Do you want to boost the chances of success for your ecommerce business? Having a detailed ecommerce business plan outlines where you expect your business to get and how you can achieve that.
We’ve been in the ecommerce business for 10+ years, and we’ve seen dozens of ecommerce websites appear and disappear. One of the biggest mistakes merchants make is neglecting to write a business plan before they get started.
A business plan for ecommerce business can help you clarify your tactics, identify business opportunities, figure out potential obstacles, assess what resources you’ll need, and evaluate the viability of your growth plans before you move to a new step.
So, how to develop an ecommerce business plan? In this post, we’ll discuss the various components that constitute an effective business plan.
To get funding for your business venture, investors require you to send a detailed plan, so they can evaluate if your ecommerce business can make profits year after year and mitigate any upcoming risks. There are also a few other benefits of having a business plan, even if you don’t require funding:
Writing a business plan for your company can help you reduce unnecessary expenditures and stay concentrated on your long-term goals. Look at these components you should add to your ecommerce business plan.
The first part of your plan is the executive summary. In this section, you should set out briefly your whole business plan to encourage potential investors to give their funding support.
Although this is the first part of your business plan, it’s better it write it after you’ve finalized the rest of your business plan. It’s actually much simpler as you can take the best parts from the sections you’ve already written and include them in the executive summary.
In the executive summary, you need to mention:
The executive summary is aimed to give a high-level overview of your business. It has to be clear, well-organized, short, relevant, and shouldn’t exceed one page.
The company description shares all the essential details about your ecommerce company. Typically, this is what you should include in company description:
Keep your information brief and sequential to minimize confusion and lend credibility to your business.
Products and services part will feature in almost all sections of your business plan, however, it’s crucial to provide a separate section that provides more detailed information on each product. This part aims to give readers a clearer idea of the product or service you provide, its features, characteristics, prices, etc.
Feel free to make this section as detailed as you want, but, there are some key elements you should include:
Once you specify which business revenue models you will apply, you will need to explain why it works for your ecommerce company. You could also add details about overhead costs, exclusive deals with suppliers, how you get the high-demand products, personalized customer service, and more.
Market analysis is aimed to obtain an in-depth knowledge of the market you’re operating in, get a clear picture of the size of the market for your goods, analyze your business’s position, target customer demographics, and the existing competition.
Opt for the market with a large number of customers, that need your goods. If you select the wrong market, or the relevant market at bad timing, you may face problems to drive sales. It’s crucial to show your potential investors that the market is large enough to get profit within the specific framework.
To complete the market analysis of your business plan you should:
There are also two analytic tools we recommend you to use in this section to learn further about the market:
By using these PESTEL and SWOT tools, you will be able to make a systematic and thorough evaluation of your business.
A marketing plan allows you to plan and monitor your marketing tactics aimed at your target audience over a given time span, for instance:
Define the KPI (key performance indicator) you’ll apply to evaluate the progress of each marketing strategy and try three or four at once to find out the most effective ones that give you the best ROI (return on investment).
For example, let’s say you want to use Instagram as one of your marketing strategies. You can invest in ads on Instagram, post pictures of your products, create interesting content, and more. Your KPI could be Instagram subscriptions, likes, and comments.
Most marketing plans include information on four key topics:
The operational plan for ecommerce relates to everyday business operations and should answer the question of how you are going to create and distribute your products or services, so everything goes smoothly.
In this section, you should dwell upon the administrative side of your business processes, including:
Certainly, you can always return to this section and add or delete some information. As soon as you have your supply chain and production process defined, you’re ready to proceed with your business finances.
Everyone’s favorite topic. Money matter. In this section, you write a report of your financial transactions and calculate all the expenses. You need to project how your ecommerce company will operate and evaluate the overall financial health of your business.
The following aspects should be taken into account:
You’ll need a financial plan for an ecommerce business to show that the revenue you’re foreseeing will lead to an ROI. Having a financial plan section will also be beneficial if you are looking for fundings from private equity investors or angel investors. Moreover, if you want to take credit from the bank, they will also require a financial plan to be sure that you can repay the loan.
The appendix is the final section of your business plan where supplemental documents required for ecommerce business goes. When readers need to verify any information from the earlier sections, they can refer to the corresponding documents. Examples of supporting documents included in the appendix section are :
Strategic planning for your ecommerce company is a great way to form a complete business concept, verify your business idea, organize your strategies, and identify your business’s strengths and weaknesses.
A well-written business plan navigates you through each stage of developing your business and might come in handy when you are searching for investors who should understand your business objectives.