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Writing an eCommerce business plan is one of the first steps you should take if you’re thinking about starting an online business. Whether you’re opening an online-only shop or adding an eCommerce component to your brick and mortar store for an omnichannel retail experience, there’s never been a better time to sell online.
The numbers don’t lie: since 2014, the number of digital shoppers worldwide has grown from 1.32 billion to 2.14 billion. That’s a 62% increase! Currently a $4.28 trillion market, eCommerce is forecasted to make up a fifth of all retail sales by 2024. If you want a slice of the climbing profits, now is the time to get involved.
An eCommerce business plan can help you steer your online shop in the right direction. Fortunately, you don’t need a business degree to create one. Read on to:
Learn everything you need to know build, launch and grow an online store with this free guide.
A business plan is a document that outlines the goals of a business and how the business will achieve those goals. While there is no standard format for a business plan, such documents typically cover what the company will do, what problem it will solve, how the business is structured, who the target market is and how the product or service stands out from the competition.
A business plan serves as a roadmap for your company and helps you stay focused. Having one is also useful for attracting investors and business partners, as it shows you’re serious about your business, have done your research, know your industry and have considered the challenges you may face along the way.
While the structure of a business plan for an eCommerce business won’t differ much from a business plan for any other type of company, the business strategy at the core of the plan may differ greatly from that of a traditional retail store.
For example, a traditional retail business plan might describe plans for leasing and designing a storefront. An eCommerce business plan, in contrast, would focus on the company’s digital storefront: its website. One of your business goals for the first year might be identifying the best eCommerce software , rather than finding the perfect space to lease.
Another notable distinction: while a traditional retail business plan might include an organizational chart with many front of house staff members, an eCommerce business plan would emphasize roles in online customer service , fulfillment and marketing.
Now, if you already run a brick and mortar business and are adding an online selling component, you’ll want to cover all of the topics listed above.
Now that you understand what a business plan is, why you need one, and what differentiates an eCommerce business plan from a traditional retail business plan, it’s time to get into the good stuff. Read along to learn exactly how to write an eCommerce business plan.
This section concisely introduces everything that you’ll be covering in your business plan. Write it last, so that you can source inspiration from the rest of the document.
Explain what your company does and what makes it stand out. Use the company introduction to answer the following questions:
What does your business do?
What problem does it solve, and how?
Going through the exercise of considering these questions and putting your answers into writing will sharpen your focus as a business owner. When opportunities present themselves that don’t align with your values or help you solve your customers’ problems, then you can say no without doubts — or, conversely, you can enthusiastically accept opportunities that align with your vision.
Get to know your customers and competition. Do some soul searching and conduct market research to uncover:
Now it’s time for the less sexy stuff. In this section of your eCommerce business plan you should explain:
Explain what makes your eCommerce shop shine: its products and services. Describe, in detail:
Having great products is fantastic, but that in itself is useless if people don’t know about your products. Include your marketing strategy in your eCommerce business plan to show your team and investors how you’ll get your products in front of customers.
Your marketing strategy should include:
This is the juiciest section of your business plan. It helps you set sales and fundraising goals that will let you explain to investors where you stand financially and why you need their investment.
If your business is pre-revenue, include:
If your business already exists, include information like:
Now that you know everything there is to know about how to start an eCommerce business, it’s time to craft your business plan. Follow the template below to set yourself up for success.
Company name:
Founders/leadership team:
Products/services:
Target market:
Marketing strategies:
Business model:
Mission statement:
Company values:
Ideal customer:
Market size:
Competitive analysis:
What makes your business different from the competition? What are your advantages and opportunities?
Legal structure:
Leadership team:
Organizational chart:
Product/service 1:
Product/service 2:
Product/service 3:
Pricing, positioning and profit margins:
Manufacturing/supply chain:
Intellectual property claims:
SWOT analysis:
Marketing channels:
Marketing goals and KPIs:
Revenue (projected or actual):
Profit or loss:
Investments:
Budget vs. actuals:
When you record what you want to achieve and how you’re going to achieve it, you’re more likely to turn your vision into a reality. Take the time to think about your business, find out what makes your products different, and be thoughtful about how you’re going to find customers.
When you’re ready to build your eCommerce shop, turn to Lightspeed’s eCommerce platform. Watch a demo to learn more.
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If you want to start an Ecommerce business or expand your current one, you need a business plan.
Your Ecommerce business plan will accomplish several key objectives. First, it will help you create goals for your Ecommerce business and give you a roadmap to follow to reach them. It will also help you develop the right strategies to attain your goals. For example, by understanding trends in the Ecommerce industry, the strengths and weaknesses of other ecommerce businesses, and the demographic and psychographic needs of your target market, you can craft better product and marketing strategies.
You can download our Ecommerce Business Plan Template (including a full, customizable financial model) to your computer here.
The following Ecommerce business plan template gives you the key elements to include in a winning business plan for an ecommerce startup or an existing ecommerce business.
Below are links to each of the key sections of a sample ecommerce business plan:
What is an e-commerce business plan, do i need an e-commerce business plan, how often should i update my e-commerce business plan, how do i write an e-commerce business plan.
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Written by Dave Lavinsky
Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their ecommerce businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an ecommerce business plan template step-by-step so you can create your plan today.
Download our Ultimate Ecommerce Business Plan Template here >
An ecommerce business plan is a detailed and comprehensive document that outlines the strategies, objectives, and operational blueprint of an online business. It serves as a roadmap guiding the company’s operations and growth within the dynamic and competitive digital marketplace. The plan typically covers various aspects, including market analysis, target audience identification, product or service offerings, marketing and sales strategies, competitive analysis, financial projections, and risk assessments.
If you’re looking to start an ecommerce business or grow your existing ecommerce business you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your ecommerce business in order to improve your chances of success. Your ecommerce business plan is a living document that should be updated annually as your company grows and changes.
With regards to funding, the main sources of funding for an ecommerce business are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
The second most common form of funding for an ecommerce business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.
Venture capitalists will fund an ecommerce business but not in its infancy. You will need to first achieve sales traction. Once you do that venture capitalists might invest $2 million to $100 million into your business over time.
Below are the 10 sections a sample ecommerce business plan should include:
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of ecommerce business you are operating and the status; for example, are you a startup or do you have an ecommerce business that you would like to grow further.
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the ecommerce business industry. Discuss the type of ecommerce business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
In your company analysis, you will detail the type of ecommerce business you are operating.
For example, you might operate one of the following types of ecommerce businesses.
Ecommerce businesses based on businesses model:
Ecommerce businesses based on customer model:
In addition to explaining the type of ecommerce business you operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
In your industry analysis, you need to provide an overview of the ecommerce business.
While this may seem unnecessary, it serves multiple purposes.
First, researching the ecommerce business industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards subscription businesses, it would be helpful to ensure your plan calls for offering subscription options.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your ecommerce business plan:
The customer analysis section of your ecommerce business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: college students, sports enthusiasts, soccer moms, techies, teens, baby boomers, manufacturing plants, state government agencies, etc.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of ecommerce business you operate. Clearly baby boomers would want a different offering and branding than teens or government agencies.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Ecommerce Business Plan Template you can finish your plan in just 8 hours or less!
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other ecommerce businesses.
Indirect competitors are other options that customers have to purchase from you that aren’t direct competitors. This includes offline stores or other ecommerce companies that offer similar products or services. You need to mention such competition to show you understand that not everyone who needs the products or services you provide will frequent a business like yours.
With regards to direct competition, you want to detail the other ecommerce businesses with which you compete. For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
With regards to the last two questions, think about your answers from the customers’ perspective. And check product review websites to learn what your competitors’ customers like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an ecommerce business plan, your marketing plan should include the following:
Product/Service : in the product section you should reiterate the type of ecommerce business that you documented in your Company Analysis. Then, detail the specific products and/or services you will be offering.
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the menu of items you offer/will offer and their prices.
Place : Place refers to the location of your ecommerce business. In general, the place for an online business is well, online. But if there is a physical component to your business, document that here.
Promotions : the final part of your ecommerce business marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your ecommerce business such as warehousing, invoicing, serving customers, procuring supplies, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 10,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new product or service.
To demonstrate your ecommerce business’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in the ecommerce business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in ecommerce businesses and/or successfully running retail businesses.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per day or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your ecommerce business, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a massive $100,000 contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now to fulfill the contract. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an ecommerce business:
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include agreements you’ve negotiated with developers, manufacturers and/or employees.
Putting together a business plan for your ecommerce business is a worthwhile endeavor. If you follow the online store business plan template above, by the time you are done, you will truly be an expert. You will really understand the ecommerce business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful ecommerce business.
You can download our ecommerce business plan PDF here . This is a business plan template you can use in PDF format to help you get started on your own business plan.
Don’t you wish there was a faster, easier way to finish your Ecommerce business plan?
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success. Click here to see how Growthink’s business plan advisors can give you a winning business plan.
For years, you’ve purchased items from online businesses or marketplaces like Etsy, eBay and Amazon and thought to yourself, “I could do something like this, too.”
Starting your own ecommerce business may seem intimidating — writing a business plan, even more so.
However, a business plan allows you to validate your business idea, assess your financial position and create a concrete action plan for how you’ll deliver a product from the original source to the end consumer.
In other words, while the business plan might seem like it’s ultimately meant for other people’s benefit — potential investors, business partners or well-meaning family members who keep pestering you to write one — in reality, the business plan benefits you, the business owner, the most.
You’ll shape the vision and mission for your business and map out how you’ll get there. One study by Harvard Business Review found that entrepreneurs who write a formal business plan are 16% more likely to achieve viability than those who don’t.
An ecommerce business plan is a document that outlines your business purpose and goals, analyzes your industry and competitors and identifies the resources needed to execute your plan.
For example, which suppliers will you work with? What types of products will you stock? Who is your ideal buyer? How will you advertise your business? Can you afford to provide free shipping and still make a profit?
Here’s a step-by-step primer on how to write a business plan for your ecommerce store, what elements to include and how to use your own business plan to increase your chance of success.
Business plans help entrepreneurs maintain focus on their goals and shape the day-to-day running of a new business. The key elements of an ecommerce business plan template describe blueprints for growth, projected timelines and financial goals — clarifying topics like cash flow, expenses, marketing tools and distribution channels.
An executive summary provides a concise rundown of the key points in your business plan. In short, it should summarize your chosen industry, business purpose, competitors, business goals and financial position. Executive summaries average 1-3 pages and are ideally under two pages.
Explain the raison d’être for your startup. What problem will you solve for your customers? Who is the target audience? Where do you want your business to be in one, five, or 10 years?
Here are the main elements of an executive summary:
The problem statement or business opportunity : Describe a pain point or gap in the market that you are uniquely qualified to fill. (“As someone who used to own a convenience store, I heard many of my customers complain about the lack of healthy food options while traveling domestically.”)
Your business idea : State how you plan to approach the problem (“XYZ is a ready-to-eat meal company that lets travelers order and pack healthy meals ahead of trips so they can avoid eating fast food.”)
Company history : Describe what milestones you have achieved. Are you already working with suppliers? What is your current revenue? (“In 2021, XYZ fulfilled over 10,000 orders, generating $150,000 in revenue.”)
Industry and market analysis : Outline the trends in the market that affect your business, market size, and demand for your product. (“In 2022, the global health and wellness food market was valued at $841 billion and is projected to increase to one trillion by 2026.”)
Competition : Explain who your competitors are, outline their strengths and weaknesses, and make it clear how you will differentiate.
Timeline for key milestones : Project when you plan to achieve goals like breaking even, launching an IPO, or other key milestones.
Financial plan (if you are seeking funding from investors or banks).
Set short- and long-term goals for your business, such as achieving a certain amount of revenue or testing a new product idea. Business goals can be general and high-level or they can focus on specific, measurable actions (SMART goals).
The most realistic goal-setting approach is to set short-term goals as stepping stones to your long-term goals. For example, your short-term goal to decrease website bounce rate by 25% within 12 weeks might help you reach the long-term goal of growing conversions by 50% within one year.
Timeframes for short-term goals can range from a few hours to a year, while long-term goals generally take 1-5 years to achieve.
Outline your product offerings and specify where you’ll source each item. Some ecommerce businesses manufacture products in-house. Others work with wholesalers, manufacturers or print-on-demand businesses to resell their products.
Curate a tight product line that demonstrates your value proposition. Why should someone buy from your online store rather than another brand? Why would someone choose your products over a substitute if you don't produce goods in-house?
Ecommerce companies sell three types of products: goods, services and digital products. Tell your readers what you intend to sell and why. List each item and its purpose. For each, you want to answer the question “why?” Why are you choosing to offer these specific products and services? How do you plan on fulfilling orders?
If you’re offering a service, explain what you do and where. Are you local? Do you travel to your customers? Will you partner with similar service providers in other areas?
How will customers access the item if you're offering a digital product? Will they download software or education videos from your site? Will they pay a subscription or usage-based fee? What about licensing requirements? Mention intellectual property ownership (if applicable) including trademarks, patents and copyrights.
Describe your ideal customer. Define your product or service from their point of view. What problems does your product solve for them? What benefits or features do customers look for when shopping for that product type?
Create customer profiles that summarize your target audience in terms of demographics (age, location, gender, etc) and psychographics (pain points, interests, buying patterns). Consider creating customer segments based on shared characteristics if you cater to a wide audience.
Demographic data should include the following points:
Education level.
Relationship status.
Occupation.
Meanwhile, discover your target customer’s motivations, needs and wants as much as possible. Psychographic data should include the following points:
Outline your sales channels, both future and existing. For example, your main point-of-sale might be your ecommerce site. Be sure to include stats on site traffic and conversions so readers know how your site is performing.
Still, you might also offer your products online on marketplaces like eBay, Amazon and Etsy. Explain how each of these channels is performing and how you’re optimizing them for product discoverability and conversions (eg: following SEO best practices, using high-quality images, highlighting user-generated content).
Tell your brand's story , its purpose, and how the company was founded. In addition to the company description, provide details on how you currently run the business. List your business partners and employees and describe the business's legal structure.
The best brand names are memorable and communicate the essence of your business. Brand names gain icon status because they represent an excellent product or service, so don’t obsess over it.
That said, the right brand name can be your brand’s most valuable asset, driving differentiation and speeding acceptance. In fact, 71% of consumers prefer to buy from brands they recognize.
If you’re struggling to come up with a name, try using an online brand name generator as a jumping-off point. Remember, you’re not locked into a single brand name forever.
Describe the legal structure of your business. Is it a sole proprietorship, LLC, an S-Corp or a partnership? Consider speaking to an accountant if you’re not sure. Who is in charge of the business? List founders and officers and their contributions (both capital and expertise) to the company. Who works for the company? Include an org chart that illustrates who currently works for the business and the roles you plan to hire for . List their responsibilities, salaries and terms of employment (freelance, full-time, part-time).[
Your business structure]( https://bristax.com.au/business-articles/business-structures/ ) affects how much you pay in taxes, your ability to raise money, the paperwork you must file and your personal liability in the event of business bankruptcy, so this information is important to lenders. Also mention if you have filed or plan to file for any applicable licenses or permits.
Register a unique domain name for your business. A catchy brand name is essential because the domain is less likely to have been claimed by another business. Keep your domain name as short as possible and ensure it includes your brand name for SEO purposes.
Your mission describes the fundamental purpose of your business. It should tell people why the business exists and how it benefits its customers. For example, LinkedIn’s mission statement is “connect the world’s professionals and make them more productive and successful.”
However, be careful not to exaggerate. An overly aspirational mission statement is disingenuous and wishy-washy — no single corporation or small business will single-handedly “change the world.”
A vision statement is a declaration of what you want your business to achieve in the future by fulfilling its purpose. It describes your company’s “why,” while the mission statement describes the “who” and “what” of the business.
Your vision statement should define your values as a business (eg: reducing waste generated by single-use toiletries) and future goals (achieving a zero-waste world by implementing a circular economy).
Tell the story of how you conceived your business idea. Say you’re a former school teacher who discovered your artistic flair from making handmade pottery in your garage on weekends. Describe how your business has grown and changed since you first started it.
List the key personnel in your company. Aside from the founders and executive team, who keeps the business running each day? Here are a few examples:
Company owner — that’s probably you.
CEO — that’s probably also you.
Management team.
Customer service manager.
Logistics manager.
PR and social media specialist.
Advertising manager.
SEO manager.
Copywriters.
Ecommerce businesses face intense competition and are liable to market disruptions because they rely on third parties (suppliers, shipping companies, wholesalers) to deliver a product or service. Knowing the market in and out will help you build a more resilient business.
A market analysis considers your ideal customer (their purchase habits and behaviors), competitors (their strengths and weaknesses), market conditions (industry trends and long-term outlook), and how your business fits into this landscape.
The point of a target market analysis is to:
Identify the most and least valuable markets.
Develop buyer personas.
Find gaps in the market to fill.
Assess the viability of a product or service.
Improve business strategy .
The first step to identifying your target market is determining your total addressable market (TAM) — the maximum market size for your product or service. Who are your customers? What are their demographic and psychographic traits? When and how often will they buy your product?
The best way to obtain a high-level overview of your customer base is to consult your social media and web analytics. These dashboards show where your customers live, their age, gender, general interests and more. You can also use U.S. Census Bureau data to pad up this information.
Analyze the strengths and weaknesses of your current and potential competitors. First, find out who your direct and indirect competitors are. You can perform a Google search of businesses that sell similar products or scope out rivals in your local area.
Here’s what you need to know about your competitors:
What markets and segments they serve.
What benefits they offer.
Why their customers buy from them.
Details of products and services, including pricing and promotional strategies.
Search for publicly available information about your competitors. Aside from that, do some of your own primary research. Visit their website and complete an order or visit their physical outlet.
Next, analyze the information. Is there a segment of the market your competition has overlooked? Is there a product they don’t supply? Did you have a bad customer experience when you walked into the store?
Detail your competitive advantage in your business plan. Don’t just list things that your competitors do — that’s not analysis. The competitive analysis section aims to persuade the reader that you are knowledgeable about the competition and that your business idea has a significant advantage over the competition.
List the products and services you provide and how customers will access them. If you’re selling digital products, will customers have to stream or download the content? Do they pay a subscription fee to access a content platform or do they pay for each individual content piece? If you’re providing a service, will you provide it on physical premises or will you travel to customers’ homes? Will you sell physical products in a physical store or online? What is your website like? List each product, including a short product description and pricing information.
You need a go-to-market strategy if you haven’t already launched your business. How will you spread the word about your business? How and where will you advertise and what is your budget? If you run social media ads, for example, what platforms will you use and who is your target audience? Will you do content marketing and SEO? A thorough marketing plan answers all of these important questions.
Define which channels match your consumer demographic. Do your potential customers spend time on Facebook or do they prefer YouTube? First, figure out where your potential customers are. Next, create attention-grabbing marketing strategies and use them to reach your customer base.
Paid marketing channels
PPC advertising : Advertise on Google’s search engine and pay only once someone clicks on your ad. You can bid for ad placement in the search engine’s sponsored links when someone searches a keyword related to your business offering.
Affiliate marketing : Embed links to another business’s products in your content and receive a commission when someone makes a purchase using your unique affiliate link.
Social media ads : Run paid ads on social media apps and platforms like Facebook, Instagram and YouTube to reach targeted audiences. Ads can use different creatives such as images, videos and GIFs.
Influencer marketing : Work with a popular influencer who will promote your products to their followers. Influencers are paid based on conversions or reach.
Organic marketing channels
Brands must use an organic marketing strategy to build brand awareness and engagement and drive website traffic.
Examples include:
Search engine optimization (SEO) : Optimize your website, web pages and blog posts for maximum discoverability on search engines. This involves doing keyword research for your industry, creating high-quality content that attracts and converts and using keywords in the right places.
Social media posts : Organic social media posts build brand awareness and humanize the brand by providing a behind-the-scenes look at the company and allowing you to share engaging visual content to inspire, educate and entertain.
Blogger networks : Collaborating with trusted bloggers on link exchanges can help you build website backlinks, improving your search engine ranking.
Content marketing : Organic content includes blog posts, white papers, SEO pages, and more. This gives you content to post on social media and improves the discoverability of your website. Websites that publish high-quality content consistently rank higher in search results.
Email marketing : Create email templates for new and potential customers, cart abandonment, promotions and announcements and more.
Logistics and Operations plan
This portion of the business plan covers what you physically need to run your ecommerce company. Basically, it outlines how you’ll manage the flow of goods from the supplier (you or a third party) to the consumer. You cannot start a business without an established supply chain.
Your logistics and operations plan should cover the following:
Suppliers : Where do your raw materials or products come from? Do you work with a manufacturer who produces your product idea or are you reselling products from a supplier, wholesaler or distributor? What is the minimum order value? Do they require payment upfront or after the sale? Do you have a backup supplier in case demand spikes or there is a problem with fulfillment?
Production : Will you create your own products or use a third-party manufacturer or dropshipping company? If you’re creating your own products, where will this be done? What assets and equipment do you need? What are your operating costs?
Shipping and fulfillment : Outline how the product will reach the end consumer. How long will it take you to pack and ship products to customers? Will you use a third-party shipper? Will you ship internationally?
Inventory : How much inventory will you keep on hand and where will you put it? How will you track incoming and outgoing inventory? Do you need warehouse storage space?
The financial section of your business plan is where you prove the feasibility of your business idea and calculate your startup costs. It includes financial projections and statements that show your business’s current financial position and project where you hope to be in the future. This is one of the essential components of the business plan, particularly if you are seeking investment funding, a bank loan or a business partner.
In this document, you’ll forecast the company’s revenues and expenses during a particular period. Total revenue is the sum of both operating and non-operating revenues while total expenses include those incurred by primary and secondary activities.
If you subtract your expenses from your revenue sources, you’ll come up with your bottom line (profit or loss).
A balance sheet helps you calculate how much equity you have in your business. It summarizes your company’s assets (what you own), your liabilities (what you owe) and equity (money invested into the business plus profits).
A balance sheet enables you to calculate your net worth. All of your assets (machinery, inventory, business premises, etc.) go in a column on the left and your liabilities (accounts and wages payable, business loan repayments, business credit card payments, taxes) go in a column on the right. If you subtract your liabilities from your assets, you get your business’ shareholder equity.
This document shows how much cash is generated and spent over a time period. Cash flow determines whether your business is primarily gaining or losing money. Positive cash flow and profit margins are important because it enables your business to repay bank loans, purchase commodities and keep the lights on.
Explore our collection of free resources designed to help you scale smarter and accelerate your online growth from $1 million to $100 million.
Writing a comprehensive business plan is crucial not only for staying on track in the first year or so after launching your business but also for securing funding, finding a business partner and evaluating the viability of your business idea.
Who needs an ecommerce business plan, what are the benefits of creating a business plan, how do i start an ecommerce business with no money, browse additional resources.
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Updated Jan 15 2024
In recent years, ecommerce businesses worldwide have collectively created an industry that's expected to pull in $4.11 trillion worth of revenue in 2023, with a projected annual growth rate of 11.51%. If you've got a great idea for an online shop, this is a great time to jump in on the action!
But not so fast - before you quit your day job and sign up for an Etsy account , it's essential to take the time to create an effective, comprehensive business plan. While some people write a business plan designed to attract potential investors, there are plenty of reasons to draw one up, even (and perhaps especially ) if you plan to finance your own ecommerce business.
Simply filling in an ecommerce business plan template can help you familiarize yourself with the ecommerce business model, set goals, and make plans to help you avoid unfortunate surprises. We'll show you how to create a solid business plan that details everything from your target market and company description to your sales channels and marketing strategy.
An ecommerce business plan is a valuable asset that can help you avoid the common pitfalls of online retail.
From selecting the perfect target market for your products and services to nailing down which marketing channels to utilize, starting an ecommerce business involves plenty of considerations.
We'll walk you through what you need to know to create an ecommerce business plan to help you achieve long-term success.
Few of us would select a random destination we'd like to travel to, hop in the car without knowing how to get there, and hope for the best. Yet plenty of would-be ecommerce business owners fall prey to the same mentality when attempting to start an online store.
Don't let it happen to you! We'll walk you through everything you need to consider when mapping out ecommerce business plans designed to chart your route to success as an online business owner.
While you'll usually find the executive summary on the first 1 -3 pages of an ecommerce business plan template, don't feel pressured to nail it on the first draft. Some people even wait until after filling in the other sections to come back and draft an executive summary.
An executive summary is a collection of highlights from your business plan. It will include an overview of things like:
Your mission statement.
The products or services your ecommerce company plans to sell online.
An overview of your target market (who your products and services are designed for).
Your market research and competitive analysis.
Any unique market gaps your business idea is designed to fill.
An overview of your business model, including a logistics and operations plan.
The sales and marketing channels you plan to utilize.
The short and long-term business goals you hope to achieve.
If you create a formal business plan to attract potential investors, you'll also want to include information on your funding requirements. Additionally, ensure you introduce your management team or business partners if you have them.
A company overview is all about the business aspects of your ecommerce store. This is where you'll get incredibly specific about exactly how your ecommerce business will work by nailing down several key considerations.
What do you plan to call your online business? Try to come up with a business name that's catchy, memorable, and relevant to your target audience.
What type of products and services do you plan to sell, and to whom? What are the defining characteristics of the potential customers who make up your target market?
What will give your company a competitive advantage over other ecommerce companies and brick-and-mortar business competitors? Taking the time to find a unique selling proposition can be one of the key elements to success.
If you haven't already, this is where you'll develop a mission statement that summarizes why your business idea is an awesome one. Explain your company's purpose, goals, and values briefly and concisely.
Feeling stuck? Wix has a great collection of example mission statements from real companies to help give your creative gears churning.
At this point in your business plan, take some time to think about the type of values that are important to you and your company. At Gelato, for example, sustainably is at the heart of everything we do.
Throughout our business plan, we explored ways to make the print on demand (POD) business model more environmentally friendly for creators and entrepreneurs worldwide. What are your values, and how will you work them into your business model?
Now it's time to think about your business structure and model. If you plan to make a significant income from your online store, you may want to set up shop as an LLC or S-corp for tax purposes.
Do you plan to go it alone or hire employees to help? If you intend to hire employees, you'll definitely want to look into registering as a business, which you can do online through companies like IncFile or ZenBusiness .
Now it's time to get into the product section of your ecommerce business plan. This is where you'll describe what type of products and services you intend to offer.
Do you want to sell custom t-shirts or turn your original artwork into wall art or custom phone cases ? Consider the type of products trending among your target audience and start to think about the price points at which you'll offer them.
Taking the time to get to know your target audience will provide essential clues for success when it comes to everything from product selection to marketing strategies. Conduct market research into a few key areas to get to know your ideal customer and your direct and indirect competitors.
Your target market, aka "target audience," is simply the type of people most likely to be interested in your product. They generally share specific traits such as age, life stage, occupation, interests, common challenges, or other demographics.
For example, if you decided to sell performance tank tops , your target audience might be "female athletes who live in warmer climates." If your shop focused more on "urban-dwelling parents who care about the environment," you might choose to offer custom organic t-shirts for kids instead.
A buyer persona is a fictional representation of your ideal customer that you develop to help you get to know them better. For instance, say you created a persona called "Jan the yoga fan" who was in her mid-20s, lived in an urban environment, and cared about doing eco-friendly shopping.
By targeting this persona, you might offer products like reusable water bottles , custom tote bags that Jan could use for shopping or even 100% biodegradable phone cases . Hubspot has a great persona creator that you can use for free!
Now it's time to do a little competitive analysis to determine who you're against! Conducting a competitive analysis involves studying other businesses that sell products similar to your own to get an idea of what they're selling, at what prices, and how they're attracting customers.
By studying everything from their marketing strategy to their product, you'll be able to analyze what's working and what isn't. This can give you valuable insights into everything from potential gaps you may be able to fill to what is and isn't working among your shared target market.
If there's one section you don't want to skip when writing a business plan, it's this one. No matter how much better your product is than your competition's, it's unlikely to matter if potential customers have never heard of you.
Marketing efforts are incredibly important when it comes to getting the word out about your business. A marketing plan includes a detailed summary of all the marketing strategies you plan to use to reach your audience and may include ideas like:
Conducting organic and paid social media marketing campaigns using software like SproutSocial or HootSuite .
Collecting emails to set up a newsletter or email marketing strategy with tools like ConstantContact or MailChimp .
Using your own blog or webpage for content marketing.
Using search engine optimization ( SEO ) to rank higher in search engine results.
Learning to use free tools like Google Analytics or Google Trends to measure the results of your marketing plan and conduct market analysis.
Your ecommerce business plan should also detail your sales strategy, such as whether you plan to offer subscriptions or operate on a traditional sales model. Equally important is deciding where you're going to set up shop.
Do you plan to start an ecommerce business on an online marketplace like Etsy or build your ecommerce site using tools like Shopify or WooCommerce ? Take the time to research here, as each approach comes with its own business and financial considerations.
Now comes one of the most potentially tricky parts of starting an online business - figuring out how to source materials, fulfill orders, and deliver them to your customers. Do you and your staff plan to handle all business operations and shipping aspects, or do you plan to work with a print on demand service like Gelato?
In case you're unfamiliar, print on demand is a business model that involves partnering with a reputable POD provider like Gelato. After you sign up for a free Gelato account , you simply upload your custom designs and let us know which of our high-quality products you'd like to feature.
Use one of our easy integrations to connect your Gelato account to your online store, and when a customer makes an order, we'll handle everything from order fulfillment to delivery. POD can be a cost-effective way to launch an ecommerce business without ever having to worry about managing inventory, dealing with shipping, or investing in pricey product creation tools.
Now that you've got a better idea of your ecommerce business plan, it's time to make a financial plan. This is where you'll take into account everything from the cost of your company's digital storefront and marketing plan to any overhead costs or POD service charges.
By outlining realistic costs and financial projections, you'll avoid surprises on your income statement down the line. While it tends to cost much less to launch an ecommerce business than a traditional retail store, it's vital to ensure you can factor your overhead costs into your retail prices.
Creating your business plan is the first step in becoming a successful online retailer. Want to launch a competitive online store with minimal startup costs?
Learn more about how partnering with Gelato can help you make your business plans a reality. We make it possible for creators everywhere to launch their own online business without ever having to buy any materials until a product is already sold.
How profitable is an ecommerce business.
While market research indicates that ecommerce will make up 24% of all retail sales by 2026, how much profit each retailer can make is a little trickier to nail down. Much like traditional businesses, the profit margins of individual sellers can vary widely.
How much money you're able to make from your ecommerce business will largely depend on everything from your business plan to your marketing strategy. That's why developing detailed ecommerce business plans is important before launching your online business.
While there are no rules that say you must create a business strategy before launching an ecommerce business, it will make your life a lot easier. Making important decisions in the early stages will save you a great deal of time and money, not to mention help you dodge potentially costly mistakes.
There are now several great templates out there that can help guide you through creating your own ecommerce business plan. Hubspot offers a great one, and Canva has a wide variety of choices if you're looking for something snazzy.
If you’ve got an exciting concept for an e-commerce venture, it’s crucial to develop a business plan tailored to your online store. This plan will play a pivotal role in ensuring that your vision has the necessary resources to thrive and generate profits. By crafting a comprehensive business plan for your online retail operation, you can effectively pinpoint your target audience, set clear monthly and quarterly sales targets, and significantly enhance the prospects of achieving long-term success in the e-commerce industry.
As a business plan writer and consultant , I’ve authored over 15,000 business plans for various enterprises, many of which have gone on to achieve substantial growth and success. In this article, I offer insights based on my experience and expertise in creating an e-commerce business plan.
An ecommerce business plan is a comprehensive document that outlines the goals, strategies, and financial projections of an online business. It serves as a roadmap for the business, guiding entrepreneurs in making informed decisions and attracting investors.
An executive summary serves as a succinct, one-to-two-page overview of your business, meticulously crafted to inform stakeholders about the essential elements of your comprehensive business plan. It’s a window into your business’s aspirations, strategies, and financial projections, providing a clear roadmap for decision-making and attracting potential investors.
An ecommerce business plan executive summary can look something like this:
Here’s a complete guide on how to write an effective executive summary with examples.
Business overview section beckons for meticulous attention to detail, as it showcases the very essence of your business – your product or service. It’s the stage upon which your offering takes center stage, captivating the audience with its unique value proposition and compelling features. Begin by painting a vivid overview of what you’re bringing to the market, piquing the interest of potential customers and investors alike.
A business overview of Pet Planet online store may look something like this:
Here are 14 profitable eCommerce business ideas you can start today!
Having established the foundation of your business and its purpose, it’s time to embark on a deeper exploration of your plan. The spotlight now falls upon the products and services that will form the cornerstone of your venture. Begin by meticulously listing each offering, accompanied by a clear explanation of its purpose. Address the fundamental question of ‘why’ – why have you chosen to offer these specific products and services ? What unique value do they bring to the market?
Once the products and services have been comprehensively described, it’s time to illuminate the pricing model that will govern your offerings. Assign a clear cost to each service, considering factors such as production costs, market demand, and competitive pricing. Determining pricing, especially for a startup, can be a complex endeavor. Fortunately, sales pricing calculators can serve as valuable allies in identifying the optimal pricing strategy .
A explain your offerings of smart home products may look something like this:
For your E-store business, download this ecommerce business plan template now.
A comprehensive market analysis serves as a compass, guiding your business through the intricate terrain of the marketplace. It begins with a deep understanding of your target audience, delving into their demographics, preferences, and purchasing behaviors. This knowledge empowers you to tailor your products, services, and marketing strategies to resonate with their needs and aspirations.
Here is how analyze the market in our ecommerce business plan.
How to Write Products and Services Section of Business Plan
You have a great business idea. We can help you turn it into a perfect business plan..
An ecommerce business’s marketing plan is its secret weapon, guiding it towards brand awareness, target audience reach , and enhanced sales and revenue. This plan revolves around positioning strategy, acquisition channels, and tools and technology. Positioning strategy determines how you will differentiate yourself in the market, while acquisition channels identify how your target audience discovers your business.
Finally, tools and technology harness the power of innovation to enhance your reach, automate tasks, and gain valuable insights into customer behavior. By crafting and implementing a comprehensive marketing plan , you can effectively build brand awareness, attract your target audience, and drive growth and profitability for your ecommerce venture.
How to Write the Marketing Plan in Ecommerce Business Plan?
Importance of an ecommerce business plan.
The significance of an ecommerce business plan cannot be overstated. It plays a pivotal role in:
Revenue projections can be determined by conducting market research, analyzing industry trends, evaluating your target market size, and considering your pricing strategy. Additionally, factors such as marketing efforts, customer acquisition rates, and competition should be taken into account.
Managing operating expenses effectively involves careful budgeting, identifying cost-saving opportunities, negotiating with suppliers, optimizing operational processes, and regularly reviewing expenses. It’s important to strike a balance between controlling costs without compromising the quality of your products or services.
Funding options for an eCommerce business may include self-funding, loans from financial institutions, angel investors, venture capital, crowdfunding platforms, or partnerships. Consider your business’s financial needs, growth plans, and potential risks when exploring funding options.
The break-even point is the point at which your total revenue matches your total expenses, resulting in neither profit nor loss. It can be calculated by dividing your fixed costs by the contribution margin (selling price per unit minus variable costs per unit). This calculation helps you determine the minimum sales volume required to cover costs.
Tracking CAC and CLV is crucial for understanding the effectiveness of your marketing and sales efforts. CAC helps determine the cost of acquiring a new customer, while CLV estimates the value a customer brings to your business over their lifetime. By analyzing these metrics, you can optimize your marketing strategies and ensure that the cost of acquiring customers aligns with their long-term value.
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Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.
As E-commerce continues to accelerate, so does the problem of merchants and manufacturers needing to process returns. The average rate of returns for Internet-based companies is 9%. In the coming year the value of returned merchandise was $1.5 billion. Every one of these transactions involves financial processing. Many of them require physical shipping of physical goods, plus processing the goods as received. This is a huge hassle.
NoHassleReturn.com strives to position itself as a strategic partnership between online merchants, Web hosting companies and portals, shipping companies, and online payment agents such as credit card issuers. Due to demand aggregation, the strategy will produce reduced or totally free shipping of returned merchandise to consumers. This differentiating element will multiply the consumer acceptance factor and will draw more revenues to all participating companies. The proposed program is therefore a win-win solution to all parties involved. Moreover, the software architecture and website format will be wireless-friendly thus designing the service in such a way that consumers will later be able to easily use it via cellular phones and other personal wireless devices
E-commerce continues to accelerate and the amount of money spent on purchases made through the Internet shows no sign of decline. During the past holiday season (November 20 to December 19), retailers saw online revenues quadruple, jumping 300% to about $11 billion and far exceeding expectations, according to a study by Shop.org and Boston Consulting Group. The study of 30 retailers in such categories as apparel, books and music, home and garden, specialty foods and electronics showed a 270% growth in the number of orders. The study indicated that online sales were growing at 145% annually and it projected online retailer revenues of more than $36 billion for last year. An earlier study conducted by Ernst & Young, before the holiday frenzy, already estimated that total revenues for online retail and consumer products for the calendar year just completed were around $25-30 billion. Currently, the average rate of returns for Internet-based companies is 9%. In the coming year the value of returned merchandise was $1.5 billion. This indicates an amazing opportunity.
The company foresees three types of competition for the services we offer: Direct
If we prove successful, others will follow. Our most worrisome competition would be combining delivery and/or courier services, like something of this type owned or partnered with UPS or FEDEX.
The first competitors to the new service are the online retailers themselves. Since NoHassleReturn.com will need to strike partnerships and strategic agreements with retailers in order to offer its services, they are classified as internal competitors.
With NoHassleReturn.com, at least one selling opportunity will be given to retailers while consumer is on the Web–something a partnership with a carrier cannot provide. Moreover, serving as a demand aggregator NoHassleReturn.com should be able to arrange necessary agreements and provide consumers with greatly reduced, or even free, shipping for all returned merchandise.
Thinking in reverse to the previous paragraph, service providers such as Mail Boxes Etc. and PostNet may try to forge strategic partnerships with numerous online retailers to simplify the return process.
Our mission is to enhance customer service of online merchants, boost their customer retention and increase their sales. We strive to improve the overall image of the online merchant and therefore stimulate growth of online shopping. We put our efforts to increase customer satisfaction when consumers deal with retailers, to enhance the interaction process when retailers communicate with consumers, and to streamline the problem resolution order in all possible ways.
NoHassleReturn.com’s financials are conservative yet quite promising. Once they are up and running and sign up some merchants as customers, NoHassleReturn.com will quickly gain momentum and generate impressive sales.
Financing needed.
We need $50,000 to start. We will get that from the two owners to start $25,000 each.
Problem worth solving, our solution.
NoHassleReturn.com is an e-commerce start-up company positioning itself to become the market leader in offering online merchants and consumers a uniform and trouble-free way to return merchandise purchased online. The company offers a business-to-business solution to online merchants of physical, non-perishable products. The company utilizes a consolidation approach in handling all product returns that allows online merchants to instantly save bad sales, restore customer satisfaction and stimulate repeat sales, while offering consumers a convenient, centralized online location to claim returns. By creating a new service category and utilizing the first-mover advantage, NoHassleReturn.com positions itself for rapid growth and gains a strong opportunity to raise entry barriers for possible competition.
Market size & segments.
E-commerce continues to accelerate and the amount of money spent on purchases made through the Internet shows no sign of decline. During the holiday season (November 20 to December 19), retailers saw online revenues quadruple, jumping 300% to about $11 billion and far exceeding expectations, according to a study by Shop.org and Boston Consulting Group. The study of 30 retailers in such categories as apparel, books and music, home and garden, specialty foods and electronics showed a 270% growth in the number of orders. The study indicated that online sales were growing at 145% annually and it projected online retailer revenues of more than $36 billion for 1999. An earlier study conducted by Ernst & Young, before the holiday frenzy, already estimated that total revenues for online retail and consumer products for the calendar year 1999 were around $25-30 billion.
While a notable amount of positive publicity about the Internet shopping has recently appeared in the media, the number of problems encountered by online shoppers actually increased more dramatically than the sales figures. According to a poll conducted by WebAssured.com, the number of complaints filed between November 25, 1999 and January 13, 2000 was up 404% over the same period last year. Over 62% of the respondents claimed they had experienced at least one problem with an online transaction. Misrepresentation/misinformation and delivering defective products each accounted for at least 22% of all complaints. In the breakdown of types of problems occurred, delivery of a wrong item accounted for 17.2%. These kind of problems ultimately result in product returns that cause additional costs to the consumers and both costs and lost revenues to the retailers.
When a wrong, defective, or misrepresented item was delivered to a consumer, the return process often proved uneasy. According to recent findings by PC Data Online, 30% of all consumers who returned items found the return process difficult. It is apparent that existing return procedures are inadequate and sometimes irritating. The solution, however, does not lie in forcing all online retailers to establish a "no-questions-asked" return policy and to post it clearly at the top of their websites. The entire sequence a consumer has to follow, starting from looking up the procedures on the Web and then having to make a trip to UPS or the Post Office, has to be streamlined. There is clearly a need, as well as an opportunity, for a new service company to improve the overall return process for online shoppers. As a result, the consumer satisfaction will be enhanced and it will translate into increased repeat sales for online retailers.
Market Segmentation
As stated in the previous section, the estimated online retail revenues were around $25-36 billion. Both sources providing the estimates indicated that only merchants selling physical products (books, CDs, electronics, apparel, etc.) were included in the breakdown by category. No mention was made of services such as online hotel reservations, news subscriptions, or online brokerage being included in the total figures. However, it would be advisable to use a more conservative approach when estimating the total revenues of online merchandise sales. Presented below are estimates for Internet retail sales made by National Retail Federation shortly after the 1998 holiday season.
Current alternatives.
Direct Competitors
Based on the current intelligence, there is no independent company out there specializing in a "returned merchandise" service to online consumers. No single company is known to be employing a concept of establishing a single point of presence on the Internet for consumers to claim returns. The current situation allows the new company to gain the first-mover advantage and build entry barriers for any possible new entrants.
Internal Competitors
The first competitors to the new service are the online retailers themselves. Since NoHassleReturn.com will need to strike partnerships and strategic agreements with retailers in order to offer its services, they are classified as internal competitors. Retailers may perceive that their internal return procedures are adequate and fully meet customer demands. However, the discussion under the Need Assessment section of this plan clearly indicated that there are significant drawbacks and shortcomings in the return process across the entire industry. Even companies like Amazon.com that touts a quick and easy return policy now sees its customers go to Barnes & Noble superstores to return books. Partnering with brick-and-mortar retailers may be seen as a solution by some e-tailers. However, from the consumer perspective, there still will not be a centralized location to return merchandise, no quick and easy return procedure, and no savings on shipping costs. Consumers may end up having to go from one physical retailer to another to return various items.
Online retailers may try to partner with carriers and service providers such as UPS, Mail Boxes Etc., or Rite Express. Reportedly, eBay.com is working out an agreement with Mail Boxes Etc. to appoint them as a preferred/exclusive service for product returns. eBay.com may receive rebates per shipment for directing its clients to Mail Boxes Etc., but consumers again will have little or no benefit. The standard shipping rates are applied, the choice of carriers is now limited, and online merchants are not informed about product returns ahead of time so that bad sales could be saved. With NoHassleReturn.com, at least one selling opportunity will be given to retailers while consumer is on the Web–something a partnership with a carrier cannot provide. Moreover, serving as a demand aggregator NoHassleReturn.com should be able to arrange necessary agreements and provide consumers with greatly reduced, or even free, shipping for all returned merchandise.
Channel Competitors
Thinking in reverse to the previous paragraph, service providers such as Mail Boxes Etc. and PostNet may try to forge strategic partnerships with numerous online retailers to simplify the return process. But as it was described, online retailers will be shortchanged in overall customer satisfaction, information exchange, total costs, and additional selling opportunities. Consumers, on the other hand, will lose out on the limited number of "exclusive" carriers for particular retailers, and uniform simplicity in the return process will not be achieved. Moreover, both Mail Boxes Etc. and PostNet combined do not have sufficient physical presence in the market.
Carriers such as UPS and FedEx may try to enter the arena. Those organizations have extensive networks of facilities, experience in shipping, and a track record of quality. The U.S. Postal Service has recently started a TV advertising campaign of a service for online merchants that allows consumers to print return labels online. This is a step towards addressing the shipping end of the return problem, but it falls short of saving bad sales and creating new selling opportunities for merchants. No single shipping company can fully provide the range of benefits the proposed company can. NoHassleReturn.com will be able to arrange strategic alliances with numerous carriers and even play one against the other in negotiating rate reductions and preferential service terms for both merchants and consumers. Being a smaller company with a focus on the e-commerce community, it will also have a greater degree of flexibility in adjusting to customer needs.
At NoHassleReturn.com, we feel we provide a value-added service to a variety of consumers. By having a safe and easy-to-use return service, the company benefits more people than simply the average customer.
Merchants Advantages
Consumers Advantages
In order for the company to operate, a number of specific ingredients are needed. Following are things to put in place before the service can be offered.
Marketing plan.
Because the company’s service is a business-to-business program, it will be initially promoted to online merchants by direct sales force. Personal selling will be necessary to reach decision makers within online organizations. At first, contacts will be made with Internet service providers, such as America Online, that host online stores and shops. America Online claims to have 20% of the total Internet service provider market in the U.S. Therefore, arranging a strategic partnership where NoHassleReturn.com becomes the preferred or exclusive choice for all returned merchandise bought at AOL.com shops will be invaluable for establishing a well-recognized brand and building up entry barriers for any possible competition. Ideally, a company’s banner with a notation "For an Easy, Trouble-Free Product Return Click Here" will be visibly displayed throughout the shopping section of AOL.com. Portals such as Yahoo! will be approached as well. Reportedly, Yahoo! hosts nearly 6,000 merchants where it charges each merchant at least $100 to $300 per month. Arranging a strategic partnership with Yahoo! will provide a strong leverage in negotiating return contracts with individual merchants. Similar to that of America Online, the company’s banner will be displayed throughout the entire shopping section of Yahoo!
Large online merchants such as Amazon.com and Buy.com will be targeted by the direct sales force during the first stage as well. Those companies have already achieved significant volumes of sales–and therefore product returns–and will find the uniform return process of much benefit to them. Strong "category killers" such as eToys and CDnow are also first sales targets. Auction houses such as eBay.com and uBid.com will be approached with a service offer for products sold to consumers by merchants and direct manufacturers.
Wherever possible, smaller online retailers will be personally approached by the sales force. To stimulate awareness and service penetration among smaller players, industrial marketing techniques will be utilized. Those will include advertising in specialized publications such as Internet World and Red Herring, as well as referral fees for retailers who already use the service. Email campaigns will be used to reach decision makers at smaller companies. The email messages will have an invitation to the NoHassleReturn.com website where a specially designed presentation will explain the benefits of the new service. An invitation to be contacted by a service consultant to discuss details will be included.
The company plans to offer its services right before Thanksgiving 2000. In order to stimulate a quicker adoption of the services, the remainder of the year 2000 will be offered free of charge.
It is estimated that the initial expenses to hire a sales force and a customer service unit of up to five people during the first year will be close to $400,000. Another $200,000 will be needed for sales program development, marketing activities, and training (excludes advertising). The initial compensation package for sales force will include a nominal base salary and a progressive commission structure. This should ensure that during the early stage of the company’s growth not only that sales targets are met, but also that customer (customer here means merchant) satisfaction and retention are fully addressed. The sales force will initially be located at the corporate headquarters. A territorial approach will later be implemented, with sales people located in regions. After one year, sales force members will split into two distinct groups. The first group will include pure sales people, the "go-getters" who will be placed in regions and will work on pure commissions. The commission structure will become more progressive and rewarding for such individuals, including a bonus structure. The estimate for an average commission paid on sales is approximately 5-10%. The second group will include client care professionals who will concentrate on customer satisfaction and retention to ensure the continuity of the program. These individuals will remain at the headquarters and will have a base salary with a bonus structure. The base salary for client care professionals is in the mid-five figures. Industrial advertising and promotional expenses in 2000 are estimated at $250,000.
It is also a possibility to sell the services to merchants via the Internet hosting service providers, portals, and software developers. Those companies will then serve as distributors and agents, compensated on commissions. This approach will eliminate the need for a large sales force. The final layout will depend on how quickly agreements with companies such as America Online and Amazon.com are negotiated, how aggressively they will be able to promote the services, and on what conditions.
The following diagram describes the customer approach (customer here means merchant).
Service consultants are the direct sales force that approaches prospective customers with service offers. Once a customer has been signed, a service consultant will only approach the client with new service offers and product upgrades. A client care professional is then assigned to each customer to deal with all customer service issues. Each customer will be advised to direct all service inquiries to the professional. A professional will also proactively call on customers to ensure high quality of service and customer satisfaction. The consultants and professionals will have direct communication lines between themselves to ensure open information exchange and a quick and efficient problem-resolution culture. This structure will guarantee an aggressive sales approach, client-oriented service, and efficient post-sales support.
NoHassleReturn.com will strive to eliminate the shipping costs to consumers by means of strategic agreements with online merchants, shipping companies, and credit card companies. As stated in the last quote, 58% of all product returns were due to merchants’ faults, hence merchants will have to reimburse shipping costs to consumers in those cases. NoHassleReturn.com therefore proposes that 65% of a given shipping cost should be allocated to corresponding merchants. Due to demand aggregation, the company will be able to negotiate a shipping rate discount with companies such as UPS or FedEx. Hence 20% of shipping costs should be allocated to shipping companies in a form of a discount. Credit card issuers such as Chase and BancOne currently offer a 5% rebate to consumers on purchases with selected online merchants. It is therefore feasible to arrange an agreement with credit card companies and/or issuers to include a 5% shipping cost rebate on all returned merchandise. Since product returns are only 9% of all purchases, it will not represent a large cost to credit card companies to add this differentiating feature to their products. These allocations in total will cover 90% of the shipping cost. The remaining 10% will be absorbed by NoHassleReturn.com via a special "instant rebate."
NoHassleReturn.com will charge merchants a program fee that will average only 0.5% of a given merchant’s total sales. Also, the company will charge a low per-claim fee of 12% of each item’s listed price (each item that has been claimed through the company’s website). However, of the 12% charged per item, up to 4% will be instantly given back to merchants to cover the remaining portion of the shipping cost. The previous table indicates that the 4% rebate is sufficient to cover the remainder of the shipping cost in the first product category. It is actually far more than sufficient in other product categories (refer to ASC Coverage Ratio). NoHassleReturn.com can then decide whether to offer merchants a reimbursement of the remaining portion of shipping costs only or a flat 4% "instant rebate" regardless of shipping costs. For the purpose of this business plan and financial projections, a flat 4% "instant rebate" was used thus reducing the per-claim fee from 12% to 8% across the board.
As it was stated in a prior chapter, retailers should see an average sales increase of at least 15% due to the service offered by the company. On the other hand, based on the proposed pricing structure the service should not cost merchants more than 1.5% of their total revenues. The cost-benefit ratio of 10 will be a strong promotional point for NoHassleReturn.com.
While it is a possibility to charge merchants commissions on all sales made through the company’s website (when consumers claim their returns), it would not capture all sales stimulated by the company. The program will increase consumer satisfaction and loyalty. However, when consumers start buying more due to the program’s effect but dealing directly with the merchant, the company will not receive any commissions and will in effect be giving its services away for free. Hence both fees charged should fully reflect the benefits of the easy-return procedure, early information on all returning items, restored customer satisfaction, selling opportunities created during the claim process, and all repeat sales thereafter.
The company also plans to draw revenues from advertising on its website, but for the purpose of this business plan advertising revenues will be considered negligible. A fee/rebate agreement may be arranged with such companies as UPS and Mail Boxes Etc. for bringing customers to them for shipping needs. Other revenue generating activities such as affiliate programs with VISA, American Express, or Citibank can be arranged to promote certain credit cards as a preferred method of payment online. Those revenues will also be omitted in the financial projections. Once the company has generated a sufficient customer database, it may also market information to retailers and other organizations for a fee. Any fees and payments NoHassleReturn.com could generate from consulting activities in the field of product returns will not be included in the financial projections either.
The service positioning in the eyes of online merchants is imperative to the success of the enterprise. The service proposed by the company is a business-to-business solution offered to online merchants of physical, non-perishable products. However, because online consumers will deal directly with the company via its website, the proposed solution also incorporates some features of a business-to-consumer service. It is therefore of utmost importance to clearly define what this company offers is a customer service & customer satisfaction program for online merchants. The most unique feature is that the proposed company takes the systemic problem of product returns and turns it into new selling opportunities for online merchants.
It is also important to note that NoHassleReturn.com does not try to position itself as a competitor to any incumbents with a similar service, online merchants, or shipping companies. The proposed company strives to position itself as a strategic partner to all parties participating in handling product returns. If nothing else, NoHassleReturn.com should be viewed as an outsourcing company to online merchants with the core competency and focus in handling returned merchandise.
The service offered by NoHassleReturn.com is designed to enhance customer retention and loyalty by offering an easy and trouble-free merchandise return process to online shoppers. According to Jupiter Communications, the goal of the 1999 holiday season was not about generating impressive sales, but rather securing long-term relationships. Retailers now need to focus on retention and loyalty. NoHassleReturn.com will help to achieve just that through establishing lasting, productive relationships with online merchants. Providing an easy, uniform, and trouble-free return process to all online shoppers will enhance the overall image of online merchants. While the number of retailers continues to grow, consumers will not have to look up every single one to find out about return policies and later keep abreast for possible changes. A centralized Internet location–the company’s website–will retrieve, summarize, and present the appropriate policies. Based on product information, it will make sure the correct procedures are used. The company’s banner with a notation "For an Easy, Trouble-Free Product Return Click Here" will be placed visibly on retailers’ websites and will serve as a symbol of customer orientation and care.
Moreover, the shipping process will be streamlined. Customers will be able to generate a shipping label on the company’s website thus reducing the hassle at the shipper’s counter. Although some online retailers already supply pre-printed shipping labels for sold items, customers sometimes lose, or throw away, those labels when they first see and like the products they ordered. Shortly after they may change their mind and would like to return a particular item, but the label is gone. With the proposed program, the label is always available online so that consumers can have peace of mind and also reduce the amount of documents they need to keep just in case. The service therefore offers a dual benefit to consumers. The retailers may then choose to stop including a pre-printed return label with every outgoing shipment thus reducing costs of selling. From a shipping company’s perspective, the shipping process is streamlined because the online-generated label will have all the necessary information, possibly including a tracking number if it is going to be shipped by UPS. That way consumers do not have to spend time at UPS counters filling out forms–both a customer service and operations improvement for UPS. NoHassleReturn.com will be a strategic merger between online merchants, carriers, and their partners targeted at overall improvement of customer satisfaction and ultimately the bottom line of merchants.
Another important feature of NoHassleReturn.com is that shipping of returned merchandise should be free of charge to consumers. (Means of achieving it are discussed in more detail in the Pricing and Revenue Generation section.) This differentiating feature will tremendously increase the consumer acceptance factor of the proposed service. The fact that products purchased online can be returned in an easy and trouble-free way, and that shipping is also free, will help expand the entire online shopping industry. The added convenience and peace of mind consumers will gain with NoHassleReturn.com will translate into more shopping with those online merchants that participate in the NoHassleReturn.com program.
When customers go through the sequence of online entries on the company’s website, the retailer whose product is being claimed for return will be offered at least one selling opportunity. At the end of the sequence the retailer will be able to target the consumer with any new sales offers as its website will appear onscreen. Should an exchange or replacement be preferred by the customer during the online return process, the retailer will receive an additional selling opportunity as its website will appear with offers during that step. These opportunities will translate into more sales for retailers. This will also stimulate customer retention, which means repeat sales. All in all, the program will increase customer satisfaction and generate more sales.
The program has a number of unique features. First, it alerts the retailer that a particular customer is claiming a particular product for return as it happens. That way the retailer knows about it as it occurs and not when the merchandise arrives at its warehouse. This allows to plan ahead. Since 9% of all products are returned, this feature offers useful information to better handle logistics and inventory.
Secondly, and more importantly, by asking consumers during the online sequence why they want to return a particular item merchants gain an invaluable piece of information. If the reason for return is defective product (30% of all reported returns), the retailer can save the sale and turn an unhappy customer into a delighted one by sending a new item right away. If the reason for return is wrong color, wrong size, or wrong product altogether (28% of all reported returns), the retailer may choose to send the correct product right then, thus instantly restoring customer satisfaction and saving a bad sale. It will be up to the retailer to decide on payment and credit terms of the exchange. These benefits ultimately translate into increased customer retention, reduced costs, more sales, and improved bottom line.
It is estimated that the program will generate an average sales increase for merchants of at least 15%. Online shopping is still at the early stage of consumer adoption. As stated earlier, about half the people who have not shopped online cited the cost and hassle of returns as a significant factor for not shopping online. Another recent survey found that 89% of online buyers said that return policies influenced their decision to shop with an online retailer. Consumers demand not only convenience but peace of mind. The proposed program offers both and it should increase the number of online shoppers, thus causing a market expansion for online merchants. The first retailers who implement the proposed program will also be able to differentiate themselves and capture a larger market share in their respective segments. Once embraced by the majority of online merchants, the program will become an industry standard.
It is important to note that during the entire process the company will not ask for, or try to gain access to, consumers’ credit card numbers. This will significantly limit possible liabilities and security/confidentiality concerns.
Milestones table.
Milestone | Due Date | Who’s Responsible | |
---|---|---|---|
Nov 15, 2020 | Founders | ||
Jan 27, 2021 | Founders | ||
June 15, 2021 | Founders | ||
June 21, 2021 | Founders | ||
Sept 13, 2021 | Founders | ||
Jan 17, 2022 | Founders |
Our Key Metrics:
Those activities that are not crucial to the corporate success (i.e. payroll) will be outsourced or subcontracted. Below are brief summaries of major responsibilities for corporate officers.
There are two principals that are responsible for the idea and the progress of the firm up. They recognize as the companies quickly grows, certain positions such as CEO and CFO will need to be filled. The company was founded by Steve Logic and Dan Codder. Steve has spent the last ten years at Federal Express. While at FedEx, Steve was responsible for their logistics system. Steve has the incredible skill of perceiving business needs and creating a solution to address the need. At FedEx, Steve was the architect behind their benchmarked logistic system that has the ability to track customer packages and share the information with the client. What this meant for FedEx is that they could tell the customer exactly where their package is at any one point. This logistics system is the main driver behind FedEx’s exponential growth. Dan Codder is a twenty-year veteran in the computer industry. Self taught, Dan has worked at IBM, Cadence, Tektronix, and several other companies. Dan has the ability to design and write computer code very quickly and accurately. NoHassleReturn.com will leverage Dan’s skills for the completion of their customer service software engine.
2020 | 2021 | 2022 | |
---|---|---|---|
Part-Time Disassembly Crew (4.67) | $159,600 | $162,792 | |
Directors (5) | $180,000 | $325,000 | $490,000 |
Sales Manager (0.67) | $40,800 | $41,616 | |
Sales Group (4) | $216,000 | $220,320 | |
Fulfillment Manager (0.67) | $33,600 | $34,272 | |
Fulfillment Group (4) | $172,800 | $176,256 | |
Marketing manager (0.67) | $42,000 | $42,840 | |
Marketing Group (4) | $216,000 | $220,320 | |
Programmers (4) | $360,000 | $367,200 | |
Programmer Manger (0.67) | $60,000 | $61,200 | |
Social Media Group (2.33) | $327,600 | ||
Social Media Manager (0.33) | $50,400 | ||
Disassembly Team (2.33) | $201,600 | ||
Disassembly Team Manager (0.33) | $34,800 | ||
Website Programmers / Bug Finders (2.33) | $462,000 | ||
Website Programmer Manager (0.33) | $72,000 | ||
Shipping Clerks (2.33) | $218,400 | ||
Shipping Manager (0.33) | $39,600 | ||
Office Admins (2.67) | $288,000 | ||
Totals | $180,000 | $1,625,800 | $3,511,216 |
Key assumptions.
Net profit (or loss) by year, use of funds.
START-UP REQUIREMENTS
Start-up Expenses
Stationery etc. $50
Brochures $450
Insurance $100
Research and development $400
Expensed equipment $1,100
TOTAL START-UP EXPENSES $3,000
The two co-owners will each contribute $25,000, for a total startup of $50,000.
The plan depends on $4.1 million investment in the first month.
2020 | 2021 | 2022 | |
---|---|---|---|
Revenue | $12,012,000 | $37,514,400 | |
Direct Costs | $6,437,760 | $19,702,838 | |
Gross Margin | $5,574,240 | $17,811,562 | |
Gross Margin % | 46% | 47% | |
Operating Expenses | |||
Salaries & Wages | $180,000 | $1,466,200 | $3,348,424 |
Employee Related Expenses | $36,000 | $293,240 | $669,685 |
Sales and marketing | $300,000 | $3,000,000 | $6,000,000 |
Research and Development | $120,000 | $120,000 | $120,000 |
Rent | $240,000 | $240,000 | $240,000 |
Utilities | $60,000 | $60,000 | $60,000 |
Telephone | $28,800 | $28,800 | $28,800 |
Insurance | $144,000 | $144,000 | $144,000 |
Legal | $60,000 | $60,000 | $60,000 |
Equipment Upkeep | $108,000 | $108,000 | $108,000 |
office Supplies | $10,800 | $10,800 | $10,800 |
Total Operating Expenses | $1,287,600 | $5,531,040 | $10,789,709 |
Operating Income | ($1,287,600) | $43,200 | $7,021,853 |
Interest Incurred | |||
Depreciation and Amortization | $309,400 | $369,400 | $369,400 |
Gain or Loss from Sale of Assets | |||
Income Taxes | $0 | $0 | $0 |
Total Expenses | $1,597,000 | $12,338,200 | $30,861,947 |
Net Profit | ($1,597,000) | ($326,200) | $6,652,453 |
Net Profit/Sales | (3%) | 18% |
Starting Balances | 2020 | 2021 | 2022 | |
---|---|---|---|---|
Cash | $1,235,990 | $228,946 | $4,932,050 | |
Accounts Receivable | $1,921,920 | $6,002,304 | ||
Inventory | ||||
Other Current Assets | ||||
Total Current Assets | $1,235,990 | $2,150,866 | $10,934,354 | |
Long-Term Assets | $47,000 | $1,847,000 | $1,847,000 | $1,847,000 |
Accumulated Depreciation | ($309,400) | ($678,800) | ($1,048,200) | |
Total Long-Term Assets | $47,000 | $1,537,600 | $1,168,200 | $798,800 |
Total Assets | $47,000 | $2,773,590 | $3,319,066 | $11,733,154 |
Accounts Payable | $213,590 | $1,085,266 | $2,846,901 | |
Income Taxes Payable | $0 | $0 | $0 | |
Sales Taxes Payable | $0 | $0 | ||
Short-Term Debt | ||||
Prepaid Revenue | ||||
Total Current Liabilities | $213,590 | $1,085,266 | $2,846,901 | |
Long-Term Debt | ||||
Long-Term Liabilities | ||||
Total Liabilities | $213,590 | $1,085,266 | $2,846,901 | |
Paid-In Capital | $50,000 | $4,160,000 | $4,160,000 | $4,160,000 |
Retained Earnings | ($3,000) | ($3,000) | ($1,600,000) | ($1,926,200) |
Earnings | ($1,597,000) | ($326,200) | $6,652,453 | |
Total Owner’s Equity | $47,000 | $2,560,000 | $2,233,800 | $8,886,253 |
Total Liabilities & Equity | $47,000 | $2,773,590 | $3,319,066 | $11,733,154 |
2020 | 2021 | 2022 | |
---|---|---|---|
Net Cash Flow from Operations | |||
Net Profit | ($1,597,000) | ($326,200) | $6,652,453 |
Depreciation & Amortization | $309,400 | $369,400 | $369,400 |
Change in Accounts Receivable | ($1,921,920) | ($4,080,384) | |
Change in Inventory | |||
Change in Accounts Payable | $213,590 | $871,676 | $1,761,635 |
Change in Income Tax Payable | $0 | $0 | $0 |
Change in Sales Tax Payable | $0 | $0 | |
Change in Prepaid Revenue | |||
Net Cash Flow from Operations | ($1,074,010) | ($1,007,044) | $4,703,104 |
Investing & Financing | |||
Assets Purchased or Sold | ($1,800,000) | ||
Net Cash from Investing | ($1,800,000) | ||
Investments Received | $4,110,000 | ||
Dividends & Distributions | |||
Change in Short-Term Debt | |||
Change in Long-Term Debt | |||
Net Cash from Financing | $4,110,000 | ||
Cash at Beginning of Period | $0 | $1,235,990 | $228,946 |
Net Change in Cash | $1,235,990 | ($1,007,044) | $4,703,104 |
Cash at End of Period | $1,235,990 | $228,946 | $4,932,050 |
Fill-in-the-blanks and automatic financials make it easy.
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Ecommerce Unpacked Team Author
Updated: December 7, 2022 11 minute read
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An ecommerce business plan is designed to help you focus on your goals before launching your online store. A cohesive plan can help guide your decision-making process, convince potential investors, and prove the viability of your products or services.
According to the Bureau of Labor Statistics, about 20% of small businesses fail within the first year. Poor planning is often to blame. Without a good roadmap, it’s hard to make good decisions about your products, brand, and customers.
Ready to craft a winning ecommerce business plan? This article will go over each element you’ll need, and how to create it. Plus, we’ve included links to several ecommerce business plan templates at the bottom of the article .
Key takeaways
An ecommerce business plan is a single document containing both your current business strategy for selling online and a roadmap for the future of your business. If you have a management team, they should have a hand in crafting this document, and you’ll likely share it with a wide variety of people, including potential investors.
Harvard Business Review advises that entrepreneurs who write business plans are more likely to succeed than those who do not. That said, a business plan should be a living document. As your business grows and changes, your plan should change, too.
Your business plan should include the following:
Let’s dig into each element so you can start assembling your plan.
An executive summary outlines your business model in succinct and compelling terms. Use it as a summary of the other items in your business plan and focus on the positives. Make sure to use enticing language to help keep your readers engaged.
Your executive summary should answer the following questions:
You can also structure your executive summary by using these general categories:
Most executive summaries fit on a single page. It’s okay to go a little longer if needed, but be sure to keep it lean, concise, and engaging.
This section should include a detailed company description. Think of this as a deep dive into who you are, what you do, and what’s motivating you to launch this online business.
Your business overview should include:
A recent survey by Crayon found that businesses have an average of 25 competitors . In the competitive market analysis section of your business plan, you’ll identify your top competitors and explain why you’re a better choice for your customers.
Consider starting with a SWOT analysis, which examines the following:
A SWOT analysis can help your market research, but don’t stop there. You must also dig deep into indirect competitors and similar products to show that you fully understand why your company is set up to succeed.
This section shows what products and services you offer your target customers.
Get as detailed as you can here. If you’re providing a physical product, explain what it’s made of, how big it is, what makes it useful or unique, how long it takes to make just one, and so on. Make sure to include visuals as well as written information.
If you offer a virtual product, you can use this section to share technical specifications, including the operating system your product needs, how fast it works, what it does, and so on.
If you’re developing new products, include details on this, too. The more informative this section is, the better.
This section shows how you intend to attract customers to your online store once it’s up and running.
There are a range of marketing tactics to consider, including:
Companies tend to spend marketing dollars in predictable ways.
Don’t be afraid to mix up your marketing plan, but make sure to detail why you’ve made each strategic decision, and outline the key performance indicators (KPIs) you plan to use to measure the effectiveness of your marketing efforts.
In this section, you’ll explain your financial projections and liabilities. If you hope to get investors, this is perhaps the most important part of your ecommerce business plan.
In this section, include data about the following:
Include a current income statement and balance sheet, but also create a six-month and 12-month projection.
If you’re using credit cards or business loans to fund your startup, include that data here. And if you’re using the business plan to secure financing, describe how you will use that money.
These are a few key reasons you should put in the time and effort to create a good ecommerce business plan.
To launch and manage a successful business, you’ll make countless decisions quickly. An effective business plan can help you make better-informed decisions, replacing gut feelings with facts and carefully vetted strategies.
For example, you’ll know exactly who your potential customers are. And you’ll know just what marketing tools you plan to use to reach that target audience. When it’s time to launch your marketing campaign, this information can help you save time and avoid costly mistakes.
You think you have a great idea for an ecommerce business. But do you have data that suggests this concept is a winner?
Creating an ecommerce business plan will force you to dive deep into the metrics behind this question. If you emerge confident in your idea, your business plan stands a better chance of convincing others. What’s more, this process can help work out issues that could block your success down the road.
For example: You may believe you’ve hit on a new product your target customers will love. But as you start writing your business plan, you might uncover supply chain issues that could undercut the viability of your business. You can then look for a solution to these issues, or move on in search of another idea. Either way, you’ve avoided a pitfall.
Whether you need investors or a loan to get started, your business plan can serve as a funding application. It will lay out how much money you need, how you’ll spend it, and how you plan to get profitable.
Detailed data can help these others understand why they should help fund your new business.
Below, you’ll find links to several business plan templates. Think of these as examples for inspiration, not as rigid structures to follow.
Keep in mind that your business plan is about your business, not anyone else’s. While these samples can get you started, you’ll need to write your own unique version.
Bplans, a provider of free business plan templates, has a sample business plan for a fictional company called NoHassleReturn.com. It provides an expansive view of how a traditional enterprise organization could shift to an online business model.
Upmetrics.co, a provider of business plan software, created a business plan for a fictional provider of eco-friendly baby supplies. The entire plan comes in at 22 pages, and is packed with data.
Note the financial plan included in this example. The fictional company needs funding, and that ask is detailed in a clear and compelling way. This example also demonstrates how anyone can highlight crucial aspects of an online store, such as funding or staffing.
The Small Business Administration created two business plan models, including the so-called “lean startup format,” which is a good fit for ecommerce companies.
Consider this an ecommerce business plan for entrepreneurs who want to present a high-level summary without digging too deep.
Ecommerce Business Plan Writers designs all sorts of business plan templates. The sample ecommerce business plan for a fictional grocery store caught our eye, as it highlights all of the unique offerings and services this new company might provide.
Dig deep into this business plan, and you’ll see a section connecting buyers to distributors for fast and convenient deliveries. This is a business-to-consumer plan investors might love.
It’s easier and more effective to develop a marketing strategy, cohesive hiring program, and production schedule with an ecommerce business plan. Writing one takes time, but doing it can increase your chances of finding success in the ecommerce world.
Why should i start an ecommerce business.
An ecommerce business often deals with less overhead than a brick-and-mortar store. These businesses also don’t require customers to visit in-person to make a purchase. You can save money on rent, employees, and signage, while your customers benefit from speed and convenience.
The most common ecommerce business models include:
These labels aren’t necessarily exclusive—some companies sell products to businesses as well as consumers.
It depends on the ecommerce model you choose. Creating a business plan is a great place to start. From there, you’ll need to register your business, get the proper permits and licenses, develop your products, launch your online store, and market it.
[1] The True Failure Rate of Small Businesses (Entrepreneur)
[2] 118 Ecommerce Statistics You Need to Know (Similarweb)
[3] When Should Entrepreneurs Write Their Business Plans? (Harvard Business Review)
[4] How to Write an Executive Summary (Inc)
[5] Business Is Becoming More Competitive (DMN)
[6] You Are Doing Your Marketing Wrong (and I Have the Data to Prove It) (Neil Patel)
[7] Top 6 Reasons New Businesses Fail (Investopedia)
Ecommerce Unpacked Team February 24, 2023
Ecommerce Unpacked Team February 23, 2023
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If you have a promising idea for an online e-commerce business , it’s important to create an e-commerce business plan to ensure your vision has enough stock to be profitable.
Having a business plan for your online store will help you define your target market, establish your monthly and quarterly sales goals, and increase the likelihood of long-term e-commerce success.
In this post, we’ll go over an online store business plan and how you can create one for your e-commerce startup. Let’s get started.
An e-commerce business plan is a document that outlines your business and its goals, analyzes your industry and competitors, and identifies the resources needed to execute your plan. It also lists the e-commerce retailers you’ll use to distribute your products and the marketing strategies you’ll use to drive sales.
Whether a company operates as a startup or has years of operations and growth under its belt, an e-commerce business plan is essential for evaluating a business and determining areas of improvement.
An e-commerce business plan is essential, with increasing numbers of shoppers conducting business online. It’s estimated this number has reached over 2 billion . An e-commerce business plan keeps you organized and is useful when seeking investors who need to understand your company.
So, let’s dive into some examples of e-commerce business plans and what goes into writing one using our free template .
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Need support creating your business plan? Check out these business plan examples for inspiration.
Any aspiring entrepreneur researching how to start a business will likely be advised to write a business plan. But few resources provide business plan examples to really guide you through writing one of your own.
Here are some real-world and illustrative business plan examples to help you craft your business plan .
The business plan examples in this article follow this template:
Your executive summary is a page that gives a high-level overview of the rest of your business plan. It’s easiest to save this section for last.
In this free business plan template , the executive summary is four paragraphs and takes a little over half a page:
You might repurpose your company description elsewhere, like on your About page, social media profile pages, or other properties that require a boilerplate description of your small business.
Soap brand ORRIS has a blurb on its About page that could easily be repurposed for the company description section of its business plan.
You can also go more in-depth with your company overview and include the following sections, like in the example for Paw Print Post:
Your mission statement may also make an appearance here. Passionfruit shares its mission statement on its company website, and it would also work well in its example business plan.
The market analysis consists of research about supply and demand, your target demographics, industry trends, and the competitive landscape. You might run a SWOT analysis and include that in your business plan.
Here’s an example SWOT analysis for an online tailored-shirt business:
You’ll also want to do a competitive analysis as part of the market research component of your business plan. This will tell you who you’re up against and give you ideas on how to differentiate your brand. A broad competitive analysis might include:
This section of your business plan describes your offerings—which products and services do you sell to your customers? Here’s an example for Paw Print Post:
It’s always a good idea to develop a marketing plan before you launch your business. Your marketing plan shows how you’ll get the word out about your business, and it’s an essential component of your business plan as well.
The Paw Print Post focuses on four Ps: price, product, promotion, and place. However, you can take a different approach with your marketing plan. Maybe you can pull from your existing marketing strategy , or maybe you break it down by the different marketing channels. Whatever approach you take, your marketing plan should describe how you intend to promote your business and offerings to potential customers.
The Paw Print Post example considered suppliers, production, facilities, equipment, shipping and fulfillment, and inventory.
The financial plan provides a breakdown of sales, revenue, profit, expenses, and other relevant financial metrics related to funding and profiting from your business.
Ecommerce brand Nature’s Candy’s financial plan breaks down predicted revenue, expenses, and net profit in graphs.
It then dives deeper into the financials to include:
You can use this financial plan spreadsheet to build your own financial statements, including income statement, balance sheet, and cash-flow statement.
A one-page business plan is meant to be high level and easy to understand at a glance. You’ll want to include all of the sections, but make sure they’re truncated and summarized:
A startup business plan is for a new business. Typically, these plans are developed and shared to secure outside funding . As such, there’s a bigger focus on the financials, as well as on other sections that determine viability of your business idea—market research, for example.
Your internal business plan is meant to keep your team on the same page and aligned toward the same goal.
A strategic, or growth, business plan is a bigger picture, more-long-term look at your business. As such, the forecasts tend to look further into the future, and growth and revenue goals may be higher. Essentially, you want to use all the sections you would in a normal business plan and build upon each.
Your feasibility business plan is sort of a pre-business plan—many refer to it as simply a feasibility study. This plan essentially lays the groundwork and validates that it’s worth the effort to make a full business plan for your idea. As such, it’s mostly centered around research.
Building a good business plan serves as a roadmap you can use for your ecommerce business at launch and as you reach each of your business goals. Business plans create accountability for entrepreneurs and synergy among teams, regardless of your business model .
Kickstart your ecommerce business and set yourself up for success with an intentional business planning process—and with the sample business plans above to guide your own path.
How do i write a simple business plan, what is the best format to write a business plan, what are the 4 key elements of a business plan.
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A business plan is a blueprint for your business. It sets out where you want to go and how you want to get there.
While you might want to jump right into your ecommerce business and start selling, starting with a business plan is the foundation of a thriving business. Harvard Business Review found businesses that take the time to draft a business plan increase their odds at succeeding by 16 percent. And one study by McKinsey & Company found that 79 percent of executives believe a formal planning process contributes significantly to overall business strategies.
Business plans force you to think critically and strategically and can even help you acquire outside funding for your next big investment.
So, how do you put one together? We’ll go over the different types of business plans, what to include in each section, and a simple business plan template for you to follow.
Business plans are used for different purposes. Sometimes, it’s to get the internal team on the same page, and other times, it’s to attract potential investors. Depending on who’s reading your business plan and what you’re hoping to achieve, you might adapt it to take a different layout. Here are the main types of business plans and what they’re used for:
Executive summary, company description, products and services, industry overview, market analysis, marketing plan, operations and management, financial plan.
This is where you’re introducing your grand idea. What’s the name of the business? Who’s behind it? When was this document prepared? These are all questions the title page should answer.
As far as design goes, keep it simple. Add a company logo (if you have one), but otherwise, keep styling and graphics to a minimum. This is a professional document, not a school project.
We have a lot to cover, and it’s not always necessary to read through every single section. A table of contents makes it easier to find the sections most relevant to the reader or to refer back to sections they want to reread.
The design here should also be simple (you’ll see this is a recurring theme), with a focus on functionality.
Here’s where we start getting into the meat of the business plan. The executive summary is your one-pager, sort of like an elevator pitch. It’s important to hook readers in at this point. If the executive summary doesn’t get them excited, what’s going to motivate them to finish reviewing your plan?
So much to say, so little space to say it. The executive summary needs to be refined and focus on what will get potential investors and lenders jazzed about your idea. What’s so exciting about it? How can you instill faith in your business idea?
Aside from that, it’s important to tease the research you’ve done around making sure this is a viable opportunity. Provide high-level details about:
Tip: Write your executive summary last. Because it’s basically a truncated version of your entire business plan, it’ll be easier to organize your thoughts once you’ve deep-dived into each of the areas below.
Now, it’s time to get into the nitty gritty about your brand – we’re talking really nitty gritty. Details like business name and address, founding date, legal structure, licenses, ownership details, number of employees, and more.
And then the higher-level fun stuff, like company values (an in-depth exploration of your vision and mission), short- and long-term goals, and positioning in the overall market. This is where you show you’ve done your research on competitors .
Here, you define the item that’s going to turn you a profit – in our case, the physical products you plan to dropship. Create a list of each product you plan to offer (and categories, if you have a ton), your pricing strategy and anticipated profit margin, and why customers will want to buy from you.
It’s a good idea to include a bit of information about how products will be manufactured and delivered. Will you be selling direct-to-consumer or through wholesale customers? How will you package and assemble orders? How do the orders get into customers’ hands? And how will you handle returns? These are just a few of the questions you’ll need to answer.
Remember to detail some of the valuable relationships you have in the industry to reinforce your likelihood of success.
This is where we look at the industry as a whole: Who’s operating in the vertical? What do these niche customers want? What are the economic trends for the industry?
Check out sources like Nielsen and Pew Research Center for information about consumer behavior.
You can also look for niche publications to find targeted analyses and reports.
A lot of the research you’ve put together for the above sections will inform your overall market analysis. The market analysis is a summary of the aforementioned, plus more information about your target customer.
When identifying your market, you need to consider if the size of your potential customer base is big enough to generate a profit. Use social media tools like Facebook Audience Insights to estimate the size of your potential customer base. You can also conduct keyword research to get an idea of how many people are searching for your products – and what their projected search volume is for the future.
Not that you know who you’re selling to, it’s time to establish how you’re going to communicate with them. In this section, you need to account for your sales and marketing approach – how you plan to get the word out about your brand and products.
Today’s brands have to use a multichannel approach, reaching potential customers through email , social media, SEO, content, print, and advertising .
Take what you’ve learned about your audience’s pain points and your competitor’s strengths to inform how you’ll communicate your differentiator. Pay special attention to your website and online channels for dropshipping businesses, as these will be the main touchpoints. It’s also a good idea to outline your post-sales customer remarketing and support plan.
Operations and management details the inner workings of your business. A few areas to cover include:
Then, you’ll also want to detail the day-to-day operations. How are orders fulfilled? What tech stack are you using to automate specific tasks? Which reports do you run and how often? What third-party vendors will you be working with? If you’re a new business, include any launch schedules as well.
If you’re presenting your business plan as part of a loan application or other funding request, this is where you make the ask. You’ve already laid why and how your business will be successful, so potential lenders and investors will feel more at ease with the risk. More than a quarter of businesses claim they can’t get the capital they need – you don’t want a poorly written business plan to be the reason you don’t.
Beyond stating and asking for the amount you need, you’ll also need to prove how this extra capital is going to fuel additional growth with your company. Outline where you’ll spend the money, what you’ll be purchasing with it, and how this will generate a return on investment for your biz.
Rounding out your business plan is the appendix. This is where any supporting documentation goes. We tack it on at the end because they can turn a relatively short business plan into an unwieldy, hundreds-of-pages-long document (nobody has time for that).
The appendix is like a reference section. This way, readers who need to validate something from the earlier sections of your business plan can easily navigate to the corresponding documentation.
If your business plan is prepared for a specific entity, include a line that says “Presented to:” followed by the individual and/or company name.
Tip: Keep your executive summary to one or two pages. Remember, this is a highlight reel for what’s to come.
A business plan is necessary not only for third-party individuals, but also for entrepreneurs who need to get their thoughts down on paper. Business plans hold you more accountable and break long-term goals into short-term action plans.
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Published Oct.12, 2016
Updated Apr.22, 2024
By: Cynthia Turner
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Table of Content
Are you looking for startup ideas that can easily be initiated and run from home? Well, you must then consider ecommerce business as after the prevalence of coronavirus pandemic internet sales have really shot up.
E-commerce business is based on selling things through the Internet. The line of products may vary from electronic possessions such as e-books or audio/videos to actual physical entities including clothes, furniture, toys, vehicles, etc.
To guide you about each and every aspect of this business, we are providing here a sample business plan for ecommerce of a recent startup ‘TradeE’.
2.1 the business.
TradeE will be a licensed B2C ecommerce startup that will be run through its ecommerce website. The online enterprise will be owned by Diana Blunt.
The business will sell downloadable products throughout the world, however, delivery services for physical items will be provided in just three cities, San Jose, San Francisco, and Oakland.
Management is an important aspect of business as it ensures that everybody clearly knows what they have to do and there is a check on every employee to ensure a perfect workflow.
Starting an online business usually seems easy since you don’t have to personally interact with customers and employees. However, this too can end up in a mess if you are failed at managing it.
Online management is a challenge because your ecommerce site and online transactions are always prone to hackers, frauds, and copycats. To make sure that your and your customer’s data is protected and everything goes like you intended, you must write a detailed business plan.
If you are looking for how to write a business plan for online store you can take help from here.
Diana will govern the business herself. To manage the online store , the company will be hiring social media manager, digital marketing director, virtual assistants, IT specialists, and delivery personnel.
The groups that are expected to be our major customers will mostly comprise of young, adults, and senior citizens. We believe that college students, working moms and dads, and senior members of households will surely find many things to buy from us.
Our target is to become a renowned online store in our service areas. We believe in generating profits by serving our customers with our best.
3.1 company owner.
Diana Blunt is the owner of TradeE. She has recently completed her MBA from the Lucas College and Graduate School of Business.
During the years of her graduation, she was constantly involved in learning emerging disciplines and skills such as graphic editing and ecommerce management.
Besides being tech-savvy she is also a great communicator, leader, and tourist.
Diana had always wished to start a business that can be expanded or contained whenever she wants. Viewing her digital skills and interests she decided to go for an online shop.
Another factor that helped her in this decision was her extreme love for traveling. She wanted to start a business that she can govern without being actually present there.
From this sample business plan ecommerce you can see how the online business TradeE was planned and executed.
Before starting the business, the company owner will do research on which product line should be chosen to get the most recognition. The company will also collaborate with other online businesses to buy their products and sell them on the company’s platform.
Since the business will mainly sell toys, clothes, bags, and accessories, a storage room will be taken on rent to keep the things.
Following the making of business plan ecommerce template, the company will hire the required personnel. TradeE will seek the services of a web developer and IT specialist to create a website that fulfills the criteria of secure transactions, foolproof client database, and copy-protected access. It will be ensured that the web design is user-friendly and descriptive.
The business owner aims at hiring the digital marketing team and director two weeks before the launch so that ecommerce business marketing plan could be executed.
Legal | $218,000 |
Consultants | $0 |
Insurance | $45,000 |
Rent | $20,000 |
Research and Development | $30,000 |
Expensed Equipment | $51,000 |
Signs | $3,500 |
Start-up Assets | $340,000 |
Cash Required | $350,000 |
Start-up Inventory | $68,000 |
Other Current Assets | $215,000 |
Long-term Assets | $295,000 |
Start-up Expenses to Fund | $610,000 |
Start-up Assets to Fund | $2,001,700 |
Assets | |
Non-cash Assets from Start-up | $2,409,700 |
Cash Requirements from Start-up | $198,200 |
Additional Cash Raised | $40,000 |
Cash Balance on Starting Date | $31,000 |
Liabilities and Capital | |
Liabilities | $35,000 |
Current Borrowing | $0 |
Long-term Liabilities | $0 |
Accounts Payable (Outstanding Bills) | $46,000 |
Other Current Liabilities (interest-free) | $0 |
Capital | |
Planned Investment | $2,500,100 |
Investor 1 | $0 |
Investor 2 | $0 |
Other | $0 |
Additional Investment Requirement | $0 |
Loss at Start-up (Start-up Expenses) | $97,800 |
Deciding your line of products is the most important part of your startup as it depends on your surroundings, budget, and target customers as well. Rather than being just fashion ecommerce or specifically jewelry ecommerce TradeE has decided to introduce itself as a multiple product line company.
The large range of products offerings by TradeE includes:
Clothes: We will provide all departments of garments for men, women, and children ranging from casual dresses, suits, daily wears to sports & swimming outfits. All the dresses, shirts, T-shirts and suits offered by us will be branded and designer-made.
Bags & Accessories : We will offer branded bags and clutches and a range of accessories including wristwatches, jewelry items, hats, sunglasses, keyrings, mobile covers, socks, gloves, umbrellas, hair accessories, and stationery.
Household Items : We will offer small household items such as home linens, baking dishes, baby items, and kitchen essentials.
Gifts: We will also provide packed as well as un-packed gifts to be given to people of all age groups.
Downloadable Products: We will also be selling e-books, audio and video files, games, movies, stock images, etc.
If you are planning e commerce business you must not ignore the fact that market analysis is equally important like all other aspects of a business. Before setting out for a new ecommerce venture, you must analyze where and how you can find the most people to turn into your customers.
Especially if your online business is based on physical products you must figure out which areas for delivery services will be suitable and which cities can help you in getting a maximum number of customers.
Analyzing and discovering your target people is also essential in the case when you are making decisions about social media campaigns. Your approach to promote your startup can only be effective if you know the age groups and the mindset of your target customers.
Ecommerce businesses are flourishing day by day because people found it convenient to have their favorite thing in their hands by a mere click. Another reason for increased sales is that many people avoid visiting shops personally after the pandemic has hit the earth.
The figures reported by IBISWorld supports the fact that one can’t be at a loss if they devise a comprehensive and workable ecommerce project plan before starting. According to the market research company, 234,699 online businesses are successfully running in the United States. A 10.2% growth rate in the ecommerce businesses has been observed in the past five years and a 6.9% growth rate has been predicted for this year that is 2020.
TradeE has categorized its target customers into three groups so that their corresponding choices, preferences, and needs could be thoroughly studied. It is advisable to also classify your intended clientele when you are writing a business plan for ecommerce startup.
The detailed marketing segmentation of our target audience is as follows:
5.2.1 Young & Adults: Our major target group will comprise of young people. They are expected to avail most of our downloadable products such as e-books, music, games. Moreover, we also believe them to be the biggest buyers of our clothes, bags, and accessories.
In addition, moms, the homemakers are also included in this category. Thus, we are confident that the major customer of our home items such as house linens and eating utensils will also be catered for in this category.
5.2.2 Senior Citizens: Our second target group comprises of senior citizens. They are expected to avail all of our services. The elderly persons will also purchase household items as they usually are devoted to homemaking.
Moreover, we expect this respectable category of our customers to be the biggest purchaser of our gifts, as grandpas and grandmas are the ones who want to make kids and grandkids feel special on various events.
5.2.3 Teens & Kids: Our third target group is comprised of children and teens. They are expected to purchase accessories such as wristwatches, mobile covers, stationery, and jewelry items. We also think that they could be the major consumers of our audio and video files and games.
Potential Customers | Growth | ||||||
Young & Adults | 44% | 35,000 | 40,000 | 47,000 | 58,000 | 64,000 | 10.00% |
Senior Citizens | 34% | 25,000 | 32,000 | 43,000 | 51,000 | 56,000 | 10.00% |
Teens & Kids | 22% | 13,000 | 15,000 | 22,000 | 29,000 | 34,000 | 11.00% |
10% |
Business targets as specified by TradeE to be achieved over a certain period of time are given here:
Our prices are in similar ranges as those of our competitors. However, we will keep on providing several discounts to our repeat customers.
If you are going to start any ecommerce company such as an online boutique you must focus on your marketing plan because that’s what makes an ecommerce site successful.
Without a detailed and perfect marketing strategy, it would be very difficult for you to reach out to people who are most likely to purchase your products.
Considering its importance, TradeE will start executing its sales strategy plan two weeks before the launch.
Our biggest competitive advantage is that we are providing a very vast product line so to increase the niches of our target groups. All our products will be authentic, and replaceable within 2 days. Moreover, we’ll be offering several discounts in the startup phase to attract more and more customers.
And finally, another thing that will be in our favor is that we will be able to deliver items fast as we are offering delivery services in the three cities that are really close to each other.
Unit Sales | |||
Clothes | 56,000 | 59,360 | 62,922 |
Bags, Accessories & Gifts | 46,000 | 48,760 | 51,686 |
Household Items | 35,000 | 37,100 | 39,326 |
Downloadable Products | 26,000 | 27,560 | 29,214 |
Unit Prices | Year 1 | Year 2 | Year 3 |
Clothes | $65.00 | $75.40 | $87.46 |
Bags, Accessories & Gifts | $44.00 | $51.04 | $59.21 |
Household Items | $36.00 | $41.76 | $48.44 |
Downloadable Products | $28.00 | $32.48 | $37.68 |
Sales | |||
Direct Unit Costs | Year 1 | Year 2 | Year 3 |
Clothes | $59.00 | $60.00 | $62.00 |
Bags, Accessories & Gifts | $45.00 | $46.00 | $48.00 |
Household Items | $30.00 | $31.00 | $33.00 |
Downloadable Products | $23.00 | $26.00 | $27.00 |
Direct Cost of Sales | |||
Your planning for electronic commerce couldn’t be justified as ideal unless you include in it the ways you will adopt to hire the most competent persons.
Since most of the employees of TradeE will be freelance workers, the company will conduct rigorous online interviews to find the most suitable employee.
The company’s owner will perform the duties of CEO and HR Manager. The list of company’s required staff, as well as their jobs descriptions, is given below:
Co-Manager | $22,000 | $24,200 | $26,620 |
Digital Marketing Officer | $18,000 | $19,800 | $21,780 |
Social Media Manager | $18,000 | $19,800 | $21,780 |
IT Specialist/Web Developers | $52,000 | $57,200 | $62,920 |
Graphic Designer | $16,000 | $17,600 | $19,360 |
Content Writer | $14,000 | $15,400 | $16,940 |
Drivers | $150,000 | $165,000 | $181,500 |
Customer Care Representative | $14,000 | $15,400 | $16,940 |
One of the biggest advantages of online businesses is that even if you starting an ecommerce business from scratch you won’t need a huge amount to invest. Your major spending will be the salaries of your employees and rent of your storeroom.
So in order to analyze expected profits or future investments and identify the resources that are available or could be needed in the coming days, you must prepare a financial plan.
Your financial plan should also include the details of at what financial status you would prefer to contain or expand your product line or service area.
The financial plan for TradeE is given as follows:
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 8.01% | 8.32% | 8.70% |
Long-term Interest Rate | 8.20% | 8.60% | 9.15% |
Tax Rate | 24.20% | 26.04% | 27.50% |
Other | 0 | 0 | 0 |
Monthly Units Break-even | 5340 |
Monthly Revenue Break-even | $136,000 |
Assumptions: | |
Average Per-Unit Revenue | $245.00 |
Average Per-Unit Variable Cost | $0.64 |
Estimated Monthly Fixed Cost | $169,000 |
Other | $0 | $0 | $0 |
TOTAL COST OF SALES | |||
Expenses | |||
Payroll | $304,000 | $334,400 | $367,840 |
Sales and Marketing and Other Expenses | $130,000 | $138,000 | $146,000 |
Depreciation | $2,200 | $2,400 | $2,700 |
Leased Equipment | $0 | $0 | $0 |
Utilities | $3,200 | $3,700 | $4,200 |
Insurance | $2,000 | $2,300 | $2,600 |
Rent | $3,200 | $3,500 | $4,000 |
Payroll Taxes | $40,000 | $42,000 | $45,000 |
Other | $0 | $0 | $0 |
Profit Before Interest and Taxes | $145,400 | $1,211,379 | $2,528,269 |
EBITDA | $145,400 | $1,211,379 | $2,528,269 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $29,080 | $242,276 | $505,654 |
Net Profit | $116,320 | $969,103 | $2,022,615 |
Net Profit/Sales | 1.52% | 10.30% | 17.48% |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $51,000 | $55,080 | $61,200 |
Cash from Receivables | $11,000 | $11,880 | $12,830 |
SUBTOTAL CASH FROM OPERATIONS | |||
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $0 | $0 | $0 |
SUBTOTAL CASH RECEIVED | |||
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $35,000 | $38,000 | $42,000 |
Bill Payments | $18,000 | $21,000 | $23,000 |
SUBTOTAL SPENT ON OPERATIONS | |||
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
SUBTOTAL CASH SPENT | |||
Net Cash Flow | $13,000 | $15,000 | $20,000 |
Cash Balance | $25,000 | $29,000 | $34,000 |
Assets | |||
Current Assets | |||
Cash | $250,000 | $280,000 | $308,000 |
Accounts Receivable | $21,000 | $23,520 | $26,436 |
Inventory | $4,000 | $4,480 | $4,990 |
Other Current Assets | $1,000 | $1,000 | $1,000 |
TOTAL CURRENT ASSETS | |||
Long-term Assets | |||
Long-term Assets | $10,000 | $10,000 | $10,000 |
Accumulated Depreciation | $17,000 | $19,040 | $21,420 |
TOTAL LONG-TERM ASSETS | |||
TOTAL ASSETS | |||
Liabilities and Capital | Year 4 | Year 5 | Year 6 |
Current Liabilities | |||
Accounts Payable | $16,000 | $17,920 | $20,142 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
SUBTOTAL CURRENT LIABILITIES | |||
Long-term Liabilities | $0 | $0 | $0 |
TOTAL LIABILITIES | |||
Paid-in Capital | $28,000 | $29,000 | $30,000 |
Retained Earnings | $62,000 | $67,580 | $74,338 |
Earnings | $185,000 | $201,650 | $221,815 |
TOTAL CAPITAL | |||
TOTAL LIABILITIES AND CAPITAL | |||
Net Worth | $260,000 | $283,400 | $311,740 |
Sales Growth | 7.01% | 7.77% | 8.61% | 3.00% |
Percent of Total Assets | ||||
Accounts Receivable | 9.11% | 10.09% | 11.18% | 9.80% |
Inventory | 5.45% | 6.04% | 6.69% | 9.90% |
Other Current Assets | 2.52% | 2.79% | 3.09% | 2.40% |
Total Current Assets | 151.00% | 152.00% | 154.00% | 158.00% |
Long-term Assets | 11.30% | 12.01% | 12.65% | 12.00% |
TOTAL ASSETS | ||||
Current Liabilities | 4.46% | 4.50% | 4.54% | 4.34% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
Total Liabilities | 7.12% | 7.18% | 7.24% | 7.38% |
NET WORTH | ||||
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 96.30% | 98.90% | 101.67% | 99.00% |
Selling, General & Administrative Expenses | 93.07% | 95.58% | 98.26% | 97.80% |
Advertising Expenses | 1.77% | 1.82% | 1.87% | 1.40% |
Profit Before Interest and Taxes | 42.90% | 44.06% | 45.29% | 33.90% |
Main Ratios | ||||
Current | 39.01 | 39.8 | 40.795 | 32 |
Quick | 34.2 | 34.8 | 35.67 | 33 |
Total Debt to Total Assets | 0.31% | 0.22% | 0.13% | 0.40% |
Pre-tax Return on Net Worth | 75.03% | 78.78% | 82.72% | 75.00% |
Pre-tax Return on Assets | 90.80% | 95.34% | 100.11% | 111.30% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | 33.40% | 34.44% | 35.50% | N.A. |
Return on Equity | 57.03% | 58.80% | 60.62% | N.A. |
Activity Ratios | ||||
Accounts Receivable Turnover | 7.5 | 7.8 | 7.9 | N.A. |
Collection Days | 100 | 100 | 100 | N.A. |
Inventory Turnover | 33.4 | 35.07 | 36.8 | N.A. |
Accounts Payable Turnover | 16.08 | 16.5 | 16.98 | N.A. |
Payment Days | 27 | 27 | 27 | N.A. |
Total Asset Turnover | 2.5 | 2.7 | 2.76 | N.A. |
Debt Ratios | ||||
Debt to Net Worth | -0.03 | -0.04 | -0.05 | N.A. |
Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
Liquidity Ratios | ||||
Net Working Capital | $218,000 | $230,208 | $243,100 | N.A. |
Interest Coverage | 0 | 0 | 0 | N.A. |
Additional Ratios | ||||
Assets to Sales | 0.82 | 0.85 | 0.93 | N.A. |
Current Debt/Total Assets | 1% | 1% | 0% | N.A. |
Acid Test | 27.8 | 30.1 | 31.1 | N.A. |
Sales/Net Worth | 2.2 | 2.1 | 2.3 | N.A. |
Dividend Payout | 0 | 0 | 0 | N.A. |
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Published: Aug 13, 2024, 7:15am
What is a marketing plan, marketing plan vs. marketing strategy, why businesses need a marketing plan, essential marketing channels, how to create a marketing plan, bottom line, frequently asked questions (faqs).
The difference between a flourishing business and a floundering business often comes down to an effective marketing campaign. This is especially true for small businesses. Every successful marketing campaign starts with a well-thought-out marketing plan. In this article, we will guide you through the steps on how to create a top-notch marketing plan to help put your business on the road to success.
A marketing plan is essentially a roadmap that guides businesses through the complex terrain of promoting their products or services. Think of it as a blueprint that details specific marketing campaigns, timelines, target audiences and channels such as social media , email or traditional media. Your plan should also establish clear metrics for success, the methodology used to evaluate performance and allocated budgets.
It is important to note that a marketing plan is not a static document. It is supposed to be an ever-evolving plan that adapts to market trends, customer feedback and the successful or unsuccessful marketing efforts. If done properly, a marketing plan will help you synchronize your marketing objectives with your overall business goals and ensure every marketing activity aligns with your broader vision of growth.
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Some assume that “marketing plan” and “marketing strategy” are the same thing, but be aware they hold distinct meanings and serve different purposes. A marketing strategy is more big-picture thinking. It identifies your target market, your value proposition, how you position yourself against competitors and how you will sustain your value over time. It involves deep insights into your customers’ needs, market trends and competitive analysis. It is essentially the “why” behind all your marketing actions.
The marketing plan, on the other hand, details the “what” and the “when” of those efforts. Once you have your marketing strategy outlined, you can begin to create a marketing plan. The plan should outline the specific campaigns, activities and tactics you’ll use to carry out the strategy. This includes details on the marketing channels you’ll use, the timeline for implementation, the budget and the key performance indicators you’ll track to measure success. It’s a blueprint that translates the strategy into actionable tasks and schedules.
A carefully crafted marketing plan can be a game-changer for small businesses dreaming of steady growth and a competitive edge over larger companies. Marketing plans with smart strategies and targeted campaigns can level the playing field by helping small businesses carve out their niche. It provides a clear roadmap that aligns marketing efforts with business objectives to ensure every marketing action contributes to the broader company goals.
This focused approach saves small businesses money by efficiently focusing resources instead of using a scattergun approach that can drain limited budgets. By identifying and understanding target markets, businesses can tailor their messaging to meet specific needs, which increases the likelihood of conversion. A solid marketing plan offers a framework for measuring success by setting benchmarks. With careful tracking, small businesses can quickly see what’s not working and adjust strategies in real time for better outcomes.
Today’s businesses have a wide array of marketing channels available to them. From highly analytical PPC advertising to engaging in-person event marketing, there’s no shortage of methods to promote your company.
During the past two decades, social media has proved to be a highly effective way for small businesses to market themselves at little to no costs. Platforms including TikTok, Facebook, Instagram, X and LinkedIn offer businesses a dynamic platform to engage directly with their audience. They allow for the sharing of content, running targeted ads and fostering community through comments and shares. Effective social media marketing can enhance brand awareness, drive traffic and strengthen customer loyalty.
Email marketing is another highly effective way to reach an audience directly. Newsletters, promotional offers and personalized content can nurture leads, promote loyalty and drive conversions. Email marketing offers measurable results and high ROI, making it a staple in a digital marketing strategy toolbox.
Content marketing involves creating hyper-relevant and compelling content that will act as a magnet to attract a laser-focused group of people. You can create blogs, videos, infographics and podcasts to cultivate an engaged community of followers with whom your brand’s message genuinely resonates.
SEO is the practice of optimizing website content to rank higher in search engine results pages. Effective SEO strategies including on-page optimization, quality link building and keyword research help drive traffic to your website.
PPC advertising is a method of online marketing where you pay a fee each time someone clicks on your ad. Popular platforms such as Google Ads and Bing Ads guarantee your ads show up first in search engine results for specific keywords, allowing you to bypass the “organic” results. While the pay-per-click fees can add up, this form of advertising provides immediate traffic and measurable results.
Influencer marketing leverages the reach of influencers in specific niches to help you promote your business to a larger audience. When you partner with a credible influencer, you can tap into their loyal followings, gain trust quickly and drive engagement that will hopefully lead to greater sales. Affiliate marketing can complement influencer marketing by allowing influencers to earn commissions on the sales they drive. This performance-based option is cost effective, as you will only pay for actual results.
Event marketing involves marketing your brand, company or service through in-person or virtual events. It can be anything from interactive webinars and educational workshops to large-scale conferences and industry trade shows. Event marketing gives you the opportunity to directly engage with your audience and hopefully provide a memorable experience for your customers.
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Creating a marketing plan is a step-by-step process. Make sure you take your time with each step before moving on to the next one.
An executive summary is a snapshot of your simplified marketing goals, significant milestones and an outline of future plans. It should encapsulate relevant facts about your brand, setting the stage for the detailed strategy that follows. This section provides stakeholders with a clear understanding of where the company stands and where it intends to go, concisely summarizing the essence of the marketing efforts.
Who are you trying to reach? By identifying your target market you can tailor your marketing strategies effectively to help them reach the people most likely to be interested in your products or services. Outline the characteristics of your ideal customer including age, location, goals, pains and trigger points.
Competitor research is a critical step in forming a marketing plan. Analyze the strengths and weaknesses in other businesses in your industry. This insight can help you identify opportunities for differentiation and areas where you can fill in the opportunity your competitors may have overlooked.
Without clear marketing goals, you are just shooting barrels in the dark. Are you trying to increase brand awareness, boast sales or grow your digital footprint? And if so, by how much and in what timeframe? Use the SMART criteria for goal setting, which advises that goals should be specific, measurable, achievable, relevant and time-bound.
Once you determine what your marketing goals are, it is important to track their effectiveness.
To do this, set baseline measurements for key performance indicators related to your goals, such as website traffic, conversion rates or social media engagement. Monitor these benchmarks on a regular basis and adjust strategies as needed to enhance marketing performance.
Are you going to throw all your eggs in the social media basket? Or are you going to diversify your marketing strategy with both digital and in-person events? This step requires a deep dive into the various channels available—be it social media, email marketing, SEO or traditional advertising. When choosing your marketing channels, be sure to ask yourself where your target audience is most engaged.
Finally, create a budget that covers all aspects of your marketing efforts from paid advertising and content creation to software subscriptions and event sponsorships. This will help you stay financially responsible as more marketing opportunities arise.
One of the keys to a successful business is setting yourself apart from the competition. A strategic marketing plan that details your marketing efforts can not only help you stand out but also provide a step-by-step guide toward reaching your business objectives.
The main elements of a marketing plan typically include an executive summary, marketing objectives, target audience definition, marketing strategies, budget and metrics for performance evaluation. It outlines the company’s strategy for attracting and retaining customers by detailing specific actions to achieve campaign goals, timeline with key milestones, channels to be used and team members responsibilities.
A realistic marketing budget is typically determined as a percentage of a company’s revenue. It is recommended that B2B companies spend 2% to 5% of their revenue on marketing. Because B2C companies typically have a broader range of marketing channels, it is recommended they spend between 5% and 10% of their revenue on marketing.
Every marketing plan should start with a clear mission statement for the marketing department that aligns with the overall mission of the business. This statement should be specific enough to guide marketing efforts but also allow room to adjust the plan as needed. For example, if your company’s mission is “to revolutionize home cooking,” the marketing mission might be “to inspire home cooks and provide them with innovative cooking solutions.”
Jennifer Simonson draws on two decades as a journalist covering everything from local economic developement to small business marketing. Beyond writing, she tested entrepreneurial waters by launching a mobile massage service, a content marketing firm and an e-commerce venture. These experiences enriched her understanding of small business management and marketing strategies. Today, she channels this first-hand knowledge into her articles for Forbes Advisor.
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Ecommerce Business Plan Examples 1. Maple Ecommerce Plan. This sample plan, provided on LinkedIn, is for a fictional company called Maple, an online store that sells exclusive Apple products. Maple's sample plan is great because it provides easy-to-follow charts and graphics while highlighting the most important information.
The business plan must also include the operations side of things. Determine who will be your manufacturer, secondary manufacturer, and shipping and fulfillment provider. When looking at supply chain costs and options, ShipBob is an ecommerce fulfillment provider you can consider.
Add brief details of your ecommerce business, target market, problem, solution, service model, business goals, and financial figures in this section. Adapt a narrative tone to make it interesting and keep it highly informative. And, most importantly keep it within a limit of 1-2 pages. Say goodbye to boring templates.
This e-commerce business plan template is tailored specifically to e-commerce businesses, and all you need to do is add the details of your company. Business Overview. If the business has legally been in existence for a little while, add some context for what's been accomplished since the business was founded and where it's at now e.g ...
Writing an eCommerce business plan is one of the first steps you should take if you're thinking about starting an online business. Whether you're opening an online-only shop or adding an eCommerce component to your brick and mortar store for an omnichannel retail experience, there's never been a better time to sell online.. The numbers don't lie: since 2014, the number of digital ...
The following Ecommerce business plan template gives you the key elements to include in a winning business plan for an ecommerce startup or an existing ecommerce business. Below are links to each of the key sections of a sample ecommerce business plan: I. Executive Summary. II.
Executive Summary. Every business plan needs an executive summary. Usually, you write the summary last, after you've fleshed out all the details of your plan. The executive summary isn't a repeat of the full plan—it's really just a brief outline that should be 1-2 pages at the most. When you're getting introductions to investors, you ...
For aspiring ecommerce owners, having access to a sample ecommerce business plan can be especially helpful in providing direction and gaining insight into how to draft their own ecommerce business plan. Download our Ultimate Ecommerce Business Plan Template. Having a thorough business plan in place is critical for any successful ecommerce venture.
Ecommerce Business Plan Template. Below are the 10 sections a sample ecommerce business plan should include: Executive Summary. Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
Draft an executive summary. An executive summary provides a concise rundown of the key points in your business plan. In short, it should summarize your chosen industry, business purpose, competitors, business goals and financial position. Executive summaries average 1-3 pages and are ideally under two pages.
Writing a formal ecommerce business plan lets you: Communicate your goals and vision of the present and future. Have a comprehensive understanding of what it will take to build a successful ecommerce business. Lay out your core value proposition and how you intend to deliver it.
Our free business plan template includes seven key elements typically found in the traditional business plan format: 1. Executive summary. This is a one-page summary of your whole plan, typically written after the rest of the plan is completed. The description section of your executive summary will also cover your management team, business ...
Follow these tips to quickly develop a working business plan from this sample. 1. Don't worry about finding an exact match. We have over 550 sample business plan templates. So, make sure the plan is a close match, but don't get hung up on the details. Your business is unique and will differ from any example or template you come across.
1. Write an executive summary. While you'll usually find the executive summary on the first 1 -3 pages of an ecommerce business plan template, don't feel pressured to nail it on the first draft. Some people even wait until after filling in the other sections to come back and draft an executive summary.
Tips for Writing an Effective Ecommerce Business Plan. Conduct Thorough Research: Gather comprehensive data and insights into your target market, competitors, and industry trends. Set Realistic Goals: Establish achievable and measurable goals that align with your business's resources and capabilities. Update Regularly: Review and update your ...
Our Solution. NoHassleReturn.com is an e-commerce start-up company positioning itself to become the market leader in offering online merchants and consumers a uniform and trouble-free way to return merchandise purchased online. The company offers a business-to-business solution to online merchants of physical, non-perishable products.
The sample ecommerce business plan for a fictional grocery store caught our eye, as it highlights all of the unique offerings and services this new company might provide. Dig deep into this business plan, and you'll see a section connecting buyers to distributors for fast and convenient deliveries. This is a business-to-consumer plan ...
Instead of shooting for the moon right away, set out the stepping stones for the stakeholders to easily understand your business objectives. Ecommerce Business Plan Examples 1. Maple Ecommerce Plan. This sample plan, provided on LinkedIn, is for a fictional company called Maple, an online store that sells exclusive Apple products.
7 business plan examples: section by section. The business plan examples in this article follow this template: Executive summary. An introductory overview of your business. Company description. A more in-depth and detailed description of your business and why it exists. Market analysis.
A business plan is a blueprint for your business. It sets out where you want to go and how you want to get there. While you might want to jump right into your ecommerce business and start selling, starting with a business plan is the foundation of a thriving business. Harvard Business Review found businesses that take the time to draft a business plan increase their odds at succeeding by 16 ...
A Sample eCommerce Business Plan Template 1. Industry Overview. Over the years, loads of things have changed especially the way businesses are conducted. The advent of the computer and later the internet gave a whole new definition of how things are supposed to be done in our world. E - Commerce is one of the fruits of the internet and for ...
An e-commerce business plan is a strategy for how your business will work, how you'll fund it, who your audience will be, and how you plan to succeed. Understanding how to create a business plan is key. It requires research, understanding your audience, budgeting, and more. The overall key to writing a business plan is to create something ...
From this sample business plan ecommerce you can see how the online business TradeE was planned and executed. 3.3 How the online store will be started. Before starting the business, the company owner will do research on which product line should be chosen to get the most recognition. The company will also collaborate with other online ...
Beyond writing, she tested entrepreneurial waters by launching a mobile massage service, a content marketing firm and an e-commerce venture. These experiences enriched her understanding of small ...