With another decade coming and going, it’s a popular time for people to reassess their lives and think about starting their own business. The eCommerce industry is predicted to grow by more than 10% over the next year, making online retail an attractive opportunity for any budding entrepreneur. But, to be successful, you need a strategy, and that requires writing an eCommerce business plan.
What is an eCommerce business plan?
A business plan is a document setting out the fundamentals of your business, including the products you sell, how you’ll make money, how you’ll operate, and other essential elements for successful growth.
Of course, many eCommerce entrepreneurs jump the gun and begin selling with only a loose idea and the intention to figure out the details later. However, taking the time to write a solid business plan can be hugely beneficial to you and your business.
Not only does a plan help you understand the pre-requisites of starting your eCommerce business (such as time, money, and resources), it also informs your other strategies. For example, it helps you identify customer personas for marketing, outline partnership opportunities for growth, and detail key staff for recruitment. It can also be used later down the line when seeking investment or mergers.
How to write an eCommerce business plan
If you’ve never written a business plan before, writing your first can feel a little daunting. To help, we’ve gathered the top tips from eCommerce experts across the globe on the best practices for writing an eCommerce business plan.
1. Start with a goal
Business plans can be written for a variety of reasons. Therefore it’s necessary to know why you’re writing a business plan and who it’s for. For example, a business plan that’s guiding the creation of your business will be significantly different from one that’s seeking outside investment. Outline the purpose of your plan and the content necessary to deliver that purpose.
2. Do your research
Solid research is a fundamental step when writing an eCommerce business plan. While your vision and understanding of the current market will form the basis of your document, independent research helps you to formulate a plan and follow-on strategies that increase your chance of success. This includes research about your intended market and products, as well as research into the most time and cost-effective software and fulfillment methods.
3. Keep it relevant
When recording something you’re excited about, it’s easy to get carried away and include unncessary or irrelevant information. To keep your business plan on track, start with a one-page business model canvas, like this one. Once you’ve completed your one-pager, use this information to write a structured business plan, adopting the outline we’ve included below.
4. Be concise
Finding the right length and detail of your business plan can be a balancing act. Your plan is essentially a guideline to running your business; not a manual. Accordingly, you want a document that you can quickly refer to. Ideally, your business plan should be around 20 pages long, not 100.
5. Keep it dynamic
A business plan should grow and change alongside your business and the industry. Therefore, it’s necessary to revisit your business plan often and make adjustments when necessary. We recommend scheduling a yearly business plan review and supplementing this with ad-hoc updates as required.
6. Be professional
While you might be the only intended reader of your business plan, it’s good practice to keep it professional and understandable at all times. You never know when someone might ask to see a copy of your plan, and by using succinct language, clear headings, and a professional tone, you can quickly share your plan with anyone.
7. Don’t sweat it
Your business plan doesn’t need to win awards. If you’re just starting out, it’s completely understandable that your business plan will require finessing while you grow and learn as an entrepreneur. It’s far better to have an understandable business plan that works for you, rather than an award-winning plan that you don’t quite understand.
Your eCommerce business plan outline
As promised, here’s your basic eCommerce business plan outline, along with content tips, for you to print and inform your first business plan.
The executive summary appears at the beginning of your plan but is actually written last. This section should provide a snapshot of the key points you’re covering throughout the document and finish with what you’re asking for. This should be one page at most.
The company overview section should explain what your business is and what it intends to do. This includes information on business structure, the industry, long- and short-term objectives, and your vision, mission, and values.
The market analysis section is where you estimate the market for your product, conduct a competitive analysis of the industry, outline your target customer, and provide any other related industry information. You might find it useful to include a SWOT (strengths, weaknesses, opportunities, and threats) analysis of your business here.
While you will have referenced your products through the other section, it’s useful to include a dedicated product section in your plan. This should consist of details either about your individual products or product categories.
A marketing plan details how you are going to target and convert your intended audience. Typically, this will include information on your price strategy, unique selling proposition, marketing methods, and sales avenues. This section is particularly important if you are going to be multi-channel marketing and selling.
Logistics and operations plan
Your logistics and operations plan should detail how you are going to operate your business. This includes everything from product sourcing and warehouse sourcing through to inventory software and fulfillment partners. You might find it useful to include cost calculations in this section, for example, comparing the cost of outsourced vs. in-house fulfillment.
Finally, you’ll need to detail how you are going to fund your business and make money. This section should include an income statement of your revenue sources, a balance sheet of your assets and liabilities, and a cash flow statement of revenue and expenses. If you’re not yet operational, then you’ll need to include projected financial information and calculations.
Creating an eCommerce business plan is an exciting step in your eCommerce journey. Hopefully, these best practice tips and tactics will help you to create a solid plan that delivers success, growth, and sales.