As the saying goes, “A goal without a plan is just a wish.” So, if you wish to build your own eCommerce empire, having an eCommerce business plan is crucial to your success.
Why Should You Continue Reading This Article?
But maybe you have no idea where to start. Of course, you don’t want to leave out something important. In this article, we’ll show you how to build an eCommerce business plan and discuss how to write it in a well-crafted, simple way from scratch, for your eCommerce small business and what are the key elements that should be included in it.
Let’s get started!
Why You Need an eCommerce Business Plan
Abraham Lincoln once said, “Give me six hours to chop down a tree, and I will spend the first four sharpening the axe” So, planning is almost everything you should start with.
Although it can be hard work to put together a comprehensive eCommerce business plan, it’s such an important step for the below-mentioned four reasons:
- Establishing a Clear Roadmap: Well-written strategic planning will help you set clear goals and set an action plan to reach them. It will also help you to set priorities and realistically estimate the time and effort needed to achieve them.
- Being Ready for Any Sudden Changes: Change in the eCommerce business world is happening quicker than ever before. And this increases the value of planning. Having a data-driven business plan gave managers a dashboard to work with navigated sudden change.
- Securing Funding: If you are looking for a loan or an equity investment for your startup, getting a business plan document right is essential because an organization that will provide the money wants to make sure that you know what you are doing and have a clear path to profit.
- Avoiding Costly Mistakes: If you are considering setting up a small business with limited resources, having a startup business plan helps you know exactly what resources are needed to avoid wasting resources down the drain and to make the most of them.
Before You Start Planning: 3 Key Questions to Answer
To build a well-written online business plan sample, you need to answer the following questions:
- What Are You Selling? Are you selling physical products (i.e apparel, home appliances, etc.), digital products (i.e online courses, ebooks, software, etc.), or services (i.e marketing services, consulting, car repair, etc.)?
- For Whom? Do you sell to individuals (B2C) or organizations, corporations, and non-profits (B2B) or are you are a part of a marketplace acting as a broker just like affiliate marketing?.
- Who Are Your Suppliers? Do you manufacture your products in-house, or outsource a third-party manufacturer? Do you partner with a dropshipping manufacturer or do you depend on wholesale?
With great data comes a great business plan. Answering this line of questioning will give you an initial overview of what your business is and it’ll be like a starting point.
How to Structure a Business Plan for Your Online Store
Let’s agree from the start that the business plan will not be perfectly completed on the first try. It will continue to evolve as you create each of the planning stages and you’ll be making edits along the way.
For an eCommerce business plan example, there are six basic sections it should include, Let’s delve deeper…
Let’s delve deeper…
1. Executive Summary
Any e-Commerce business plan should start with an executive summary of just one sheet summarizing each section of your business plan. Although it is placed at the beginning, it should be the last section to be written.
The executive summary is the first thing your prospect investors would read, and it creates the first impression of your project. So, make it simple, easy to understand, and attractive.
The executive summary should include:
- Business ideas presentation
- Business model
- Products and services
- Target audience and target market
- Management team
- Success factors or the points that differentiate your company
- Financial strategy
2. Company Overview
This is the next section that includes detailed information about your business and identified the competitive advantage of your online store. It covers some features such as:
- Brand Name and Founder’s Name: Your online store name and who is behind it.
- Brand Traits: List just 3 to 5 words that describe the brand that you want your online store to be identified with.
- Domain Name: It’s the URL. It should be short, simple, memorable, and doesn’t include numbers.
- Company Type: How your business operates.
- Value Proposition: It’s a brief statement that shows how clear your idea is.
- Mission Statement: The reasons behind your business’ existence.
- Vision: The goals that you want to reach long term. They must be realistic and ambitious so they can be motivating.
3. Market Analysis
Conducting market research around your eCommerce small business idea is essential. It tells you whether or not people will buy what you’re selling.
Market analysis is broken down into 3 main sections:
A. Industry Analysis:
Industry analysis outlines the industry size facts and statistics bode well for your eCommerce business. It answers questions like:
- What does the market look like for your industry overall?
- Has it grown or changed over the years?
- Are there any expectations of growing up or slipping down in the future?
- Are there factors that could impact its growth?
Industry analysis is likely to be one of the toughest parts of your eCommerce business plan, but fortunately, research and white papers are abundant in almost all industries, besides free tools like Google Trends.
B. Market Segment:
The market segment or audience segmentation helps you to create your “Buyer Persona” which represents your target audiences’ various demographic sets (gender, age, geography, education, income level, ethnicity, etc.). The market segment includes both your target market and niche selection.
It’s important to provide an overview of your niche, whether there’s a micro-niche included, and why you chose it.
C. Competitive Analysis:
Competitive Analysis provides an overview of who is your market leaders are and direct, indirect, and potential competitors. It also identifies your competitors’ key strengths, weaknesses, opportunities, and threats, focusing particularly on where you can defeat the competition or add unique value to your business.
Creating a comprehensive competitive analysis includes 4 key phrases that are:
- Identify Your Competitors
- Select a Competitive Analysis Framework
- Collect Data on Your Competitors
- Write Your Competitive Analysis Report
4. Marketing Plan
By now, you’ve covered almost all your company-related aspects, your customers, and your competitors as well. It’s time to talk about how you’re going to reach your customers and drive traffic to your eCommerce website.
The marketing plan describes the planned promotion strategies, business growth strategies, pricing strategies, sales strategies, and how much can you afford to spend on your marketing efforts. To come up with a well-defined marketing strategy, you need to deeply know your customer inside out.
It’s important to keep in mind that every potential customer is different, and there are many organic and paid marketing techniques that you can use to reach each of them. From SEO, social media, content marketing, and email marketing to influencers, these proven techniques will surely acquire customers and drive traffic to your online store.
So, this stage is all about defining:
- Which marketing channels are best for you to reach your customer?
- How much can you afford to acquire customers to your online store?
5. Operations Plan
Operational planning reflects the task flow of your eCommerce store and how they’ll be divided. It includes your daily tasks as an online store owner. Some basic things should be established, such as your work schedule, your daily tasks timetable, your location, and your product stock.
Your tasks will include:
- Offering support
- Managing the stock
- Managing returns
- Negotiating with suppliers
- Dealing with unforeseen events
- Promoting your store
- And much more
List all of your daily tasks and how your routine will be to make sure that everything in your business plan will be under control. If you are a startup and you’re the only person in charge, it’d be hard to manage all tasks. So, it’s important to have initial planning on paper, and then make small modifications down the line to hire a staff and management team.
6. Financial Plan
For many people, this is the most difficult part of a business plan. However, it’s extremely important. It outlines the major costs for an eCommerce business that include the cost of goods, internet connection fees, salaries of the staff, etc.
If you’re seeking to get outside funding, your financial statement should contain the following documents:
- Summary of Funding Requirement: It’s an outline showing why you are applying for a loan, the cost for raw materials and operational machines, and how much money you need.
- Use of Funds Statement / Income Statement: It shows how profitable your business would be during a given period and describes how you plan to use the funds you’ll get.
- Business Budget: This displays cash inflow and outflow statements over a specific period of time.
- 3-Year Profit and Loss Projection: It’s assumptions that are stated clearly and in detail to communicate your vision of the company’s future and how you anticipate achieving that vision.
5 eCommerce Business Plans’ Mistakes to Avoid in 2022
As for eCommerce owners ( whether it was for fashion, services, etc.), there are some methodologies they use to approximately estimate future turnover, profitability, and more. But unfortunately, most of these estimations and expectations are frequently distant from market reality.
ExpandCart gathers the most common mistakes that usually happen when you put an eCommerce marketing plan into work, Let’s show you around!
Mistake #1 | Selecting the Improper eCommerce Platform
Whether you’re just getting started with your eCommerce shop or have been running one for a while, a not-suitable eCommerce platform can boost your eCommerce business plan or awfully put it to an end!Your eCommerce platform not only determines how you present your items and sell to clients but also influences how you attract people and grow your business over time. Click To Tweet
After you’ve created a sample business plan for an eCommerce startup, you’ll need to think about several things when selecting an eCommerce platform, including:
- Your financial situation
- Whether you prefer a template or bespoke design, we can help.
- What type of experience do your consumers want?
- What items do you intend to sell?
- How do you intend to grow your company?
- What tools your platform needs to integrate with?
- How much control do you desire over your website?
The last thing you want is to pick a platform that restricts your company’s development, doesn’t interact with your existing systems, or doesn’t provide the amount of control and flexibility you want.
An improper eCommerce platform can result in a variety of problems, including income loss, decreased conversions, less traffic, security difficulties, bad design, and more. This major error might force you to spend even more time, money, and effort modernizing your platform or moving to a new one entirely.
Take your time while deciding on the best eCommerce platform for your online eCommerce as this will affect the whole performance of your eCommerce business plan.
Mistake #2 |Skipping Environment Check
Before drafting an eCommerce business plan to launch or boost your e-commerce website, it’s a crucial step to start assessing the viability of your ideas before anything!
And here, we don’t mean broad market studies, but rather a comprehensive test using a limited version of your site, that will assist in ensuring in the field that you are gaining traction in your market. You must be able to tie your business strategy to the fact that you have already made your first sales even before you daft your eCommerce business plan.
Aside from the checking and validation component, an initial test will help you to get useful feedback from your consumers and discover for yourself the major roadblocks or places for progress in your business.
You’ll be in a better position to carry out your company plan and generate realistic and plausible financial projections once you’ve completed it.
Mistake #3 | No Clear Brand Message or Identity
A good product alone won’t perform as good branding!
Don’t fall into the trap of believing that your things will sell themselves. To build a successful business, you’ll need to develop a strong brand identity that is both approachable to your target audience and favorable to viral brand awareness. If you’ve done your research, you should have a good notion of what your target audience wants and how to communicate with them. Then it’s only a matter of maintaining a consistent and firm message.If your business stands for high quality, dependability, enjoyment, and affordability, these principles should be reflected in all of your content, branding, and marketing. Click To Tweet
A strong brand identity boosts client loyalty and your chances of gaining global brand recognition.
Mistake #4 | Shallow Website Content
If your eCommerce business relies on organic traffic to attract clients, then the material on your website should be crafted with the user and SEO in mind.
Many organizations make the mistake of considering content as an afterthought, failing to see that each piece of content represents a chance to increase traffic and convert clients.
You need to provide content that is relevant to your target audience, optimized for search engine traffic, and entices consumers to buy your items, from your homepage to your product descriptions.
Investing in SEO and CRO-friendly content is worthwhile, whether you engage with an SEO service or do it yourself. This entails using the correct high-quality keywords for your niche and crafting material that is designed to convert.
Mistake #5 | Mistargeted Audience
What else could you possibly require? You have items, a company strategy, and a website.
Unfortunately, having an offer and a venue to pitch it isn’t enough to be a true eCommerce success.
One of the most common blunders a business owner can make is failing to precisely define their target demographic and spend time learning what makes them tick.
You’ll need to do some serious market research to make sure that:
- Your target audience has a genuine necessity for your product.
- You know how to express your offer in a way that they will comprehend.
- You may create a marketing plan that prioritizes your target audience.
Identifying and specifying your target audience can help you develop an atmosphere that they will remember and a brand message that will tempt them to buy and re-buy, and hence, a successful eCommerce business plan!
We are living in a world of fast-paced digital transformation. Almost all businesses are thinking of building a strong online presence. Being prepared and having a well-crafted business plan for your dream eCommerce website helps you focus on what exactly you want your business to be in the future and provides a map of how to get there in no time.
Remember! Creating your own eCommerce business plan won’t be that easy, but success comes to those willing to put in the work and if you did it right, you will witness a great increase in sales and revenue. You can seek help from experts who can help you plan your business effectively.