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How to write a business plan for an online store?

In the age of digitalization where customer-friendly experience appears to be a cornerstone of every online store, it is of great importance to design a creative and meticulous ecommerce business plan. 

 

It’s said that 50% of new businesses close down within five years from the launch and therefore if you are thinking about opening up your own business, or you already have one, you’ll benefit greatly from writing a plan. 

 

An ecommerce business plan is usually presented in the form of a booklet with a detailed description of your business. It consists of elements such as: Executive Summary, Company structure, Products, Operations, Market Analysis, Marketing Strategy and Financial Plan. We will elaborate on each and every of these sections further on.

 

Having a written business plan will keep you on the right track and encourage you to meet your targets (e.g. sales targets) more effectively.

 

How to write a business plan?

 

So now that you know what a business plan is, let’s talk about the structure. It’s worth remembering that every plan is highly individual and depends on the owner’s vision and the objectives of their company.  The aim of the following article is to give you a hint or a general idea of what components of your company need a thorough consideration. But before we move on to the structure, let’s discuss the aim of writing it.

 

Why is it good to have a business plan?

 

There are many compelling reasons behind having an ecommerce business plan, one of which is to think critically about every major feature of your company: What do I want to achieve? How? What message would I like to send? How am I going to talk about my business? Those are the questions that need a deep thought before getting started. It allows you to identify any limitations and prevent possible problems. Moreover, it can be beneficial when you’re after outside funding. Setting clear goals and showing your potential makes your business credible and attractive to future investors. There are also other reasons that seem to reappear, among which we can distinguish: planning, idea evaluation, research, recruiting and partnership.

 

Planning. Writing down a description and the concept of your online store will give you a clue about how much time and money will you need, what is the scope of your company and what kind of resources will be needed from day one.

 

Idea evaluation. Writing a business plan will also help you decide whether your concept has a chance to achieve success. It’s also a great opportunity to distinguish the strengths and weaknesses of your idea.

 

Research. A good business plan needs solid research. Therefore, the information you will find, might be of great importance if it comes to your business, sales and marketing strategy.

 

Recruiting. Another reason to design a business plan is to communicate your mission and vision to other people by inviting them to your team. Also, it’s a perfect moment to think about what personalities and professions will be of great value to your business.

 

Partnership. It takes two to tango… or even more. Another reason behind making a business plan is to identify if and what kind of collaborations you are going to have especially when you are in the early stage of growth.

 

Important elements

 

While writing your business plan it’s crucial to include the following aspects:

 

Competition analysis

 

An overview of what’s happening on the market plays a crucial role while planning a business and therefore, it gives you substantial information about the strengths and weaknesses of your competition.

 

SWOT analysis

 

Making a deep analysis of your strengths, weaknesses, opportunities and threats will determine your competitive advantage on the market or illustrate aspects that need improvement. To make it clear and coherent we suggest you make such an analysis in a grid form with specific bullet points in each section. 

 

Store logistics

 

Every merchandise needs to be delivered to the customer and this is possible thanks to logistics. This is an aspect that plays a crucial role in customer acquisition since the more efficient logistic service, the happier the shopper. There are five logistic models among which we can distinguish:

 

  • Dropshipping;
  • Cross-docking
  • Own warehouse;
  • Fulfillment.

 

If you need more information about each logistic model, click here. Also, if you feel that fulfillment is the best option for your ecommerce business, leave us a contact below. 

 

Ecommerce business plan structure

 

Every business plan is individual and will cater different needs and objectives. However, there are several features that need to be included:

 

Executive summary

 

The word summary in this section isn’t without reason. This part is a company description that introduces and highlights key elements of your business. It serves as a booklet presenting your mission statement and describes your major objectives. The more objectives you enumerate, the better sense of direction you will get. Present your online store platform and describe briefly your products. Think about what makes your online store so special and how you are going to stand out from other companies. Remember that it’s a summary- keep your executive summary brief and consistent. 

 

Company description

 

It’s a good idea to start from the very basics of the plan. Writing down the list of people working for your company will give you a clue who is responsible for which task. Moreover, it will not only present their responsibilities but also illustrate their qualifications and skills. Also, think about the business model you represent- Are you a solo proprietorship, general/limited partnership, incorporated company/ LLC?

 

Market analysis

 

Before launching your product or service, it’s of great value to spend some time on the market analysis. Try to understand your ideal customer: Who and how old are they? What professions do they represent? What social media/ ecommerce platforms do they use? What will they buy? What kind of products or services might they be interested in? Also, don’t forget to research relevant industry trends and its trajectory. Will your products be in demand next year? Is your target market stable or rather changeable? Is your ecommerce platform efficient? All that information will give you a clue about the feasibility and viability of your business plan.

 

Products

 

This seems to be the very cornerstone of your online store. This is where it all began, right? Think about the product/service you are selling. Focus on their specifications and benefits. To help you sort all those aspects out, I strongly recommend following the questions below: What are your main products? What makes them unique? How do you acquire them? What kind of materials are used to produce your product? How much will they cost? Are your products seasonal? Will they last? How long?

 

Marketing strategy

 

Next step in the process of designing an ecommerce business plan is to think about the means you are going to use in the process of customer acquisition. How will you acquire, convert and retain customers? Consider the following: SEO (Search Engine Optimization), PR, Content Strategy, Search Engine, Social Media (e.g. Linkedin, Facebook, Instagram), Email marketing, Promotions. In addition to that you might consider Customer Loyalty as well. How are you going to reward returning customers? According to statistics, 58% of customers that belong to a brand’s loyalty program make purchases from that brand at least once per month. As you can see, having an effective marketing strategy will keep your ecommerce business sustainable.

 

Operations

 

Let’s talk about logistics as this is the essential part of every ecommerce business. Behind every successful delivery and customer-friendly service, there is a meticulous and efficient process. Therefore, it’s a good idea to give this aspect a longer thought. Think about things such as, the website of your online store, the shipping process, payment processing, the staff and management team, suppliers, couriers and 3PL services. A smooth workflow has an immense impact on the final outcome and the future success of your company. 

 

Financial plan

 

Talking about money is never an easy task; However, in terms of your business plan it is one of the most important aspects to ponder on. Without money, your business wouldn’t happen in the first place and that’s why it needs your attention. By planning your finances, you won’t be taken aback by unexpected expenses and if it comes to outside funding, you  will stand out as a transparent and scalable company. The complexity of this part of your business plan depends on the goals, audience, and the size of the business. Typically, there are three major factors to consider: an income statement, a balance sheet and a cash flow statement. Nevertheless, feel free to include as much information as you need.

 

Summary

 

To sum up, writing a business plan gives you an opportunity to look critically at every aspect of your online store and introduce your mission statement. Make sure it’s not just a daunting task and treat it as an in-depth analysis of your idea for the business. You might find it beneficial to highlight the key points you’ve discovered while writing your plan. Perhaps you’ll find something that needs an adjustment. Focus on features such as: Basic concepts, Business mission and objectives, Product description, Planning strategy, Target market, Operations (e.g. the platform, shipping process, payment processing etc.), The ask, The team, Current/Projected Financial state. Remember that success doesn’t happen overnight- it needs some time but with a solid plan, it will make it.

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