Every e-commerce business needs a plan. As the old saying goes, “failing to plan is planning to fail.” The rise in easy-to-use and affordable e-commerce platforms has facilitated a huge increase in the number of successful online businesses. But that’s not all your business needs to thrive.
A profitable and long-lasting online store requires forward planning, and an e-commerce business plan is essential in helping you lay the foundations for your business’s future growth and success. In this article, we’ll go through:
- What an e-commerce business plan looks like
- Who needs one
- Why you need one
- Everything you need to include in your own plan
What Is an E-commerce Business Plan?
An e-commerce business plan is a written document that details and outlines your business, your business goals, and how to achieve them. It also describes how you plan to maintain and scale your business, financial plans, customer base, and many other details that help you manage the direction of your e-commerce business.
Why Is an E-commerce Business Plan Important?
Far from just another task on your to-do list, an e-commerce business plan plays a crucial strategic role in the success of your venture. Below are just a few ways an e-commerce business plan helps you achieve your business goals, highlights your pain points, and helps you to plan for the future.
Helps You Develop Your Value Proposition and USP
A common problem for e-commerce business owners is how to differentiate their stores from the hordes of others that exist. However, even if you don’t have an e-commerce niche, it’s still possible to distinguish your store from the rest by developing a solid value proposition and unique selling proposition (USP).
When you start to put pen to paper about what makes your business unique, you’ll begin thinking about factors you haven’t thought of before. Much like a mind map, you’ll start small, and expand on your original ideas and goals. You’ll be surprised how much an e-commerce business plan can help you evaluate, clarify, and refine your value proposition and USP and, in turn, understand the scope of your business.
Helps You Establish Business Goals
Making a profit is a priority when it comes to business goals, but an e-commerce business plan helps you outline exactly how you’ll achieve that. Getting a plan down on paper helps you create realistic goals, separate your short-term goals from the long-term ones, and specify exactly what you can do to achieve them.
Helps You Avoid Making Mistakes
E-commerce business plans not only help you realize what you need to do to achieve your goals but also what you should avoid doing. Your business plan will help you identify common mistakes that you may be at risk of making before it’s too late. For example, targeting the wrong customer base, choosing the wrong e-commerce tools, or not doing enough research into dropshipping options.
Helps You Identify Opportunities
Usually, when you embark on your e-commerce venture, your product is front and center of your mind. However, an e-commerce business plan helps you identify opportunities to promote your product, expand and differentiate your business, and build any relevant partnerships.
Helps You Evaluate Your Competitors
Once you get stuck into your e-commerce business plan, you also get immersed in what your competitors are doing well, what they’re not doing well, and any opportunities you have to plug gaps you may not have explored.
Who Needs an E-commerce Business Plan?
No matter where you are in your e-commerce journey ― whether you’re just started out, are looking for investors, or have been running your online store for a while ― everyone needs an e-commerce business plan. Every stage of your online business needs a plan to be successful.
At the beginning of your e-commerce venture, an e-commerce business plan helps you put your goals into action and estimate how much time and money you’ll need to make these goals a reality.
When you want to attract investors, an e-commerce business plan helps you outline why your business is worth their investment. When you want to grow your business, you need a plan to help you work out how exactly to take your business to the next level.
What To Include in Your E-commerce Business Plan
Your e-commerce business plan is the cornerstone of your business. It lays out clearly the how, why, what, when, and where of all of your business goals, which can sound quite complex.
This level of information can feel overwhelming. To make writing your e-commerce business plan simpler, we’ve broken down the main sections you’ll need to address into digestible sections.
Like the synopsis of a book, an executive summary gives anyone who reads your business plan a high-level understanding of what your business does, what your goals are, and how you’re going to achieve them.
Even if you’re creating a business plan for your eyes only, an executive summary helps you reaffirm your business concept and ideas. An executive summary should be a one-page document that outlines:
- The business concept
- Your products and services
- Vision and goals
- Current and future financial state
- Your team
- Your expected growth trajectory
- Your marketing strategy
Your Product and Services Plan
In this section, you’ll highlight exactly what products and/or services you will sell. This is your chance to think about how your products serve customers, what makes them unique, and why they’re worth a certain price point.
You’ll also expand upon how your products are sourced, manufactured, and stored, how much they cost to produce, and what the life cycle of your product or service is. If you sell multiple products or services, highlight the key, high-level features of each.
Any successful e-commerce venture starts with knowing your specific market inside and out, which requires an in-depth market analysis. This section will outline:
- Industry trends and growth: Think about where there are opportunities in the industry, where the market is saturated, and how you can exploit any gaps in the market.
- Competitor analysis: Who are your main competitors and how can you compete with them realistically? What will you do differently? What will you do better?
- Buyer personas: Who will buy your product or services and why? What key demographics will you serve and how will you make your product or service attractive to them?
Building on your buyer personas, this section helps you delve into the personality, habits, and lifestyle of your target customers. This benefits you when creating your marketing plan since you’ll know who to target and how. Include information like:
- Where they live
- Their age bracket
- Their job title
- Their income level
- Their lifestyle choices
- Their shopping patterns
Customer profiles are the bedrock of every marketing plan. They’ll inform how, where, why, to who, and when to market your products or services.
Your marketing plan section should be as detailed as possible since it will form the basis of how you’ll get the eyes of potential customers on your product. At the very least, your marketing plan should include:
- Information on pricing points: How much does your product or service cost? Why does it cost this much?
- The product or service: Again, how does your product or service stand out from the crowd, and how can you showcase its originality?
- Where you’ll market your product or service: Which sales and marketing channels do you use to promote your products? Why are these channels a priority?
- Financial information: How much will you spend on your marketing efforts?
Financial Plan and Projections
Of course, the success of your e-commerce store hinges on how well you manage and plan your finances. Most financial plans include:
- An income statement
- A balance sheet
- A cash-flow statement
If you haven’t yet launched your store, it’s best to focus on your financial projections for the first six months of your business. Your projections will take into account your proposed customer base, marketing plans, expected expenses, and potential profit.
Prioritize Your E-commerce Business Plan and Set Your Store Up for Success
Every successful business venture starts with a solid foundation and creating an e-commerce business plan gives you the chance to:
- Identify opportunities
- Assess any potential risks
- Gauge how viable your e-commerce business is
- Overcome future hurdles
- Learn about the aspects of the business you’re unfamiliar with
An e-commerce business plan isn’t just another pile of paperwork, but a vital step in securing the success of your business.
What Should You Do Next?
A thorough and well-researched business plan is paramount to bringing your e-commerce business from the planning phase to the launch phase. Choose the best e-commerce platform that allows you to manage your e-commerce website, products, sales, marketing, and inventory, all in a single location.
Evaluate your KPIs (key performance indicators) as often as possible. It assesses your e-commerce business’ growth if it’s still on track in reaching the goals you set out in your business plan. The best KPIs provide meaningful and actionable insights to grow your e-commerce business. Use the insights to optimize your customer experience across the buyer’s journey.
A good e-commerce business plan is driven by research and data. To keep it smart and realistic, update your forecast by identifying what works and what doesn’t. Seek opportunities to sustain the financial growth of your e-commerce business, and your growth as an e-entrepreneur. Good habits help you grow faster, keep on learning, and expand your knowledge on how to thrive as an e-entrepreneur.