How is buying an app development agency different from buying an app?

Both are sold as app companies, and a search for an app development company for sale may return either. The difference is who pays. An agency is paid by clients to build apps for them. A product business is paid by users, or by advertisers, for an app it owns. The risks, the people and the paperwork differ, so identify the type first.

What you are buying in an agency

You are buying client relationships, active contracts, a pipeline of work and a team. Ask how much work comes from repeat clients, how contracts end and whether any client can leave on a change of ownership. Ask who sells new projects. If it is the founder, the question is what happens to that work when they step back.

Developers and who owns the code

The developers are the business, so ask how long they have stayed, how they are paid and whether they would stay after a sale. Then ask who owns the code built for clients. The contract usually says, and the client may own it. Your lawyer can read the client and staff agreements to confirm.

What you are buying in a product app

A product app business comes with store and developer accounts, a user base, and subscription, in-app purchase or advertising revenue. Its risks sit in platform rules, user retention and dependence on a few accounts. The checks are in mobile app business due diligence. A developer-led company has its own list in buying a custom software development shop.

Which suits your plans

An agency suits a buyer who wants to manage people and sell projects. A product app suits one who wants to grow a single product. Some businesses do both, which makes the books harder to read. Ask the seller to separate client revenue from product revenue, and ask your accountant what each set of records shows.