How to Write a Business Plan for Your E-commerce or Online Business
By the end of the year, global retail ecommerce sales are expected to reach $5.4 trillion, up from $4.28 trillion last year.
Many people don’t realize that the small business management tools necessary for traditional success as an entrepreneur are also useful in building an ecommerce or online business. One of these tools is a business plan, and if you want to get in on the growing ecommerce market, your business plan will act as your roadmap in launching and building a successful online venture.
In addition to outlining your business and its goals, a business plan is also useful for attracting investors to support your efforts. By focusing your entrepreneurial mindset on creating a comprehensive business plan, you’ll have a strong foundation for future sustainable success.
The Elements of an E-commerce Business Plan
Executive Summary
Even though it’s presented in the beginning, this section should actually be written last. The executive summary of your online business plan will be inspired by the rest of the document, and is used to introduce your business to the reader.
Introduction
The company introduction explains:
- What your business does
- What problem(s) your business solves
- How your business solves the problem(s)
- Your business model
- Your mission statement
- Your values
Crafting this portion of your online business plan will keep you focused. By determining the specific problems you’ll solve and labeling your company values, you have a better chance to create a solid business identity. As you move forward in building your online business, there are times it will be tempting to go off the path you’ve chosen as new potential opportunities emerge. Referring back to this portion of the business plan will help you accept or reject opportunities depending on how they align with your stated vision, keeping you on track without too many distractions.
Research
Market research will help you identify your market and uncover opportunities to stand out in a potentially crowded marketplace, providing useful information regarding:
- Your ideal customer
- Size of your market
- Competitors
- What is your differentiation in the marketplace
- Advantages and opportunities you have that will enable your success
Knowing who and where your customers are will help you serve them better. It doesn’t matter if you are providing the same service as countless other businesses if you do it in a way that stands out from your competitors. To do that, you need to be specific in your own focus, and you also need to know what your competitors are doing and how customers respond to their efforts.
Organizational Structure
Mapping out the organizational structure explains the roles and responsibilities for anyone involved in leading the business.
- Your business’ legal structure (LLC, S-Corp, partnership, sole proprietorship, etc.)
- Founders and officers and their contributions of expertise and capital
- An organizational chart illustrating who currently works for the business, and any future roles you plan to fil
Choosing a business structure impacts how you manage day-to-day operations, the way taxes are handled, how much of your personal assets are at risk, who is legally responsible for the business, and who is entitled to the benefits of ownership. This portion of the plan is a significant part of the foundation of any business, and should be created with flexibility, scalability, and potential growth in mind.
Products and Services
A detailed explanation of what you’re selling and how you’ll get it into the hands of your customers will help keep you on track to do what you do as efficiently as you can. This section of your ecommerce business plan will include detailed descriptions referring to:
- Your products and services
- Pricing and profit margins
- How your products are created and/or sourced
- Order fulfillment process
- Ownership of any trademarks, copyrights, or patents that will be used in the business
In the future, your customer needs will morph, supply chain issues could impact product availability, and certainly emerging technologies will probably provide new fulfillment opportunities. The best way to prepare for those changes is with a solid foundation of knowledge and strategy that is outlined in this section of your online business plan.
By corralling the information on what you’re providing, how you’ll provide it, and the resources you have available to launch and maintain your business, you have a launchpad from which to respond to future changes in the marketplace.
Strategic Marketing and Communications Plan
There are more ways than ever to reach an audience of online buyers, and the flip side of that is that audiences are inundated with marketing messages at every turn. Knowing your products, knowing your customers, and knowing your business will help you create a standout ecommerce marketing and communications strategy to include:
- An analysis of Strengths, Weaknesses, Opportunities, and Threats (SWOT)
- Marketing action plan listing channels you’ll use, like online advertising, SEO, email marketing, electronic media, social media, content marketing, influencer marketing, and how you’ll use promotions and create potential cross promotional partnerships
- Identify your marketing and sales goals (for example, increasing email subscribers, growing market share, or a certain percentage increase in sales) and making them definable, date driven, and measurable
- Marketing budget to estimate the appropriate investment and track results against cost
- Goals and success measurements for marketing activities
Finances
Many online businesses can be launched with very small budgets, so this section sometimes overlooked when creating an ecommerce business plan. However, no matter how big or small your budget is, this portion of your business plan will help you set sales and revenue goals that can be used to attract investors as well as ensure your business is appropriately and realistically capitalized.
If your business hasn’t launched yet, this section should include:
- Revenue projections
- Funding information
- Expected costs
If your business already exists, this portion of the plan should include:
- Historical and forecasted revenue
- Investments
- Debts
- A profit and loss statement
- Expenses (supply chain, labor, website hosting, etc.)
- Budget vs. actuals
Turning Your Idea into a Viable Business
Creating your online business plan is just one step of many when you want to carve out a new career by creating a new business. After you settle on your business idea and determine how you’ll manage operations, you need to plan for the future so your business can continue to thrive.
The information available for hopeful business owners can make it seem easy to make your career and financial dreams come true through online entrepreneurship. The actual truth is that although most people can figure out how to put up a website and “open an online business,” sustainable success isn’t likely to be achieved without a deep understanding of the leadership strategies required for small business management. Opportunities like Millennia Atlantic University’s Retail & E-Business Entrepreneurship program provide the tools necessary to launch and maintain a business that can grab a significant and measurable portion of the growing ecommerce market. (NOTE: This particular program at MAU has the added element of an opportunity to secure seed money for startup capital.)
For those with an entrepreneurial mindset, committing the identity, values, and planned progress of your business to an ecommerce business plan frees you up to take action, execute the plan, and scale your ecommerce business into a successful venture.