Whether you’re looking to create an online store or start up a different type of ecommerce business, writing up a solid online store business plan is one of the major jumping off points. This could feel like a daunting task, but with some preparation, it doesn’t need to be.
Read over our steps and tips to creating a strong online store business plan.
Who Needs an Online Store Business Plan?
If you’re looking to jump into ecommerce, you need a business plan. It will prove vital to your overall success by creating an overarching guide for your new venture.
Your business plan can serve multiple purposes. It can help you secure investors or business loans. You can use it as a tool for recruiting employees and partners. Also, you’ll be able to use it as a roadmap.
Creating Your Ecommerce Business Plan
As with so many things in the world, there aren’t really many hard and fast rules when it comes to crafting an ecommerce business plan. However, the most effective business plans tend to have the following components:
- Executive summary
- Company description
- Market analysis
- Marketing plan
- Logistics and operations
- Financial plan
We’ll go through each of the steps you’ll need to take to complete these components.
Step 1: Write an Executive Summary
Your executive summary is the first thing that will be presented in your online store business plan. As the name implies, it acts as a summary for the entirety of your business plan, with high-level information laid out for readers to easily peruse.
The importance of a concise and informative executive summary cannot be understated. It’s likely any potential investors or lenders with busy schedules are going to read the executive summary before taking any time to read the more detailed parts of your business plan. You don’t want to lose them here.
Make sure your executive summary is easy to read and includes pertinent information you want to communicate. You want to give the audience an idea of who/what your company is, without trying to sell yourself too hard. The rest of your business plan will do the selling, as your executive summary should entice them to read the business plan.
Try to write no more than two pages for your executive summary, but you really should be aiming for just one page. At the end of the summary, the reader should know who you are, the problem you have identified, and your approach to solving that problem.
Beyond high-level points in the summary, you can get a bit more granular in pointing out things such as current partnerships, customers, product development, monetization strategies, and other details that will help the reader get a better idea of who you are, and what to expect when reading your full business plan.
You might want to save writing the executive summary until after you have completed the rest of your business plan, or you could write it first to help give you a guide to the bulk of the plan.
Step 2: Complete Your Company Description
Where your online store business plan executive summary should give readers and potential investors a high-level sense of your business, creating a company description is where you need to get extremely specific.
Include all identifying elements of your company, including:
- Brand name
- Business structure, such as:
- Sole proprietorship
- Website domain name
Now, start getting more detailed in describing who and what your company is on a grander scale. This is where your business plan should include your company’s mission statement and vision.
Your mission statement should be short and sweet. You’re essentially wrapping up your entire company in one sentence. Tell the reader and the world why your company exists as quickly as possible.
If you’re having trouble coming up with your mission statement, start with something extremely grand and general. Then try to insert your company into that grand statement.
What grand thing or problem are you attempting to solve are you doing, and for whom are you doing it? If your company sells food from organic and sustainable farms to schools maybe your mission statement is something like, “Keeping the world green and our kids’ diets clean.”
Where your mission statement tells the world who you are now, your vision statement shows where you want to be in the future. Think about the overarching goal you want to reach through your mission. “Our vision is to ensure the health of the people and planet. Through this, we will get nutritional and tasty meals to kids across the country, sourced from our curated and highly-vetted sustainable farmers and producers.”
After sharing your mission and vision statements, give the reader some more background into where you are coming from. How did you find the problem and what made you think about the solution? What experience do you have?
Then, introduce yourself formerly. List the key players involved from ownership down to staff. Though if you are already substantially big, you probably don’t need to list absolutely everybody. Be proud of who your team is and show why their contributions matter.
Step 3: Document Your Market Analysis
As with any good business, conducting market analysis plays a big role in getting off to a good start. Including your analysis in your business plan not only shows anybody reading it what is happening in the market, it also shows the that you fully understand the market yourself.
Break up your market analysis into three distinct categories:
- Audience analysis: Identify the demographics you are selling your products and services to. Use key identifying factors such as age, gender, location, and income. Show your understanding of what is important to your audience.
- Industry analysis: What is the current state of the industry? How did it get there, and where is it heading? Are there ecommerce trends that could impact your business? Back your conclusions with data where possible.
- Competitive analysis: Know and understand your competition. What are the products/services they offer? What is there pricing structure? What is their current standing with the public? Identify their strengths and weaknesses. Find learnings from your competitors’ successes and failures. Identify any gaps that you can fill. Show how you can reach higher profits, how your product is better than theirs, and you might target an untapped audience.
You can even go the extra mile and analyze yourself. Conduct a SWOT analysis to name your strengths, weaknesses, opportunities, and threats. This will give you huge insight into how you are already set up for success, and things that could use extra attention and work.
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Step 4: Describe Your Products & Services
Here is your chance to dive deep into your products and services with your online store business plan. Use this space to detail how your products differ from competitor products. Point out how your products helps address any problems.
Keep in mind that this probably isn’t the place to get very technical. Avoid jargon here and make things simple and easily digestible for a wide and varying audience. You also don’t have to go into every single product or service if you have a large selection. Concentrate more on categories of products rather that each single individual item.
Step 5: Put Together Your Marketing Plan
You’re sure to go far with a good plan to market your ecommerce business. Outline your marketing plan here as part of your greater website business plan.
Start by pointing out who your audience is, where you’re most likely to find them, and how best to grab their attention. Then consider how much you want to invest in marketing strategies.
Working in ecommerce gives you several tried and true online methods of marketing.
- You can help your audience find you organically by building a digital content strategy where you create and produce related content, like articles and videos.
- You can learn and establish best practices for search engine optimization (SEO) for ecommerce so that your website will rank higher in web search platforms like Google.
- You can take advantage of Google’s popular pay per click (PPC) program to get your site listed in front of a target audience.
- It’s also a good idea to build a strong social media presence where more people will be able to find you. Social platforms also offer a breadth of paid advertising tools if you want to go that route.
- With affiliate marketing, you can have external editorial websites leverage their built-in audience to highlight your product to get a cut of sales that come through their funnel.
- Many influencers will work with companies to promote products. Target influencers in your niche rather than looking for just the people with the most followers.
It’s important to note that organic marketing (or unpaid) doesn’t exactly mean free. It takes labor and quite often a good chunk of money to build out and implement a good organic marketing strategy.
Step 6: Detail Out Your Logistics and Operations
Here is where you’ll point out all the things you need to keep your business running day to day. If you are selling physical products, you’ll need to consider things like:
Many small ecommerce companies rely on third parties to handle the bulk of their logistics. If you are doing so, be sure to highlight that here.
If you are selling a service, your logistics and operations will look a bit different. You’ll be more concerned about things like transportation, computer hardware and software, office upkeep, and more. Of course, that doesn’t mean that companies selling products aren’t also concerned with these operational items.
By completing this section, you should get a strong grasp of what your business needs to run well, and you’ll be able to give potential investors an idea of the costs required to operate well.
Step 8: Lay Out Your Financial Plan
There’s a ton that goes into ecommerce business planning, and one aspect does seem to loom large: financials.
While you may have touched on your finances in other parts of your business plan, here’s where you need to be much more granular and detailed. Just how into the weeds you get will depends on what you deem crucial for others to know. Investors and lenders, for example, are probably going to pay more attention to your financial plan than anyone else.
You’ll want to include these main pillars of a well thought out financial plan:
- Income statement: This will give your reader a look into your bottom line by showing your total revenue against your expenses over time. Of course, if you have yet to launch your business, you can project these numbers.
- Balance sheet: Used to calculate shareholder equity, your balance sheet reflects your total assets (everything your business owns) minus liabilities (all your reoccurring costs).
- Cash-flow statement: True to its name, this shows how your cash flows in and out. You’ll detail out when your revenue comes in and how much. You’ll also explain when you must pay out all your expenses and how much too.
Wrapping Up Your Online Store Business Plan
Coming up with an entire business plan for online businesses is no small feat. If you need a little more help, check out the many ecommerce business plan templates available online. Once you’ve tied all loose ends, don’t forget to at least give yourself a small pat on the back. As you wrap things up, keep in mind that your business plan can absolutely be a living document. It’s even a good idea to tailor it according to whomever is reading it.
For example, if you know an investor who gets excited by big ideas, you might want to put more thought into products and services. If you’re presenting it to somebody highly experienced in the industry, you might want to throw in a few more ecommerce terms than you normally would. If you have a number cruncher, you probably want to fine-tune your financial plan. If you’re just using it as a roadmap for your organization, you might be content to keep things high level.
Whatever the case, remember that you have the power to make your business plan perfect for your needs. If you need more help with your new company, take a look at some of the top ecommerce KPIs to build your business and grow revenue.
Have a business plan? Ready to get going? Check out Nexcess Managed WooCommerce plans.