You've got this brilliant mobile app idea brewing in your head—something that could genuinely help people or solve a real problem. But then comes the moment that stops most entrepreneurs dead in their tracks: how much money can this thing actually make? I've worked with hundreds of app developers over the years, and this question causes more stress than almost any other aspect of building a mobile app. The uncertainty is overwhelming.
Here's the thing: setting revenue targets isn't just about picking a number that sounds impressive to investors or that covers your costs. It's about creating a roadmap that connects your app's potential with real financial planning and achievable business goals. Get it wrong, and you'll either set targets so low that you limit your app's growth, or so high that you're setting yourself up for disappointment—and potentially running out of money before you see success.
The difference between apps that succeed financially and those that don't often comes down to one thing: realistic expectations backed by solid research and planning
Throughout this guide, we'll walk through a systematic approach to understanding your mobile app's revenue potential. You'll learn how to research your market properly, choose the right monetisation model, calculate realistic user numbers, and factor in all those costs that many people forget about. By the end, you'll have the tools to set revenue targets that are both ambitious and achievable—targets that serve your business goals rather than working against them.
Understanding Your App's Revenue Potential
Before you start dreaming about making millions from your app idea, we need to have a proper chat about what's realistic. I've worked with hundreds of clients over the years, and the ones who succeed are always the ones who understand their app's true earning potential from the start—not the ones who think they'll be the next overnight success story.
Your app's revenue potential depends on several key factors that work together like pieces of a puzzle. The category your app sits in makes a huge difference; gaming apps typically earn through in-app purchases and ads, whilst productivity apps might charge monthly subscriptions. Social apps often struggle to monetise early on, but can become goldmines once they reach scale. Business apps targeting companies can charge much higher prices than consumer apps, but they're also harder to sell to.
Market Size Matters More Than You Think
The size of your potential market will cap how much you can realistically earn. If you're building an app for dog groomers in Manchester, your market is tiny compared to a fitness app that could work globally. This doesn't mean niche apps can't be profitable—they absolutely can—but you need to understand the trade-offs between competitive and niche markets and price accordingly from day one.
Your Competition Sets the Bar
Look at what similar apps are charging and how they're making money. If every competitor is free with ads, launching as a premium app will be tough. If the market leader charges £4.99 monthly, you probably can't charge £19.99 straight away. Your revenue potential is heavily influenced by what users already expect to pay in your space.
Setting Clear Financial Goals
Right, let's talk about something that makes most app developers squirm a bit—setting proper financial goals for your mobile app. I get it; numbers can feel overwhelming, especially when you're passionate about your idea and just want to build something brilliant. But here's the thing: without clear financial planning, even the best apps can fail commercially.
Your financial goals need to be specific, measurable, and tied to your business goals. Saying "I want to make loads of money" isn't a goal—it's a wish. Instead, you need to think about what success actually looks like for you. Are you building this app to replace your salary? Fund your next venture? Or maybe you just want to cover your development costs and break even?
Short-term vs Long-term Targets
Most successful mobile app developers I work with set both short-term and long-term financial targets. Your short-term goals might focus on covering development costs within the first six months, while your long-term goals could be about building sustainable monthly revenue.
Write down three specific financial milestones: what you need to break even, what would make you happy, and what would exceed your wildest dreams. Having these three numbers gives you perspective on what's realistic.
Making Your Goals Realistic
The key word here is realistic. I've seen too many app projects fail because the financial expectations were completely disconnected from market reality. Your goals should stretch you but not break you.
- Calculate your minimum viable revenue to cover costs
- Research what similar apps are actually earning
- Factor in app store fees and payment processing costs
- Set monthly and yearly targets that build progressively
Remember, your financial goals will guide every other decision you make about your app—from features to marketing spend. Get this foundation right, and everything else becomes much clearer.
Researching Your Market and Competition
Here's the thing about market research—most people skip it or do it badly, then wonder why their revenue targets are completely off. I see this happen all the time. Someone has a brilliant app idea, gets excited about the potential money they could make, but never actually looks at what's already out there.
Start by searching the app stores for apps similar to yours. Download the top ones and actually use them for a week or two. Look at their pricing, read their reviews (especially the negative ones), and check out their update frequency. This tells you loads about how they're performing and what users really want.
Understanding Market Size
You need to know how big your market actually is. A fitness app targeting marathon runners has a much smaller audience than one for general fitness tracking—and that affects your revenue potential massively. Use tools like App Annie or Sensor Tower to get download numbers and revenue estimates for competitor apps. These aren't perfectly accurate, but they give you a realistic ballpark figure.
What Your Competition Earns
Pay close attention to how successful apps in your category make money. Are they using subscriptions, one-time purchases, or advertising? What are their price points? If every fitness app charges £2.99 monthly, charging £19.99 might be ambitious unless you offer something genuinely different.
Don't just look at the success stories either. Check out apps that launched with fanfare but disappeared after six months. Their app store pages often reveal what went wrong—poor reviews about pricing, lack of features, or simply being too late to market. Learning from these failures is just as valuable as studying the winners when setting your own revenue expectations.
Choosing the Right Revenue Model
Your mobile app can make money in several different ways, and picking the right one is absolutely massive for your financial planning. I've worked with businesses that switched revenue models three times before finding what worked—and each switch cost them months of development time and thousands in lost revenue.
The main options are pretty straightforward. You can charge people upfront to download your app (paid apps), offer it free but include adverts (ad-supported), or give it away free with optional purchases inside (freemium). There's also subscription models where users pay monthly or yearly, which works brilliantly for apps that provide ongoing value.
Match Your Model to Your Users
Here's the thing—your revenue model needs to match how your users actually behave. If you're building a simple utility app that people use once in a while, subscriptions probably won't work. But if you're creating something people use daily, like a fitness tracker or productivity tool, subscriptions make perfect sense.
The best revenue model is the one your users are actually willing to pay for, not the one that looks best on paper
Consider Your Business Goals
Different models suit different business goals. Want steady, predictable income? Subscriptions are your friend. Need quick cash flow to fund development? Paid downloads might work better. Building a massive user base first? Freemium could be the way forward. Each choice affects your financial planning differently—subscriptions give you recurring revenue but take longer to build up, whilst paid apps give you money upfront but can limit your user numbers. Understanding how to avoid common pricing mistakes will help you make better decisions about what matters most for your specific situation and business goals.
Calculating Realistic User Numbers
Getting your user numbers right is probably one of the trickiest parts of setting revenue targets. I've seen so many app owners get this completely wrong—either being wildly optimistic or painfully pessimistic. Both approaches will mess up your planning.
Let's start with the basics. Your total addressable market might be millions of people, but that doesn't mean millions will download your app. The reality is much smaller. Most successful apps capture just a tiny fraction of their potential market, and that's perfectly normal.
Start with Conservative Downloads
For your first year, think small. Really small. If you're launching without a massive marketing budget, expect maybe a few hundred to a few thousand downloads in your first months. This isn't being negative—it's being realistic. Even apps that eventually become successful often start with modest numbers.
The key metric you need to understand is your conversion rate from downloads to active users. Not everyone who downloads your app will actually use it regularly. Industry averages suggest that only about 20-25% of people who download an app will still be using it after 90 days. Building an app that people actually want to use is crucial for improving these retention rates.
Factor in Growth Over Time
Your user base should grow month by month, but this growth depends on your marketing efforts and word-of-mouth. A good rule of thumb is to plan for gradual growth rather than explosive overnight success—unless you've got a massive marketing budget or some unique advantage.
Remember that user acquisition gets more expensive over time as you reach beyond your core audience. Your first 1,000 users might come relatively easily, but getting to 10,000 will require more effort and investment. Build this reality into your projections and you'll avoid nasty surprises later.
Planning for Development and Marketing Costs
Here's something most people don't think about when setting revenue targets—you need to spend money before you make money. Development and marketing costs are the two biggest expenses that'll eat into your budget, and if you don't plan for them properly, your financial planning will be completely off.
Development costs vary wildly depending on what type of mobile app you're building. A simple productivity app might cost £15,000 to £30,000, whilst a complex social media platform could easily hit £100,000 or more. Remember, this isn't just the initial build—you'll need ongoing updates, bug fixes, and new features to keep users happy. Planning for unexpected maintenance costs is essential, so budget at least 20% of your initial development cost each year.
Marketing Costs That Actually Matter
Marketing is where most people underestimate their spending. Getting users to download your app isn't cheap anymore; the competition is fierce and app stores are crowded. User acquisition costs can range from £2 to £10 per download, depending on your category and target audience.
You'll need money for app store optimisation, paid advertising, social media marketing, and possibly influencer partnerships. Don't forget about the cost of creating marketing materials—videos, graphics, and promotional content all add up quickly.
Set aside 30-40% of your total budget for marketing in the first year. Most successful apps spend significantly more on marketing than they do on development.
Building Realistic Timelines
When planning your business goals, factor in that it typically takes 6-12 months to see meaningful revenue from a mobile app. Your development might take 3-6 months, then you need time to build an audience and optimise your revenue streams. Cash flow planning becomes critical—you need enough runway to survive those early months when you're spending but not earning.
Conclusion
Setting realistic revenue targets for your app isn't about picking a number that sounds good—it's about doing your homework and being honest with yourself. Throughout this guide, we've walked through the steps that will help you build targets based on real data rather than wishful thinking. Understanding your app's revenue potential, researching your competition, and choosing the right monetisation model are all pieces of the same puzzle.
The truth is, most apps don't make their creators rich overnight. In fact, most don't make money at all in their first year. That's not meant to discourage you—it's meant to keep your expectations grounded in reality. When you set targets that are achievable, you're more likely to hit them, and hitting your targets feels much better than constantly falling short of unrealistic ones.
Don't forget that your revenue targets aren't set in stone. Markets change, user behaviour shifts, and new competitors appear. What matters is that you start with a solid foundation based on research and realistic user numbers. You can always adjust your targets as you learn more about your audience and how they interact with your app.
Building a successful app is a marathon, not a sprint. The apps that generate real, sustainable revenue are the ones built by teams who understand their market, know their costs, and set targets they can actually achieve. Take your time with this process—your future self will thank you for it.
