An app idea is only worth something once people use it and pay for it. Here are the realistic ways apps and software make money, which suit which kind of product, and why selling "just the idea" almost never works.
Can you sell an app idea?
Almost never. Companies hear far more ideas than they can build, and an idea without a product, customers or evidence has very little value to them. The way to make money from an idea is to turn it into something people use, even a small version, and charge for it.
The main ways software makes money
- Monthly or yearly subscription. Customers pay regularly to keep using it. The most common model for business software, because it pays for ongoing improvements and gives you predictable income.
- Free to start, paid to unlock. A free version with limits, and a paid version for heavier users. Good for apps used by individuals, like freelancers, where people want to try before they buy.
- Per use. A fee each time, such as per report, per booking or per check. Works when value is clearly tied to each use.
- One-off price. Pay once, own it. Simple, but harder to fund ongoing work.
- Licensing to businesses. A firm pays for its whole team, often yearly. Fewer customers, bigger contracts, longer sales.
How to choose
Ask how your customers already pay for the problem today. If they pay staff hours every week, a monthly subscription that saves those hours is easy to justify. If the problem comes up a few times a year, per use may feel fairer. Ask the people you've spoken to which they'd prefer. They'll usually tell you.
An example
A made-up example. A software tool that writes up a building surveyor's report saves around three hours per survey. A surveyor doing six surveys a week saves eighteen hours. A subscription of £79 a month is an easy decision against that, and 200 surveyors paying it would bring in nearly £190,000 a year.
The maths is simple. The hard part is getting the first 20 surveyors to use it, which is where your knowledge of the industry and your contacts matter most.
Costs to plan for
- Building the first version, usually the biggest cost. See what it costs to build an app in the UK.
- Running costs: hosting, email and other services, usually small at first.
- Payment fees: card processors take a small percentage, and Apple and Google take a share of in-app sales.
- Improvements and support as customers ask for more.
Next step
Before deciding on a price, check people want it. Our guide to validating an app idea shows how to ask for small commitments first. When you're ready, start with a 2-week prototype you can show to potential customers.