A smart entrepreneur will carry his or her enthusiasm for a new business concept into one of the first major tasks that brings an ecommerce business from an idea to a reality: creating a business plan. This crucial document will help guide business owners during the initial start-up period and as they change, grow and gain experience in ecommerce sales. Whether you're seeking investment funding or starting as a one-person operation, having a business plan is essential.
Business plans themselves can take on a variety of forms, including internally and externally facing versions. They can also include various sections and pieces of information based on the form used.
Creating a business plan allows new business owners to put their best ideas down on paper as well as identify potential problems before they become a reality. Here is a breakdown of an internal business plan:
**The summary:**This section serves as an executive brief or quick description of a business and its operations. A mission statement fits into the summary section. For an internal plan, this area should remind the business owner and any employees about the whys and hows of operation. A good strategy for creating a useful summary is to write an outline, complete the rest of the business plan, then fill out the summary to match. If something sounds incorrect or misleading in the summary, then further review and revision of the business plan is needed.
The company description: Delving deeper into operations, this section provides a longer look at what a business will do and how it will do it. Important components to mention include the purpose of the new venture, as well as the part of the ecommerce market it's targeting. It's important to be specific about the expected type of customers and the merchandise to be sold.
Market analysis: This part of the plan can differ greatly based on your type of business. For ecommerce websites, it's important to understand if there's a demand present for your products, and how much demand exists. Include a list of major competitors and how relatively strong or weak they are in the market. It's also crucial to develop a price structure, create profit and revenue expectations and have an understanding of how competitors price and sell their products.
Organization and management: This area may not be particularly important for a small business with just one owner-operator. But when a company has more than one employee, documenting the division of duties is vital. Projections for the future, assuming more staff are hired, can also be useful further down the line. Some information about the technical structure of the company should also be included.
Products: This section should include a breakdown of exactly what products will be sold, and how they'll be acquired and distributed. For ecommerce stores, a unique consideration to include is whether or not drop shipping will be used. This part of the plan should also take into consideration how often the average buyer will make a purchase, initial stock levels and primary and alternate vendors, if applicable.
Marketing and sales: Detail how potential customers will be contacted and convinced to not only buy a given product, but buy that product from your specific store. This is especially important for ecommerce businesses, as there is a often a "long tail" of other retailers who offer similar goods. Creating a section about differentiation and whether a store will do so through prices, style, service or a combination of these factors will help guide your marketing efforts.
Financial projections: This section is often used in an external plan to convince potential investors of financial stability, but an internal plan can benefit from it as well. Creating a thorough and realistic projection of future operations will make the rest of the process easier and highlight areas that need more work.
Appendix: This is a roundup of more in-depth statistics and market research data that may not fit in one of the above sections, but is important nonetheless. An internal plan can use the appendix as a catch-all of important but hard-to-categorize information.
It's crucial for new ecommerce websites to not only set goals and expectations, but to define them as well. A business plan serves as part operational guide and part manual for the future. Creating this document before the launch of a store is almost always necessary for success and makes the process of growth and development easier, especially for a first-time business owner.