To help you with this chore, in this article, we share a business plan template that you can adapt to fit your needs. Whether you are creating it to share with investors or simply want to get more clarity for yourself, you will see the fruits of your labor.
A Step-by-step Guide to Writing an eCommerce Business Plan:
Who Should Write an eCommerce Business Plan?
The short (and honest) answer – anyone who wants to start an online business. Whether you are only starting out, searching for investors, or ready to grow your business further, you will need an eCommerce business plan at all of these stages. If you are only entering the market, a business plan will help you to set specific goals and craft a strategy to ensure that your venture is successful, while later down the line it will help you to convince investors or financial institutions to help you with funding so that you have the capital to expand.
What Should You Include in an eCommerce Business Plan?
With all these hopes and dreams for your new online business, where do you start? Here is an outline of the different sections that you can use to ensure that all the most important details are included.
1. Executive summary
While an executive summary is only a single page, it is one of the most important sections in your business plan. It’s here where the readers will get the main synopsis of your eCommerce business. While your executive summary should be the first section, there is nothing preventing you from writing this last. The following are the most important information that you should include in this section:
The concept behind the business Objectives and vision The unique selling proposition Target audience Marketing strategy Current and projected financial state The team behind the business
2. Description of the business
When you are writing the description of your eCommerce business, you should focus on explaining who your business is, what you hope to achieve, and what sets you apart from your competitors. The following are some more specifics that you can include in this section:
The structure of your eCommerce business Your niche Your business model A vision and mission statement The history of the business Key employees Business goals
3. An analysis of the market
There are three main factors that you should pay attention to when analyzing your market: the size, the position of your business, and the competition.
4. The size of the market
In short, when you are analyzing the size of the market, you are estimating how many people will be interested in the product or service that you are selling. To estimate the potential size of the market, start by considering your ideal type of customer. For example, if you are targeting mothers of newborn babies, gather data about how many mothers with newborn babies there are. Has this number more or less stayed the same? Perhaps the data projects that this group will grow by a third in the next five years? After you have gained a better understanding of the demographics, turn your attention to trends and predictions. For example, if you plan on selling baby clothing, you could look at overall trends in the niche. Is it anticipated that the need for newborn clothing will grow in the next couple of years? While your information about the size of the market will never be set in stone, you should be able to back it up by data. So, be sure to refer to academic research and reputable industry-related news sources for these statistics.
5. The position of your business
To be able to understand where your eCommerce business fits into the market, you need to get a comprehensive picture. So, start by taking a look at its own strengths and weaknesses. In addition, you also need to try and identify if there are possible changes in the industry that it will be able to leverage or factors that could hinder its chances to grow.
6. The competition
You might think that your offering is unique, but the truth is that there will always be competition. If your market has already been in existence for some time, part of the process is to identify a couple of businesses that you view as your main competitors. Then, be sure to explain what sets your products or services apart from their offering. If there is nothing really that differentiates your product, perhaps you can beat them on cost? If you have the ability to sell your products at a lower price, you can use this as an example of how your eCommerce business will be able to set itself apart from other online stores. If you struggle to identify competitors because very few (if any) offer what you are selling, do not forget about indirect competition. Are there any businesses that sell something that could be viewed as an alternative solution to what you are offering? These will be your indirect competitors and should also be kept in mind when analyzing your potential market.
7. Management
Unlike the other sections, this section is more straightforward. Here you will summarize who is in charge of running your business and what each team member’s responsibilities are. To help you communicate this information in a format that is easy to read, you can create an organizational chart. In addition to introducing your team, you should also include information about the legal structure. For example, will you function as a sole proprietorship, partnership, or a corporation?
8. Products and services
While you have referred to the products or services that you sell already, it deserves its own dedicated section. Here, you can add more general information about your product range and extra details about the individual items and how these are sourced. If you plan on expanding your product range down the line, you can also include information about the new types of products that you plan to sell.
9. Customer segmentation
An in-depth, intimate understanding of your target audience is crucial. It is this knowledge that will continuously guide your decision-making. To understand your target audience better, the following are some of the traits and details that you need to describe in your eCommerce business plan:
Age Neighborhood Average income Level of education Hobbies Values and beliefs
The more detailed answers you can provide, the better. At the end of the day, it should be completely clear who your ideal customer is.
10. Marketing
Armed with this insight into who you are targeting your products or services at, you can set out to outline your marketing plans. Which strategies do you currently use? Are there any new methods that you plan to introduce in the near future? When writing your eCommerce business plan, be sure to include the basics like cost, which online platforms you will be selling your products on, which features and unique selling propositions you will focus on, and how you will promote your offering. The latter will get the most attention, but it is still important that you dedicate a few sentences to covering the other aspects as well.
11. Operations plan
From suppliers to shipping, there are several aspects that will impact your day-to-day workflow. This information will help you to create backup plans and guide you with other key decisions that will ultimately affect your budget. The following are some of the questions you need to answer in this section:
Where are your products produced? If you will be making them yourself, who will supply the raw materials? How long does it take to manufacture your products? Do you have any measures for dealing with high season or a sudden increase in demand? How many products will you have readily available? Where will you store your products or raw materials? Which shipping couriers will you use? How will you manage your inventory?
12. Financials
At the very least, you should include a balance sheet, an income statement, and a cash-flow statement. Ideally, you can also include financial forecasts.
How Long Should My Business Plan Be?
Business plans can be anything from 15 pages to 50 pages. For example, the US Small Business Administration suggests that it can be as long as 50 pages if you need to apply for a loan or funding from an investor. Whether you write 20 pages or double that, an effective business plan is concise. It should be helpful to those reading it, and achievable for those who need to write it. At the end of the day, there is no right or wrong answer regarding its length as much of it will depend on your reason for writing one. If it is to secure funding, it will have to cover more details in depth, while if it is merely to act as a guide for yourself, it will likely be much shorter.
Wrapping Things Up
Even if you are not looking to secure funding for your eCommerce business, it is still important that you write a business plan. Not only will it help you to assess the feasibility of your business idea before you jump in head first, but it can also help you to identify potential hurdles allowing you to be better prepared. Writing an eCommerce business plan might not be the most exciting, but it is still important. You can think of it as a stepping stone helping you to get to the more interesting tasks like marketing. When writing your business plan, it is best to keep it simple at first. You might have the biggest dreams for your venture, but when writing your business it is better to keep your ideas small initially. A big idea that involves too many risks is more likely to get turned down for funding or leave you discouraged after the first hurdle. After all, a business plan is a dynamic document. In other words, as your eCommerce business grows, so too should your business plan. The most important thing is to write one, even when your business is still in its infancy. Frequently Asked Questions What is an eCommerce business plan? An eCommerce business plan is a roadmap describing a business, its products or services, how it generates money, its leadership, its financials, its operations model, and many other details essential to its success. What are the benefits of writing a business plan? A good business plan can help you to clarify your strategy, identify potential roadblocks, decide what you will need in the way of resources, and evaluate the viability of your idea before you learn how to start a business. It can help you to understand the scope of your business, as well as the amount of time, money, and resources you will need to get started. What should I include in the table of contents of a business plan? Your standard table of contents for an eCommerce business plan can include the following: executive summary, company description, market analysis, management and organization, products and services, customer segmentation, marketing plan, operations plan, and financials. What does a business plan for an online store look like? For the most part, a business plan for your online store will look quite similar to the business plans you would see for a brick-and-mortar shop. There is no real, significant difference. Should I write a business plan even if I don’t need funding? Yes. You will need a business plan at all of the stages. If you are only entering the market, a business plan will help you to set specific goals and craft a strategy to ensure that your venture is successful.
