Make money from an app: how to build, launch and grow

Published Monday 30 March 2026

Table of contents

• Why build an app business
• How apps make money
• Can you still make money from an app?
• Costs of developing an app
• How to build an app
• How to market your app
• After launch: maintaining your app
• Managing your app business finances
• FAQs on making money from an app

Key takeaways

• Focus on building a minimal viable product with just one or two essential features to keep development costs low and validate your core solution before expanding functionality.
• Choose your monetisation strategy based on your target audience, with subscription models often outperforming freemium approaches by converting 5 times better at 10.7% versus 2.1%.
• Prioritise the discovery phase during development as it represents only 10-15% of your budget but determines your app's foundation, with changes becoming ten times more expensive in later stages.
• Start marketing before launch through beta testing and app store optimisation, then focus post-launch efforts on monitoring performance data to enhance popular features and remove unused ones.

Why build an app business

An app business lets you build once and sell repeatedly, keeping the cost of acquiring customers low while scaling revenue. Apps automate tasks people use daily, from managing projects to tracking finances, making them valuable tools worth paying for. Mobile devices now account for 61% of global web traffic.

The most successful app businesses focus on solving one problem exceptionally well. Once your app exists, adding each new customer costs almost nothing, which means higher margins as you grow.

How apps make money

App monetisation is how you generate revenue from your app. Choosing the right model depends on your audience, your product, and your goals.

Here are the most common ways apps generate income:

• subscription fees: charge users monthly or yearly for ongoing access to features
• one-time purchases: sell your app for a single upfront payment
• in-app purchases: offer premium features, content, or upgrades within a free app
• advertising: display ads to users and earn revenue based on impressions or clicks
• freemium model: provide basic features free while charging for advanced functionality
• transaction fees: take a percentage of purchases made through your platform

Many successful apps combine multiple revenue streams. For example, a project management app might offer a free tier with ads and a paid subscription. While freemium is a popular choice, research on subscription apps shows that apps with hard paywalls can convert 5x better than freemium models, achieving a 10.7% conversion rate versus freemium's 2.1%.

Can you still make money from an app?

Yes, you can still make money from an app, but the market has shifted. Most users expect powerful apps at low prices, which means you need volume to generate meaningful revenue.

B2B apps can charge hundreds per year because they solve complex business problems. Consumer apps typically charge far less, relying on large user bases to drive income.

The path to profitability comes down to simple maths: your revenue per user multiplied by total users must exceed your development and operating costs. Learn more about profit margins. Understanding those costs is your next step.

Costs of developing an app

App development costs vary widely based on complexity and platform. Here are typical price ranges to plan for:

• simple web app: around $60,000 for a focused, single-feature product, though other industry data shows the cost for simple apps can range from $5,000–$50,000
• feature-rich web app: approximately $120,000 for multiple functions
• mobile app (iOS and Android): over $200,000 when adding native mobile versions

Michael Yared, CEO of US app-development company Echobind, has built products for hospitals, commodity traders, and gamers. He notes these figures can feel daunting for first-time founders, especially once you factor in marketing costs.

However, a well-defined product targeting a clear market can deliver strong returns. If you or your partners have coding skills, you can reduce costs significantly by building the app yourself.

How to build an app

Building an app follows a structured process designed to minimise costs and maximise your chances of success. The key is starting with a minimal viable product (MVP), the simplest version of your app that solves the core problem.

Michael Yared recommends focusing on just one or two essential features: "You want to create the minimal viable product at the lowest possible cost. No one is going to overtake you by putting out a more feature-rich version of your MVP. I've never seen that happen."

Here are the five stages of app development:

1. Discovery: Define the essential features and design user flows that make them easy to access. This stage shapes everything that follows.
2. Wireframes: Sketch each page in basic black and white using blocks to show layout. Skip images and design details for now.
3. Prototypes: Convert wireframes into a clickable version. The app won't function yet, but you can navigate through the experience.
4. Designs: Transform wireframes into fully designed pages. Define how every menu, button, and screen will look and behave.
5. Development: Write the code that brings your designs to life. This is where your app becomes a working product.

Yared emphasises that discovery is the most important phase. Making changes here is cheap and fast, but changes become ten times harder and more costly with each successive step. This initial stage, which includes market research and project scoping, typically costs around 10–15% of the total budget, according to app development cost research.

"It's the most important part of building custom software," he says. "Otherwise you risk building a house with the wrong foundations."

How to market your app

App marketing is how you attract users and convert them into paying customers. Building a great product means nothing if no one knows it exists.

Start marketing before you launch:

• beta testing: distribute an early version to test audiences for feedback and early adopters
• app store optimisation: write clear descriptions that explain the problem you solve and include relevant keywords
• product website: create a dedicated site that showcases features and drives downloads

Your beta testers often become your first paying customers, so treat the testing phase as both product development and marketing.

After launch: maintaining your app

Post-launch maintenance determines whether your app succeeds long-term. Getting users is exciting, but keeping them is what drives profitability. Here's advice from Michael Yared on what to focus on:

See how the app is bearing up to real-life use. Certain areas may be getting more traffic than you'd anticipated, which can slow down performance. Deal with those things. Take note of which features are popular and make those experiences as good as you can. If a feature's going unused, decide if you'll drop it or promote it more so users know it's there.

Yared recommends treating early adopters as a stepping stone to growth. Monitor your app's performance and make adjustments based on real usage data.

Focus on these post-launch priorities:

• monitor performance: identify areas with unexpected traffic that may slow down the app
• enhance popular features: improve the experiences users engage with most
• evaluate unused features: decide whether to promote them or remove them entirely
• gather user feedback: use early adopter insights to guide your next updates

Managing your app business finances

Financial management becomes critical once your app starts generating revenue. Tracking income, expenses, and profitability helps you make smarter decisions about growth, pricing, and investment.

Key financial tasks for app businesses include:

• revenue tracking: monitor subscription income, one-time purchases, and in-app transactions
• expense management: track development costs, hosting fees, marketing spend, and contractor payments
• cash flow forecasting: plan for seasonal fluctuations and reinvestment needs
• tax preparation: organise records for income reporting and potential deductions

Cloud-based accounting software simplifies these tasks by automating data entry and providing real-time visibility into your finances. With the right tools, you can spend less time on bookkeeping and more time improving your app.

Ready to turn your app idea into reality? Manage your app business finances with confidence using Xero. Get one month free and focus on building your product while staying on top of the numbers.

FAQs on making money from an app

Here are answers to common questions about building a profitable app business.

How long does it take to build a profitable app?

Most apps take 3–6 months to develop, but profitability depends on your market, pricing, and user acquisition strategy. For example, a 2024 study found the median time for a gaming app to reach $1K monthly revenue is 32 days, while a business app takes 113 days. Plan for at least 12–18 months before expecting consistent revenue.

What's the best way to monetise a free app?

Freemium models and in-app advertising work well for free apps. Offer core features free while charging for premium functionality, or display non-intrusive ads to generate revenue from your user base.

Do I need coding skills to build an app?

No, but having technical knowledge helps. You can hire developers, use no-code platforms, or partner with someone who has coding expertise to bring your idea to life.

How much does it cost to maintain an app?

Ongoing costs typically run 15–20% of initial development costs annually. Research confirms that maintaining an app generally costs 15–20% of its original development cost, which can range from $10,000 for small apps to over $100,000 for enterprise platforms. This covers hosting, updates, bug fixes, and new feature development to keep users engaged.

How do I price my app competitively?

Research similar apps in your category and consider your target audience's willingness to pay. Start with competitive pricing and adjust based on user feedback and conversion data.