A business plan seems to be the key to the survival and success of any business. The purpose of a business plan is primarily to determine how a company plans to make a profit, and it applies to businesses either newly started or established. Such a plan can assist e-commerce startups in attracting capital, recruiting talent and maintaining high morale. To anticipate market trends and challenges, eCommerce companies are also expected to continually update their business plans.
Do you need a business plan for an eCommerce business?
Short answer, yes! The success of an e-commerce business is heavily dependent on a business plan. Here are some factors behind the widespread adoption of business plans:
- Determines whether a business is likely to succeed.
- Provides a proof-of-concept for a business idea.
- Assists in creating a clear set of values for the business.
- Analyzes the industry to identify opportunities and threats.
- Makes it possible to create fictional customer personas.
- Investors will be attracted to businesses with well-articulated business plans.
- Establishes a road map and timeframe for achieving goals.
- Outlines the marketing strategies to be implemented.
- Provides information about the product or service that will be offered
How to develop a business plan for an e-commerce startup?
An eCommerce business plan is essential to achieving your business goals. The following steps will help you create a business plan for your eCommerce startup:
1. Business identity
An introduction to a company is not very different from introducing ourselves in formal situations. We strive to present accurate, concise, and understandable information that includes all the relevant and significant aspects. A business plan presents a company’s introduction in the same way. Among such information are:
- Your company’s name
- Your company’s background
- Business Type & business model for eCommerce
- Business and industry nature
- The market segment to be targeted
- Licenses, awards, and achievements
- Leadership and ownership
- Statements of vision and mission
- Offerings, USPs, UVPs, or any strategic advantages
- Additional information that helps define your company’s identity
2. Market analysis
A market analysis report analyzes a market holistically to determine its attractiveness and conduciveness to business. No one can make a market viable if it does not present potential for any specific business. If it does, a market analysis report can explain how. Market analyses should at least include the following:
- Performance and trends in the industry
- Estimated market size and demand
- The state of the market
- Suppliers and distributors are available
- Ease of logistics
- Customer demographics and profiling
- The threat of new entrants, competition intensity
- Emerging products and substitutes
- Political, social, technological, and ecological factors
3. Marketing strategy
An organization’s marketing strategy should describe how it will create awareness of its products and services in its targeted market segment, attract customers’ attention, and interest, and eventually generate conversions (web traffic, footfall, queries, subscriptions, purchases, etc.). Among the key forms of marketing are:
- Advertising (television, print media, social media, billboards, SEM)
- Sales promotions (discounts, stock clearance, freebies, etc.)
- SMS, email, and door-to-door marketing
- Communicating directly with customers
- Public Relations
4. Financial planning
A great business idea may not always be commercially viable. Exactly this is what a business plan includes in its financial section – forecasting the financial viability of an intended venture not just now but also down the road. The following are some of the most important principles, concepts, and tools of financial management:
- Capital assessment, source(s) of capital, capital structuring, cost of capital, repayment terms, etc
- Budget for operational expenditures
- Forecasts for sales
- Cash flow projections
- Working capital management
- Statement of projected income
- Statement of projected profits and losses
- The projected balance sheet
- Break-even analysis
5. Executive Summary
In a business plan, an executive summary may be prepared last, but always presented first. An executive summary is a blueprint for your intended business idea. The executive summary is primarily intended to attract investors and reinforce the potential attractiveness of the business idea. Investors and other stakeholders might find it useful to have a short overview of all the relevant areas. The executive summary should not exceed two pages as a guideline.
About YRC Consultants
If you are determined to grow your retail business into a huge success, a business plan is your best friend. To gain a clearer understanding of how to achieve success, YRC can guide you through the creation of a business plan. YRC experts will validate your business vision and devise critical pathways. As part of the business planning stage, YRC’s experts work with the clients and their partners to identify the trends affecting their business under the current market conditions to lay the groundwork and improve the prospects for success.