Becoming an entrepreneur and starting a business is one of the most thrilling experiences: you’re taking the risk to bring a new entity into the world in the form of products or services that intend to improve someone’s life. However, starting a business doesn’t come without its challenges.
Roughly 20% of new businesses close within the first year, so how do you protect your business entity and future-proof it to succeed in the long term? The answer is planning.
The key to longevity in the business world is to create a solid eCommerce business plan with an unwavering strategy right from the start.
Creating an eCommerce business plan should be the very first step you take before any other business process. As much as you’d want to dive in headfirst and create products, build a website, and market your offering, it’s essential to do the necessary research to establish whether you have a viable product that the market is interested in enough to purchase.
To help you lay the groundwork for your eCommerce business, we have outlined all of the reasons why you need an eCommerce business plan and what’s included. We have also shared some of the most frequently asked questions we have been asked about building an eCommerce business plan which should prove to be helpful in your future growth plans.
Do You Need an eCommerce Business Plan?
Similar to a traditional business plan, an eCommerce business plan is a document that details your business and all aspects, strategies, and steps required for the entity to find long-term success. It is structured into various sections, each of which covers a particular facet of your business. Within these sections, you’ll explore areas like explaining your entire product or service scope, identifying your consumer segment or segments, defining your logistics strategy, etc.
Typically, business plans are created to help businesses pitch for funding. However, whether you are brand new to the business world, seeking investment, or want to re-evaluate and improve your eCommerce entity, an eCommerce business plan is an invaluable asset. Here’s why:
- Gain clarity and focus for your business. One of the most significant components of an eCommerce business plan is research. During the research phase, you’ll have to put in the time to really understand the relevance of your product or service within the market you’re approaching. With these research insights, you’ll be able to make informed, data-driven decisions about your business, products and consumers going forward.
- Understand your customers and competitors. By doing the necessary research, you’ll develop a clear understanding of your consumers. You’ll discover who they are, what they are like, what they need, and how you can improve their lives with your products or services. Another benefit of doing research is that it’ll reveal who your direct and indirect competitors are. Here, you can identify what their mistakes are and avoid them. You can also determine what your competitive advantage is.
- Allocate resources effectively. Once you have completed the financial statement section, you’ll have a good idea of where your business entity is in terms of finances. With accurate financial forecasting documents, you can confidently make decisions in your business, such as procuring, producing or developing more products, hiring human resources and so on.
- Prepare to pitch for funding. Businesses that want to pitch for funding from investors will need a business plan. A prospective investor will not consider your business without a business plan. Investors will need to see accurate financial data before deciding whether yours is a lucrative entity to invest in.
- Find areas of improvement. Even if your business has been operational for some time, it’ll still be a good idea to complete an eCommerce business plan. Going through this extensive process will help you find areas of improvement, discover financial drains, re-evaluate your marketing strategy and more.
With this, it’s important that you take the time to do the necessary research and evaluations to make sure your brand and eCommerce business will be a success. Once you have all of the information you need compiled into a well-structured and detailed document, you can easily share it with new investors and add on to it as you evolve your business. It is essentially a working document that you can quickly refer to regularly for consistency: as you create your website, continue developing your product range or service scope, develop your social media presence, etc.
10 Steps to Writing an Effective eCommerce Business Plan
Writing an eCommerce business plan is a lengthy process. It requires time, energy, and patience, especially during the research component and financial statements formulation. There are many things to consider, and it’s a time-consuming process. To help you along, we’ve created a whitepaper that outlines exactly what you need to do to build a rock-solid eCommerce business plan.
Within the whitepaper, you’ll find extensive information on each section of the business plan, including:
- Executive Summary This is a detailed overview of your business that summarizes the most important elements of the business plan. It should be detailed enough for time-strained investors to glance over and get enough information about your business.
- Company Overview. To make sure your business has a solid start, in this section, you’ll explain your overarching strategy, long-term vision, and unique approach to entering the market. There are several aspects to include here, including the legal entity structure of your business, your differentiators, ownership structure, and more.
- Market Analysis. In this section, you’ll share your key findings from your market research. Here, you’ll include insights gained from macro and micro analyses of your business.
- Competitive Analysis. Having a strong footing in the market amongst your competitors is key. During the Competitive Analysis, there should be a detailed breakdown of your direct and indirect competitors and information on your competitive advantage.
- Consumer Analysis. To ensure that there are buyers for your products and services, in the Consumer Analysis, you’ll share precise information about your consumer, including demographic, psychographic, and buyer behavior data.
- Management and Organization. Discussing the larger organization behind the entity, in this section, you need to outline the legal structure of your business and describe each stakeholder involved.
- Products and Services. More than simply detailing your product or service scope, in this section, you’ll explain each aspect, attribute, and function of every offer in your suite.
- Logistics and Operations Plan. From packaging to delivery, this section of the eCommerce business plan discusses the daily workflow and processes related to getting your products into the hands of your consumers.
- Marketing Plan. To make sure your products and services get in front of the right audience, you need to have a clear idea of how you’ll market your business. In this section, you’ll be prompted with several questions relating to the marketing of your business, with the aim of helping you refine your marketing strategy, channels and media forms.
- Financial Plan. Often the most challenging section to write, in the white paper, you’ll find information on which cost and revenue predictions to include, from your business’ income statement to the balance sheet and more.
Frequently Asked Questions About eCommerce Business Plans
Below are some of the most commonly asked questions about eCommerce business plans. Be sure to cover all of the following bases either before you begin writing yours or when it’s complete.
- How should I present my eCommerce business plan? Traditional business plans are often presented in written form and formatted as documents, however, in today’s day and age, you could get a bit more creative. You could choose to create a presentation using PowerPoint, Apple Keynote, Canva or similar; just remember that the financial section requires financial documents to be presented in a standard format and must be easy to read.
- Do I need to write an eCommerce business plan if I’m not planning on pitching for investment? Yes, even if you don’t intend on raising funding for your business, it’s still a great idea to create an eCommerce business plan as it’ll force you to focus, do research and get brutally honest on the research findings. The process of writing an eCommerce business plan will bring you a lot of clarity and direction for your business.
- Do I need to write an eCommerce business plan if I’ve had my business for some time? Yes. Whether your business is a start-up or it’s been running for a few years, taking the time to do the necessary research, investigation and assessments as per the business plan structure will allow you to see if there are areas that need improvement.
- How long should my eCommerce business plan be? While there’s no hard and fast rule for the length of an eCommerce business plan, it’s essential to include as many important aspects and insights but not drone on unnecessarily. Maintain focus, keep your business plan concise, and consider approaching an editor of sorts with experience in this space for a third opinion. If you are creating an eCommerce business plan for personal reasons, it may be quite short; however, if the eCommerce business plan is going to be sent to investors for funding, it will more than likely be considerably longer.
Create Your eCommerce Business Plan
Your eCommerce business plan will become one of the most important assets of your business. If you’re ready to dive in and start working on your business plan, we’ve put together a concise resource in the that you can download now. In this whitepaper, we’ll take you through each of the sections of an eCommerce business plan and guide you with questions and prompts to help you complete each section in full.
Inside, you’ll find plenty of tips and advice on how to complete your business plan. By working through each section, you will end up with a single working document that’ll give you a clear scope and concise plan for your business.
You will learn about the importance of creating an eCommerce business plan for both new and existing ventures, with or without the intent to raise funding, as well as:
- What an eCommerce business plan is
- Why you should create one
- How to write an eCommerce business plan, including a breakdown of each section
- What information to include in your eCommerce business plan for optimal success
By the time you work through the template in the whitepaper, you will have a solid eCommerce business plan at your disposal. You could either use it to pitch for funding or keep the business plan as a guide for making future business decisions.
When is the Right Time for eCommerce?
Find out if now is the right time to leap into the digital world by downloading our eCommerce Business Plan Template. It will get you thinking about your business goals and better prepare you for digital transformation.