Creating a sound business plan and effective strategy is often the most challenging task. But it is vital to succeed in the lucrative eCommerce market. Even if you’re not looking to attract angel investors or share the plan with anyone, there are a couple of reasons that will compel you to write one for your business.
For instance, if you have launched an eCommerce store and you’re making decent sales, creating a business plan can help you see the bigger picture and chart a strategic model to ensure future growth. Or perhaps, five years into your business, you start feeling stuck, a business plan at this stage will help you think out of the box and unfold new ways to market your products and generate more revenue.
Creating a business plan for your eCommerce store can help you cut down unnecessary expenses or losses and stay focused on your goals. So, take a look at the vital components you must include when writing your eCommerce business plan, starting with:
1. Executive Summary: The executive summary should be clear and concise as it sums up your business at a glance. It is something you will use to present your idea to potential investors. The summary must include:
- What products are you selling?
- How it is different and what are its benefits?
- Will your online product fill up a gap in the market? If so, explain how and why?
- Who are the stakeholders?
- Financial projection
- How much funding will you require? Should this be complimentary to your financial projection?
Investors will make conclusions based on your executive summary. So, ensure it is well-thought, well-written, brief and relevant.
2. Business Description: This is a high-level overview of your business, products or services, consumers, and competitive advantages. You need to share all the important information about your company. Ensure you include details on how will you initiate your business, how do you plan to sell your products or services, your business goals, how it is different from your competitors, and your motivation for doing so.
3. Market Analysis: This is one of the most important sections in your entire business plan. As an eCommerce entrepreneur, you need to gain an in-depth understanding of the industry you’re operating in, the overall market outlook, existing competition, and target customer demographics. Analyze recent industry reports, visit nearby stores that sell similar products and interact with the representative or customers to gain valuable insights and create a spreadsheet to collate information about your competitors. Insights obtained from the market research can drastically influence your business model.
4. Choice of Technology: With several technologies and SaaS-based platforms out there, it is essential to understand the various features and functionality all these platforms offer along with the way they integrate with each other. If you prefer Magento business website development, it includes features and extensions for payment processing, social media integration, shopping cart abandonment, email marketing, customer loyalty programs, accounting, and a lot more. Create a detailed list of different elements you require to run your business as well as the monthly cost for each of them. This will help you determine the impact of the technology on your profit margins.
5. Operations: The goal of this section is to outline the administrative side of your online business including the way you operate, setting up a website or starting with online marketplaces like eBay and Amazon, your office location, your staff or assistants, equipment, your suppliers, overheads, and credit policies.
6. Financial Forecast: In this section, you need to provide a record of your financial transactions, dealings, investments (if any), and your current position. You need to project how your company will operate and assess the financial status including how things will be balanced at the end of each month, your cash flow and the overall financial health of your business.
Careful planning is vital to get your eCommerce business from the planning to launch phase while ensuring its success in the future. Creating a business plan will provide better clarity about your business and market. It will position you to benefit from the opportunities while mitigating potential risks that can affect your business down the line.
Have you created a business plan for your eCommerce store? Do you have anything to supplement to our list?
Share your tips with us using the comment box below.