hey guys,
needed a huge favor. I am trying to model the financials for a smartphone app (income statement and balance sheet) similar to the google appson the smart phone but only exclusive for the public transport industry. I have no idea where to start i.e. how does the revenue and cost-structure look like. Does anyone have any idea on how could I potentially take this project off ground (any industry reports, or any suggestions on general modeling the smartphone apps)
thanks a lot in advance!
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You can start with uValue, the smartphone valuation app. http://people.stern.nyu.edu/adamodar/New_Home_Page/uValue.html
Not sure how the above is going to help. I also doubt you're going to be able to find a lot of info on this.
Here's me thinking out loud: What is the size of your market? So you're making an app for public transport users, so the definition of your market is going to be contingent on what city your building the app for etc. Obviously the market is going to be the constrained by the number of transport users who have smartphones so (avg smartphone ownership in US x (avg transport users x population of city) = ~~ target market. Most probably you'll have competitors so see how many downloads they've had and see how much of the market is left for you to take. You're going to have to make some large assumptions but that's what makes this thing fun. Once you've come up with your target % of market or target number of users you can base other numbers off that like marketing spend.
In terms of revenue, are you going to charge per download or will you get revenue through ads? Or in app purchases? Are there added features you can charge a premium for? All of these questions are going to be contingent on your base number of users you come up with.
In terms of cost structure, this is a giant hunch but most of your expenses are going to be in programming costs and marketing costs. I know nothing about programming except for the fact that you can find it cheaper in India but you'll pay in terms of quality. You can find some comparable data on sites like eLance or you can just get a quote from a reputable firm. Marketing is going to be pretty difficult to project, you're probably going to want to think of it as a certain amount of cost per user/download. The good thing is that social media marketing is relatively cheap per CPM and also is a great channel to use for your app.
I highly doubt you'll be able to get a loan etc so you're going to have relatively little debt. In terms of shareholder's equity the only question there is how much can you raise? Or how much are you willing to commit?
Let me know if this helped at all. If this is just because you want to build a transit app I would suggest skipping the modelling and starting with a cash budget. Cheers.
Thanks man- that helps a lot!
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