E-commerce business plan: the stamp of success for your e-commerce?

Are you planning to open your own e-commerce? And do you want to make your e-commerce business plan to start on a good footing?

Appvizer will refresh your memory and tell you all about e-commerce business plan starting from its usefulness to guiding you in the creation of your business plan!

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Definition of a business plan: What is a business plan in a nutshell?

A business plan is a concise document that will allow you to present the pros and cons of your project in a simple and effective way, so that you can clarify your business idea. Your e-commerce business plan will allow you to answer the following questions:

• Is my project feasible? Will it be profitable?
• What activity will I perform exactly? What is my expected turnover?
• What types of products will I sell on my e-commerce platform?
• What strategy will I use? In which niche will I position myself?
• Who are my competitors? What factors will differentiate me from them?
• How will I distribute my products or offer my services? Through which channel?
• What will be the timing of the sale of my products?
• Will I work alone or will I have to hire other employees?
• What is the total amount of my investment?
• How will I finance these investments?

The business plan is a real tool for clarifying ideas and structuring the project. It should never be overlooked.

A business plan is a reference document whose objective is to present your project of creating an e-commerce. It explains, as pedagogically as possible, the economic model of your e-commerce, the type of product proposed, your medium- and long-term strategy and your sources of financing.Your business plan must convince an outside observer of the feasibility of your project, the adequacy of your skills.

Why is it necessary to make an e-commerce business plan?

The business plan has three main objectives. It allows you to:

• Understand whether your e-commerce project is feasible; your business plan will allow you to determine the relevance of your project from a strategic and financial point of view.Thanks to the business plan, you can plan your costs and actions.
• Convince business or financial partners of the quality of your project: in order to be credible with external partners, you must present them with a feasible project, with a financial plan that confirms its profitability with concrete elements.
• Serve as a guide during the realisation of the project: for the entrepreneur, as for his team, the business plan serves as a reference point throughout the realisation.

Depending on your objective, the interlocutor will therefore not be the same, so your business plan must adapt to the interlocutor and highlight elements that may be of interest to him/her. For example, if your objective is to sell the company, you will emphasise certain elements such as revenues and the market, but if you want a bank loan, you will have to focus more on the financial plan. For this you need to determine what the brakes and decision factors of your interlocutor are.

How long should an e-commerce business plan be?

The business plan is a document that follows various norms and standards. However, in practice, no single page number prevails. In its form, a business plan should be consistent. Some projects will require a lot of detail, so their business plan may be around 30 pages long. On the other hand, other projects will be limited to the essentials and their business plan might be only a few pages long. There is only one rule: get to the point to convince the reader of your document.

Guide to Creating an E-Commerce Business Plan

Since every project is unique, there is no universal e-commerce business plan template suitable for all projects. However, there are certain elements that you should necessarily include in your business plan. Here is a business plan template you can follow.

Index

First of all, you should start with a table of contents in which you list the different parts that you will cover in your e-commerce business plan. The table of contents makes the document much easier to navigate.

Writing an Executive Summary

When writing an e-commerce business plan, the introduction should be dedicated to the executive summary. It consists of a relatively short part of about 2 pages, but very important when writing your e-commerce business plan.In this part, you should summarise what your e-commerce project consists of in order to give an overview of your e-commerce.

Elements to include are: company name, nature of your business, values and history of the project, target audience and type of market (competitors, size, opportunities). It is often essential to present the management team.

E-commerce presentation

The purpose of this third part of your e-commerce business plan is to present and provide an overview of your e-commerce.

In this part, you should state the name of your e-commerce, your objectives, the type of products you will sell, the sector in which you will operate, and what you think your strengths are that will distinguish you from your competitors. At this stage try not to write a papyrus, do not go into too much detail regarding the financial part and your marketing strategy, you will have the opportunity to dwell on these two points in later parts. The presentation of your ecommerce business should rather focus on the sector you operate in and show the opportunities there. Also, try to explain what elements will differentiate you from other ecommerce businesses. If you are using the business plan to apply for financing, explain the usefulness of this financing for your project without going overboard.

Introduce your employees

Present the education, background and skills of each member of your team. You will need to specify the role of each of your collaborators and that of each co-founder. You must also designate the person who will act as the company's legal representative and manager.

The objective is to explain the importance of the people who will collaborate with you and their usefulness for your e-commerce in order to convince potential financiers and partners of the relevance of the project.

Description of the product or service

In this part of your e-commerce business plan, you will have to talk about the products you want to sell in your e-commerce and what kind of need they meet.

You should first describe the characteristics of the product or service you wish to sell on your ecommerce site, how it can be used, and what distinguishes the products you wish to sell from those already on the market.

Do a market analysis

To draw up an e-commerce business plan correctly, there are three main elements that you will need to include in your market study:

• The supply : you will need to identify the supply available in your target market. Competitors are the key component. It is important to know how many competitors are in the market, the variety of their offer and the prices they charge. Understanding their e-commerce strategy is also essential to understanding the existing supply in the market.
• Demand:you will have to make a careful study of your target customers, their consumption habits, average budget, unmet expectations, etc.
• Potential market gap: you will have to identify one or more needs that your competitors do not satisfy in order to determine the advantages that can be exploited by your e-commerce to position yourself better.

The best way to identify your target market is to go and meet your customers, competitors and other market players. The rule is simple: to create your e-commerce business plan, you must be able to understand the concrete expectations of your future customers.

Good to know: it is rare not to have competitors. There is always competition, even if it is indirect. Watch out! For many investors, the absence of competitors is a sign of an idea that the public is not interested in, or worse, of a company that has not analysed the market properly.

Defining an e-commerce strategy

To define an e-commerce strategy, many entrepreneurs resort to the classic 4P method also called mix marketing.

• Price: this must contain a list of the products and/or services offered by the company, the proposed formulas and detailed prices (price list, scale rates, etc.).
• Product: a catalogue of goods and/or services must be drawn up, indicating the characteristics of each product, the packages offered, promotional offers, etc.
• Location: the distribution strategy must be carefully defined. It must be determined through which channels the company will sell its products or services (e-commerce site, social networks, etc.).
• Promotion (communication): this point corresponds to the communication strategy.

The important thing is to plan a feasible and profitable strategy, no matter how big or small your business is.

The business strategy defines how the business will succeed in the market. The communication strategy serves to make your e-business known to future customers.

Determine your communication strategy

Determining your communication strategy to draw up a business plan allows you to:

• Define your company image: this is about giving your company its own identity by choosing its graphic charter (logo, colours, etc.) and its sales pitch (keywords to be used to trigger a sale).
• Publicise your business: it is necessary to determine the channels that will be used to promote your business (creation of a website, social networks, newspapers, TV, transport advertising, etc.).

The communication strategy should not be neglected in the e-commerce business plan. Today, thinking about an online communication strategy especially when it comes to e-commerce is an essential element if you want to keep your project alive.

The Financial Plan

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The financial plan allows you to estimate the future financial situation of your e-commerce business. The financial plan has to be adapted according to who you are addressing, the aim is to say the essentials and to include the calculations in the appendix. You should mainly address the following points:

• Initial expenses and capitalisation: Talk about the cost needed to start up your business and the turnover you could make from it.
• 12-month (month by month) and three-year (quarter by quarter) profit and loss projection
• A 12-month cash flow projection and a three-year cash flow projection (quarter by quarter)
• A projected balance sheet at the start and end of years 1-3
• A break-even calculation

The business plan is the first step to think about before starting a project, so that you can understand whether your project will have a smooth life or encounter problems in the short or long term.

Making an e-commerce business plan is essential, not only if you are looking for investors or to obtain a loan, but also to understand if your project is feasible, make all the steps in your business plan to reach your goal!