Business plan to launch an e-commerce store
Do you want to get into e-commerce? The times seem favorable to this type of business which has many advantages and enjoys good growth every year in the world. But make no mistake, starting an e-commerce business is first and foremost about starting a business. And the first step before you start headlong is to write a business plan.
Writing an e-commerce business plan forces you to think about the future of your business. It prompts you to think carefully about all the essential aspects of starting and running a business, whether it’s online or not.
Even if you don’t want to think about what could go wrong, this is a good and necessary exercise because it helps you avoid potential problems before you jump into your new business. If you plan to use investors or a bank, the business plan is a must.
A business plan will help you set specific goals and develop a strategy to ensure the success of your business. It will also help you convince investors, or banks, to help you raise funds so that you have the capital you need to grow.
Table of Contents
- What should an e-commerce business plan contain?
- Market analysis: an essential part of the business plan
- Other sections of the e-commerce business plan
What should an e-commerce business plan contain?
With all these hopes and dreams for your new online business, where do you start? Here is an overview of the different sections that you can use to make sure all the most important details are included.
Although the summary only fits on one page, it is one of the most important sections of your business plan. This is where readers will get the main summary of your ecommerce activity. Although your summary should be the first section, there is nothing to prevent you from writing it last. The most important information to include in this section is listed below:
- The concept of the company
- Objectives and vision
- The unique selling proposition
- The target audience
- Marketing strategy
- Current and projected financial situation
- The team behind the company
When writing your e-commerce business description, you should focus on explaining what your business is, what you hope to achieve, and what sets you apart from your competition. Here are some additional details you can include in this section:
- Your business structure
- Your market niche
- Your business model
- A vision and mission statement
- The history of the company
- Key employees
- Company goals
Market analysis: an essential part of the business plan
Three main factors should be taken into account when analyzing your market: the size, the position of your business and the competition.
In short, by analyzing the size of the market, you estimate how many people will be interested in the product or service you are selling. To estimate the potential size of the market, start by considering your ideal type of customer.
For example, if you are targeting young parents, collect data on the number of young parents. Has this number stayed about the same? Perhaps the data predicts that this group will grow by a third over the next few years?
Once you get to know the demographics better, pay attention to trends and predictions. For example, if you are planning to sell baby clothes, you can look at general industry trends: Is the need for newborn clothes expected to increase over the next two years?
While your market size information will never be set in stone, you need to be able to back it up with data. Therefore, be sure to consult academic research and reputable industry-related information sources for these statistics.
Your company’s position in the market
In order to understand where your business is in the market, you need to get the full picture. So start by examining your own strengths and weaknesses. You can do this for the famous SWOT matrix.
In addition, you should also try to identify if there are any possible changes in the industry that you can take advantage of or factors that could hamper your chances of growth.
Direct and indirect competition
You might think your offering is unique, but the reality is that there will always be competition. If your market has been around for a while, part of the process is to identify a few companies that you see as your main competitors. Next, be sure to explain what makes your products or services different from their offering.
If there is nothing that really differentiates your product, maybe you can beat them on the price point? If you have the opportunity to sell your products for a lower price, you can use this example to show how your e-commerce site can differentiate itself from other online stores.
If you’re having trouble identifying your competition because few (or not) of them are offering what you’re selling, don’t forget about indirect competition. Are there any companies that are selling something that could be seen as an alternative to what you are offering?
These will be your indirect competitors and you will also need to take them into account when analyzing your potential market.
Other sections of the e-commerce business plan
Unlike the other sections, this one is simpler. Here you will summarize who is responsible for running your business and what are the responsibilities of each team member. To help you communicate this information in an easy-to-read format, you can create a flowchart.
In addition to introducing your team, you should include information about the legal structure. For example, will it operate as a sole proprietorship or a corporation?
Products and services
Although you have already referred to the products or services you are selling, this point deserves a specific section. You can add more general information about your product line and additional details about individual items and how they are sourced.
If you plan to expand your product line at a later stage, you can also include information about new types of products you plan to sell.
Type of clients
Knowing your target audience in depth is essential. It is this knowledge that will continually guide your decision making and generate qualified leads for your business. To better understand your target audience, here are some of the traits and details you should describe in your e-commerce business plan:
- Average income
- Center of interest
- Family status
- Socio-Professional Category
The more detailed the answers, the better. Ultimately, it should be crystal clear who your ideal client is. You can do this by creating a marketing persona.
With this information about the people you are targeting with your products or services, you can begin to develop your marketing plans. What strategies are you currently using, and are there any new methods you plan to introduce in the near future?
When writing your business plan, be sure to include the basics, such as the cost of the online platforms you will sell your products on, the features and selling propositions you will focus on, and how you will market your products. promotion of your offer (marketing channels such as SEO, social networks or advertising).
Service providers and suppliers
From suppliers to shipping, several providers will be necessary for the operation of your business. This information will guide you through key decisions that will affect your budget. Here are some of the questions to answer in this section:
- Where are your products made? Choice of supplier.
- If you make them yourself, who will provide you with the raw materials?
- How long will it take to manufacture your products?
- Do you have measures in place to deal with a sudden increase in demand?
- How many products will be readily available?
- Where will you store your products or raw materials?
- Which transport companies will you use?
- How will you manage your inventory?
Even if you are not looking for financing for your e-commerce business, it is still important to write a business plan. Not only will this help you assess the viability of your business idea before you head into it, it can also help you identify potential pitfalls that will allow you to be better prepared.
Writing an ecommerce business plan might not be the most exciting thing to do, but it is important nonetheless. You can think of it as a stepping stone that will take you to more interesting tasks, like marketing.