How to Write An eCommerce Business Plan
Starting an online business can be very profitable, but it takes some planning.
Whether you’re starting a new company or adding eCommerce to your existing brick-and-mortar store for omnichannel retailing, there has never been a better time than now. To help you with this, we’ve created this guide on how to write an eCommerce business plan.
With the number of digital shoppers worldwide growing from 1.32 billion to 2.14 billion in just four years, it’s clear that there is a huge demand for online shopping, and eCommerce sales have been steadily climbing since 2014. With this growth rate expected to continue, now is the time if you want a piece of these increasing profits.
If you’re an entrepreneur who has been considering starting an online store, you should know how to develop an eCommerce business plan.
What Is A Business Plan?
A business plan is a document that outlines the goals of your company and how you will achieve those goals. There’s no standard format for these documents, but they typically cover what your company does, who it solves problems for, its structure, which market it serves; in other words, everything important about your company.
Having one also shows investors and partners that you are serious about the project, have done research into it, know how to operate in this industry, and have considered possible challenges.
What Is the Difference of an eCommerce Business Plan from Other Types of Business Plans?
The business strategy for an eCommerce company will be different than a traditional retail store. The structure of the plan may look similar, but there are key differences in terms of how to go about achieving that goal.
A traditional retail business plan would involve finding a storefront to lease and designing it. An eCommerce business plan, on the other hand, focuses on your digital store: your website.
When I first started my eCommerce business, I overlooked the need for customer service representatives and fulfillment staff. That was a mistake because an online retailer needs to provide support in addition to marketing.
If you already have a brick-and-mortar business, it’s important to cover all of the topics listed above when creating an online store.
How to Create An eCommerce Business Plan
Now that you know what a business plan is, why it’s important to have one and how eCommerce differs from traditional retail, we’re going to get into the good stuff. Keep reading for information on writing an eCommerce business plan.
This section is a summary of the business plan and should be written last. It summarizes what is covered in your eCommerce business plan.
The company introduction answers the following questions:
- What is your business?
- What is your business model?
- What problems does it solve?
- What are your values?
- What is your mission statement?
It is important to learn about the company’s customers and competitors. Conduct market research to know:
- Who your ideal customer is. What specific type of person will be drawn to what you have to offer.
- How big your market is. Your market size is one of the most important factors when starting a business. One way to find out how big your potential customer base could be is by looking at population data in an area where you want to start up shop.
- Who your competition is. What companies offer similar products or sell to the same audience as yours does?
- Why should customers choose your business over the competition?
- What are the opportunities for success in your industry?
In this section, you should explain:
- The legal structure of your business. Is it an LLC, partnership, S-Corporation, or something else?
- The founders and officers of the company (including their expertise and capital contributions).
- Who works for the company? Create an organizational chart.
Products and services
In this section, describe:
- What products and services you are selling.
- How much do you charge for such products and services, as well as your profit margins?
- Where and how you produce your products.
- How you fulfill orders.
- Trademarks, patents, copyrights, and other intellectual property that you have ownership of.
Include your marketing strategy in the eCommerce business plan to show investors and employees how you will get customers interested.
- SWOT analysis (strengths, weaknesses, opportunities, and threats).
- Marketing channels and tactics (social media, email marketing, search engine optimization (SEO), influencer campaigns, partnerships, etc.).
- Marketing goals and key performance indicators (KPI)
This is an important section of your eCommerce business plan. It helps you set sales and fundraising goals so that investors can see where you stand financially.
For pre-revenue businesses, include:
- Funding information
- Revenue projections
- Expected costs
For existing businesses, include:
- Historical and forecasted revenue
- Profit and loss statement
- Budget vs. actuals
eCommerce Business Plan Template
This template will give you an idea of what an eCommerce business plan looks like.
- Company name:
- Products and services:
- Target market:
- Marketing strategies:
- What does the business do?
- What problem does it solve and how do you plan to do it?
- Business model:
- Mission statement:
- Company values:
- Ideal customer:
- Market size:
- Competitive analysis:
- What makes the business different from the competition (advantages and opportunities):
- Legal structure:
- Leadership team:
- Organizational chart:
Products and services
- Product/service 1:
- Product/service 2:
- Product/service 3:
- Pricing, positioning, profit margins:
- Manufacturing/supply chain:
- Intellectual property claims:
- SWOT analysis:
- Marketing channels:
- Marketing strategies:
- Marketing goals, KPIs:
- Revenue (actual or projected):
- Profit or loss:
- Budget vs. actuals:
Final Thoughts on eCommerce Business Plans
You need to take the time and ask yourself what you want your business to be, why people should buy from you instead of someone else, and how you will find customers.