A mobile app developer can find a treasure trove in a near-frozen economic environment. While brick-and-mortar businesses are expected to suffer the most from the downturn, mobile apps offer the perfect opportunity for long-term growth. With the right strategy, mobile apps can help businesses overcome this economic downturn and become a viable option for business owners. This article will focus specifically on three key areas of mobile app development: Adaptivity and Balance Sheets.
Investing in a Mobile App
The global recession of 2007-08 had devastating effects on the economy. However, the most successful companies emerged from this period with an innovative strategy. By staying connected to customers, they were able to serve them better than their competitors. Conversely, those who failed to invest in new technologies or innovation saw their businesses completely disrupted. In other words, the classic failures were those who were slow in investing in new technology.
Businesses should not underestimate the power of the mobile space. The economic downturn will affect the brick-and-mortar world the most, but it can actually be a golden opportunity for those who are able to invest in innovative mobile solutions. This is especially true when the app is designed with the user in mind. A quarter of the global population cannot leave their homes as much as they used to. With the increase in smartphone usage, the potential market for mobile apps has grown exponentially.
As a result, investors should consider making sure they have enough cash on hand to weather the recession. The recent recession has caused volatility in the investment markets. However, this turmoil is also a chance. This question is not always easy to answer. The historical patterns of past recessions do not provide many clues. Yet, they do show that recessions end eventually. Six recessions occurred in the U.S. from 1973 to 2009. Although they were all brief, all of them ended and the economy eventually recovered.
One of the most successful companies emerged from a recession. Netflix is now worth $34 billion. Blockbuster, which filed for bankruptcy in 2010 and dropped its DVD-via-mail service, closed its last retail store three years later. A business can survive in difficult times if it has a strong entrepreneurial spirit. Entrepreneurs can take risks when the economy is weak.
Focus on companies with strong balance sheets
A strong balance sheet is a key component of any business. It can help businesses survive economic downturns while allowing them to thrive in times of prosperity. A strong balance sheet can be achieved by having a well-balanced capital structure and intelligent work capital. A strong balance sheet allows a company to grow without incurring large amounts of debt. It also means that its capital structure is balanced and will allow for plenty of growth options.
A good balance sheet allows a company to grow while still maintaining a minimal cash reserve. It allows for the distribution and management of excess funds. The balance sheet shows that the company uses a healthy amount of equity and debt funding. Debt is often a less expensive source of funding, as interest is tax-deductible and investors generally expect a higher return on investment than is possible with equity. However, there are risks to taking on debt. While debt is beneficial in times of growth, it can also be harmful during a downturn.
The best way to avoid investing in a company with a weak balance sheet is to focus on those with a high current ratio. A high current ratio is a sign that a company has a strong balance sheet. However, it shouldn’t be the only factor in investing in a mobile application company. It is merely a starting point to compare companies. It is important to evaluate the growth potential and profitability.
Prioritizing long-term growth
Prioritizing growth over acquisition is a way to achieve your goals when investing in a mobile application. Startups tend to prioritize acquisition over retention, which can lead the company to have a leaky bucket problem. Healthy mobile apps, on the other hand, generate revenue and retain users which allows them to scale. In contrast, unhealthy apps suffer from problems with engagement, monetization, and activation. Using the user flow framework to prioritize development can help you find this Aha! Take a moment and prioritize your product roadmap.
When it comes to funding mobile apps, investors have become more cautious. Instead of hedging their bets with smaller seed deals, investors are opting to invest in more established and successful companies. Moreover, more app companies are entering the market. So, they are concentrating their funds on the most promising ideas, rather than the ones that are yet to prove themselves. However, they still need to keep in mind the importance of long-term growth for their business model.
Governments are offering stimulus funds to assist businesses during economic downturns. In Israel, the Innovation Authority will administer NIS 650 million to support the tech industry. In addition, NIS 50 million has been allocated to innovation to combat the outbreak of COVID-19. The government of Denmark has established the Government and Business Corona Unit in order to address the challenges facing the business community as the containment measures become easier. The taskforce was also created by the Austrian Ministry of Economy and Digitalisation to monitor the effects of the outbreak.