Should You Build a Custom App if You Have a Small or Midsize Business?

10 Min Read • Aug 25, 2020

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Erika Kramarik

Full-Stack Marketer

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We’ve been living long enough with coronavirus headlines to process the shock, the changes to our lifestyles and our shared social responsibility. We’ve already written about the impact of social distancing on our tech habits, but at this point it’s alright to say that yes, this is our new normal.

New behaviours we’ve adopted on how we live, work, shop and keep ourselves entertained are here to stay, while changes on how we and our kids learn and ultimately how we take care of each other are also seeing tremendous adjustments.

If you need just a quick refresher on these changes, take a look at this graphic. 


How are current changes affecting businesses?

If our behaviours have changed, businesses have scrambled to keep up with us. Unfortunately, small and midsize businesses were hit the worst, but larger companies are facing adversity, as well. The truth of the matter is that companies that have managed to quickly adopt or accelerate digital practices to strengthen their online presence have seen better revenue in the last months. 

One example that stands out is retail vs e-commerce. If UK e-commerce has skyrocketed in the last 6 months, physical retail sales have dropped in the same fashion.

So, it’s no wonder that if you’re running a business, you’re questioning if having a custom mobile app for your product or services would be a good strategic decision. With an intelligently crafted mobile app, you’ll quickly gain a competitive advantage, build trust with your audience, and have a space with a sense of community where consumers can easily identify with your brand. 

We dedicated an entire piece on why brands need a mobile app in the first place, and now we’re shifting our focus to how small and midsize businesses can benefit from the mobile app development process. Many startups or small companies might not be convinced that investing in developing a mobile app is a good business move, so we’re going to help you decide if it’s a route you should take. 

Why going online is so important

When brands first started creating an online presence in addition to their physical stores, they did it to make themselves discoverable and build the first versions of online shops. No one in the early 2000s imagined an e-commerce explosion and cross-platform shopping we’re seeing today. 

Fast-forward 20 years, and brands like Amazon, Shopify, and Magento contributed to the rapid expansion of the e-commerce business, which led to the average person being able to buy almost anything online. Consumers can shop from their laptop, tablet or smartphone, and have the option to use the usual UI or opt for a voice interface like Amazon Echo.

Moreover, many small retail firms, such as eyewear company Warby Parker or clothing brand Bonobos, launched directly online and only opened physical stores years later. Some businesses are comfortable staying online, and don’t even consider opening a shop ‘offline.’

Online advertising tools like Google or Facebook Ads enable brands to easily track their spending and results. When you add a mobile app into the mix, you add opportunities for user engagement and retention, and gain a new ecosystem to monitor consumer behaviour. In just a short time, you’ll have valuable analytics to draw insights from to make strategic marketing and business decisions.

Before the pandemic, when things were going well for small and midsize operations, we had a mix of half brick-and-mortar and half-online businesses that were doing great. Having a positive cash flow and decent profits, management was happy because things were efficient and there was little desire to change. The lockdown and social distancing is what pushed people into adopting online behaviours, forcing businesses to adapt, as well. However, you can’t expect or guilt businesses to radically change their operations before the negative enforcers are stronger than the positives.

Still, some businesses were ready for the massive online shopping waves, some orchestrated a quick shift to the online realm, and some are yet to make the ‘big’ transition.

Should I branch out with a mobile app?

The expansion of physical retail has slowed considerably over the past five years, and it’s not expected to make a comeback any time soon. However, e-commerce has been booming for quite some time now, and its growth is expected to double through 2023, according to a report by Infinum

Having your products presented on a mobile app or a trusted marketplace can boost discovery and sales. 

Mobile apps offer a variety of valuable business, sales and marketing opportunities. The only catch is that they can be quite costly. If you set out to build an app, define what you want beforehand and make sure you have a clear vision and understanding of the process. What’s more, building a custom app is a long term commitment. 

Once an app is launched, you’ll still need to invest in user acquisition, invest in maintenance to keep the app working—no matter how devices or operating systems are upgraded—as well as work on any new features that may arise as people use your app and give feedback. In short, make sure you have goals in mind for your product and business both for the short- and long-term. 

Considering that a lot of money and time is involved in putting together an app, forethought is a must, and you might want to validate your product idea before getting started on development. 

Another key aspect is weighing in the fact that building a stand-alone app is not a one-size-fits-all approach. If you’re in the retail industry, you can consider an alternative such as an e-commerce marketplace.

So, how do you determine which approach suits you and your business better?

Build a custom mobile app or head to a marketplace?

Depending on your business and services, you can go one way or another—or both ways. Let’s say you’re in the retail industry and you run a small neighborhood bookstore, and business hasn’t been booming lately. For this type of business, or any other retail business, you can invest in your own app if you have the necessary budget, or choose a marketplace like Google Shop, Shopify or Amazon. Even if you opt for an online marketplace, you can invest in an app later if this strategy aligns with your future business plans.

Both the mobile app and marketplace strategy apply almost universally to any brick-and-mortar business, from independent clothing brands to bookstores, eyewear, local grocery stores, and more. Small-scale production and personalized businesses can also build an app for their business, but they can also list their products on trusted marketplaces. 

If you’re not in the retail industry, a customized app might work better for your business. An app that lets you make appointments and reservations is the way to go for hair and nail salon business owners, barbers shops and stylists. Nowadays, small restaurants also have an app of their own for orders and reservations, thus adding to this sense of community. 

Building a community around your mobile product is one of the most important aspects to keep in mind. Whether you need an app for an online sneaker store, you sell premium coffee, or have any crazy idea that might just boom with an app, building a community within the app and interacting with users is a win-win on both sides.

Building your own custom app

If time and budget aren’t an issue, and your business outlook looks way more promising by having a custom mobile app, it’s time to look at the pros and the cons of actually having one. Deciding whether you need your own mobile app as an SMB is not cut and dry, because you probably don’t have a huge budget that you can invest – and possibly lose. 

Pros of having a mobile app

  • Complete ownership over the app’s design and user experience
  • Diversifies your business and gives you a competitive edge
  • Opens a whole new door to a brand-new audience
  • Increases brand visibility
  • Better communication channels
  • Higher engagement
  • Loyalty programs
  • More sales, increased profit and business growth
  • Collect customer data for further analysis

Cons of having a mobile app

  • Willing to spend money on an app without a 100% guarantee it will be successful
  • Developing a mobile app is both costly and timely
  • Mobile apps require ongoing care and maintenance for optimal performance
  • Developing separate versions of the app for iOS and Android
  • Needing a constant growth and support team to acquire users and retain them

At a first glance, the pros seem to outweigh the cons. However, the size of your budget can make or break your decision to build your own mobile app. Still, you don’t have to give up on the idea of having a mobile app for your business. If you’ve validated your idea and you’re sure it has a chance to stand out from the competition, you can try to get funding to get the mobile development process going and get your app off the ground.

Setting up shop on a online marketplace

Choosing an online marketplace such as Amazon, Magento or Shopify is a lot more affordable than building an app. If you have a tight budget, it might just be the perfect place for your business. It doesn’t have to be a permanent solution, and you can still develop your own mobile app later. You might want to test the waters first and see if there’s high demand for your product or service by joining an online marketplace, and then figure out whether your brand deserves its own app.

Pros of a marketplace platform

  • Right of the bat, lower setup costs
  • Tailored customer support
  • A chance for users browsing the platform to discover your business
  • No need to design or maintain your own online store
  • Easier to pull the plug and close up shop if this approach isn’t working for you

Cons of a marketplace platform

  • Transaction fees
  • Lack of customization and personalization
  • Elevated competition—you’ll be sharing the space with thousands of businesses
  • It may be difficult to establish a strong brand image, as customers associate purchases with the marketplace, not the brand

If you’re considering getting on a marketplace, make sure you conduct a thorough research before committing to one.

If you’re an independent seller you can try Shopify, or Etsy if you’re selling and producing handmade art. If you own a small restaurant and want food delivery services you can hop on UberEats, and if you’re selling large quantities of products you can check out Amazon. Check out more examples below and see some of the competitors you’ll be going up against. 

Industry typePlatform names
On-demand food deliveryDeliveroo; UBEReats; Postmates; Grubhub; Takeaway; DoorDash
Independent e-commerceShopify; Etsy; Amazon
Restaurant servicesOpen Table; Ontapp
Apparel & ClothingDepop; Vinted; eBay; Poshmark
SneakersGOAT; StockX; Stadium Goods
Personal care & trainingKubo; Yondo


Reviewing everything, you might already have an idea of which direction will suit your business better. If you have the budget, are willing to dedicate a lot of time and research, want to connect with your audience, and want to offer a customised experience, then a mobile app is the answer. 

If you’re having doubts and want to test the ‘online’ waters first, you should hop on an online marketplace. This might be a more convenient solution if your budget and schedule are tight and you’re looking for a low-maintenance alternative. You can still choose to build your own mobile app later on. 

Erika Kramarik

Erika Kramarik

Full-Stack Marketer

Erika is a full-stack marketer passionate about the intersection between technology and social impact. She mixes research with content design and a human touch to help people and startups succeed in delivering value through their work. When not writing or talking to people, you’ll find her reading or quoting Hamilton for any life situation.