younger users (13-24 years old) visit apps more than twice as often as those over 45. However, they are likely to stop using an app if it doesn’t serve their needs.

Those over 45 prefer mobile browsers over apps; however, they tend to spend 25 percent more time in apps than younger users when they do use them. Between these two ranges, users 25-44 years old engage highly with apps, particularly retail apps.

If your target audience doesn’t have an affinity for mobile apps, then it probably doesn’t make sense to build one. Which brings us to the next question.

How mobile-oriented are your customers?

Unsurprisingly, the same group that loves smartphone apps and looks forward to downloading new ones spends an astronomical amount of time playing around with them. Younger audiences use apps daily and understand how they function. They consume a significant amount of information during their mobile use.

Due to the appeal of retail apps, users between 25 and 44 years old are the perfect audience if you’re looking to sell your products online via an app or advertise an in-store experience.

Those at least 45 years old don’t have as much knowledge of mobile apps and how they work — they’re more comfortable with desktop computer use. They’re more likely to use an app if it has familiar features and an easy-to-use interface.

TipTip
If you're marketing to millennials, also known as Gen Y, word of mouth is key. These users are more likely to buy from a brand a friend recommends.

What do your customers want?

As you weigh building a dedicated app for your business, keep in mind what customers seek. Consumers prefer apps that provide a convenient and easy-to-use interface; they also prefer apps that have better prices or promotions not found on other platforms, such as the business’s website.

A Heady study showed that younger consumers (between the ages of 16 and 34) were more likely to choose an app because of personalization. Meanwhile, those with an annual income of less than $50,000 are more likely to prioritize apps that integrate the use of mobile wallets for payment, such as Apple Pay and Google Pay. Almost half of respondents said they would download an app if it offered special promotions. [Check out our guide to customer engagement.]

How does an app improve on your current website?

When considering an app vs. a mobile website, keep in mind that apps offer better ease of use and more convenience. A dedicated app can leverage your current online presence — even if your website is designed as a mobile-friendly, responsive site that easily transitions from desktop to mobile browsers and back.

It’s true that a website offering general information about your company is a necessity, just like having a telephone. But also like a telephone, your customers must expend effort to use it by searching out your homepage, bookmarking your site and navigating to specific information. Even the friendliest mobile website is more complex and time-consuming than a mobile app.

Apps are inherently mobile. They don’t have to adapt to a different format, so they can be geared toward more immediate, customer-centric concerns. Users prefer apps over mobile websites because they offer more personalization and efficiency. In addition, they boast other features like notifications, offline mode and quick loading times.

FYIDid you know
Many internal apps can benefit your business and its operations. This includes small business organization apps, secure messaging apps and small business productivity apps.

What you need to know when building an app

Mobile app development is a constantly changing landscape. Businesses need to keep several variables in mind when building out, as well as maintaining, their apps.

Your strategy

If your research indicates you have a realistic goal for an app that would serve your customers better than other mediums, the next step is to strategize your approach. Can you produce an app using an off-the-shelf app builder? Or should you hire a professional mobile app developer to create one for you from scratch?

Well-known app builders include AppMachine, BuildFire, GoodBarber and Shoutem. These tools are excellent resources for those who can spend the time to learn how to use them. While using software to design your app is not especially difficult, it takes time and resources — which may be something you don’t have. This is especially the case if you also have a business to run. In that case, consider pulling in professional expertise to lend a hand.

Your budget

Depending on whether you opt for a mobile design and experienced company to custom-design your app or a do-it-yourself app maker, expect to plunk down some cash. It’s tough to generalize costs across a vast range of businesses and app requirements, but here’s some ballpark pricing.

  • DIY services: DIY app services are inherently less expensive and can offer exciting, professional-looking results. Most vendors charge monthly fees from $20 and up, depending on your app, devices and marketplaces. Charges can also include hosting fees and app store placement. Make sure the company you choose is prepared to deal with regularly changing app store requirements from the likes of Google and Apple.
  • Professional developers: While costs vary widely, professional app development in the U.S. can range from $50 to $250 per hour. Mobile app development company SpdLoad says developing a simple app can cost up to $60,000, while more complex apps can push six figures. Companies must also consider budgeting for updates and marketing, while apps requiring a back-end server or integrated APIs will cost even more. Building for both iOS and Android platforms will also add to your expenses. The more features, complexities and platform compatibility you build into your app, the higher the costs will be.
  • Hybrid approach: You can also economize and enhance your professional results with a hybrid approach. Start with a DIY app maker, but use one that also offers in-house services. This way, you can devise the basic wireframe of your app first and then hand it off to the pros for advanced, specialized features. A hybrid approach costs more than doing everything yourself; however, it’s cheaper than having a firm design your app from scratch.

Your customers

The key to any successful app is knowing your customer base. Businesses should conduct market analysis with a focus on competitor applications, customer use cases and feature selection within the app. Building a fully functional app from the start can be time-consuming. Businesses may find it a better value to iterate upon an app that initially prioritizes certain features and elements based on what your customers are hoping to use the app for.

Your target platform

Early in the development process, businesses need to identify what platform they want their app to run on. A wider range of devices run Android operating systems, but Apple’s iOS has a larger market share. Ideally, a business will develop an app for both platforms; however, that can be a time-consuming and expensive endeavor. When first launching an app, businesses may choose to focus on a single platform that a wider share of their customers use before expanding compatibility.

Data security and handling

Before customers start to use the app, businesses need to put in place methods for ensuring the data security and safety of their users’ information. This may entail updates and code fixes both for the app and the back-end infrastructure hosting the app. If your company and mobile app vendor aren’t equipped to safeguard your app, you may want to rethink moving forward with the building process.

Operating system updates

About every six months or so, there are likely to be changes to operating systems. Some Android and iOS updates can change how apps operate. To avoid incompatibility or cybersecurity issues, it’s critical to stay on top of updates and new developments. Keep in mind that updating your mobile app so it continues to function will cost money.

App maintenance requirements

After launching an app, businesses need to continue to maintain it. As mentioned above, this can include updating the app to maintain compatibility with the operating system, as well as addressing bug fixes. Companies may also need to update the app in response to customer feedback and any business changes.

Did You Know?Did you know
Whether or not you develop a mobile app, it's essential to optimize your business website for mobile devices. Google looks at mobile page load speed as a critical metric when determining your website's search ranking.

6 key steps in app development

Regardless of the specific app you want to bring to life, the app development process has six key steps. Breaking the project down into these simple phases will help you develop your app efficiently.

  1. Idea: Figure out what problem your app will solve, who you’re targeting, why its features are important and whether there are similar apps already out there.
  2. Design: Create an interface that lets users easily navigate the app.
  3. Development: Write the code for your app, develop the code and start preliminary testing.
  4. Testing: Determine the app’s quality, discover any malfunctions and learn what you can improve.
  5. Launch: Once your app is bug-free and ready to go, publish it on marketplaces like the Apple App Store and the Google Play Store.
  6. Marketing: Create a marketing plan to get users to download your app and give feedback on improving their engagement.

Considering your app’s purpose and your budget

A well-thought-out dedicated mobile app is likely to benefit your small business. Many users already enjoy the ease e-commerce provides; plus, the mobile arena’s popularity means plenty of customers will eagerly anticipate your app. It’s up to you to provide the services and uses they crave. But no matter how much you want to build an app, developing one is only worthwhile if it provides a great user experience and you have the budget to maintain it for the long term.Jeremy Bender and Jackie Dove contributed to this article.

author image
Sean Peek, Business Ownership Insider and Senior Analyst
Sean Peek is the co-founder of a self-funded small business that employs more than a dozen team members. His years of hands-on entrepreneurial experience in bootstrapping, operations management, process automation and leadership have strengthened his knowledge of the B2B world and the most pressing issues facing business owners today. Peek uses his expertise to guide fellow small business owners and aspiring entrepreneurs in the areas of marketing, finance and software technology. Peek excels at developing customer bases and fostering long-term client relationships, using lean principles to drive efficiency and cost-saving, and identifying growth areas. He has demonstrated his business savvy through collaborations with Forbes, Inc., Entrepreneur and the U.S. Chamber of Commerce.
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