So you’ve decided to launch an eCommerce startup?
Before you start building your business, there’s one thing that you absolutely need to have and that’s a comprehensive eCommerce business plan.
Navigating the world of eCommerce is challenging. That’s why you need a roadmap to guide you.
A business plan helps you know what you need to do and when you need to do it. It also summarizes all your costs so you can stay on top of your finances.
Are you ready to write your business plan? Here’s everything you need to know to get started.
What Is a Business Plan?
A business plan is a roadmap for your business. It describes your business in detail and outlines your future goals.
A business plan describes, step by step, how you plan to achieve certain milestones and grow your business.
A business plan doesn’t necessarily have to be a long, formal document. If you’ve ever jotted down notes on a piece of paper about something you wanted to accomplish in your business – that counts as a basic business plan.
If you’re seeking investors for your startup then writing up a formal business plan is essential.
However, business plans can also be written for internal use. If it’s not going to be shared outside your team, then you can draft a leaner plan that focuses only on important details.
What Makes eCommerce Business Plans Different?
Starting and growing an eCommerce business is challenging. A comprehensive business plan can help you achieve success.
When you’re feeling stuck and don’t know what to do next, your business plan should provide you with guidance on everything you need to do, when to do it and how much it will cost.
The main way that an eCommerce business plan differs from a traditional plan is that an eCommerce business relies on digital marketing to drive sales. There’s no free footfall traffic with an online store!
Depending on your business, you may need to do some research on possible restrictions on selling and sourcing your products. This is an important thing to include in your plan.
Importance of an eCommerce Business Plan
Every new eCommerce business should have a stable foundation – that’s why a comprehensive business plan is so important.
The worst thing in business is not knowing where you’re headed. A business plan is a fallback in case you ever feel lost.
The process of writing up an eCommerce business plan can also help you get your creative juices flowing. Once you put pen to paper, you’ll find yourself coming up with profitable ideas left, right, and center.
A big part of eCommerce business planning is building a detailed buyer persona. This helps you understand your target audience and the market that you’re going to be breaking into.
Creating Your eCommerce Business Plan
Now you know what an eCommerce business plan is and why it’s important. The next step is to start writing your plan. Many people think business planning is a long and tiresome process, but it’s actually rather simple.
Write up your plan by following these 5 simple steps.
1. Company Description
Before you write a more detailed description, start with an executive overview. This is a short, concise outline of your business’s goals and objectives.
Length-wise to should be one page maximum and include the following:
- Overview of your products
- Target audience
- Growth potential
- Funding needs
After completing your executive overview, starting writing a more detailed company description. This should include information about you and any other founders.
List each founder and what inspired them to start the business. Describe your background (including qualifications) and how you got into the industry. Finally, describe your business model and who you’re selling to.
Next, you should describe what your company is selling. Focus on your products’ specifications and benefits.
Start with your flagship product lines and explain why your products are better than your competitors. What differentiates your products? What gives you a competitive edge?
Describe how you plan to source each product and include information on suppliers. Next, provide an overview of how much each product will cost to acquire and how much you plan to sell them for.
You will write a more in-depth financial breakdown in a later step so don’t worry about being too detailed.
3. Industry Research
The most important part of running a successful eCommerce business is understanding the industry, including your target audience.
Market research for eCommerce is more involved than it is for regular stores. Why? because you’re potentially selling your products to the entire world! Narrow down your target customer to a specific demographic.
Think about what problems your customers have and how you plan to solve them. Do a competitor analysis and provide an overview of your main competitors and how you plan to outshine them.
4. Marketing Plan
A solid marketing strategy is the cornerstone of a good eCommerce business. Why? Because no traffic means no sales. You can attract customers to your store through a variety of different advertising tools.
Highlight some of the methods you plan to use including Facebook ads, Google PPC, influencer marketing, and SEO. You might also choose to use content marketing. You can learn more about content marketing by reading this helpful guide.
Explain how you plan to use each of these methods and how much money you’re going to allocate to each.
The final part of your business plan (and the least fun) is the financial plan. If you’re going to be pitching your business to investors, this section is crucial.
Your financial plan should detail all of your costs including basic business expenses such as office rental and web hosting fees.
Create a spreadsheet detailing your costs vs your revenue for each product. Determine long-term revenue by relying on your market/industry research to make future forecasts.
Work out how much you’ll need to sell to break even and then explain how you plan to scale your business up as you generate more leads.
Ready to Set Up Your Business Plan?
Having a comprehensive eCommerce business plan is essential for achieving success online. Think of your plan as a roadmap to follow as you grow your company.
Start off your plan with an overview of your company. Include information about yourself and what drove you to launch the business. Detail your products, conduct a market analysis, and write up a marketing plan.
Finally, tie it all together with a detailed financial plan complete with future revenue predictions.
If you found this post helpful, don’t forget to read more on the business section of our blog.