Online shopping is now the new normal around the world. People would rather order for goods and receive them at home without stress. I love it a lot, and I know you do too. That’s the age we’re in, and there’s nothing anyone can do except to join the trend. The truth is that more and more companies are establishing their online stores to enjoy the benefits. Also, small businesses are following suit by creating online stores for their goods as well. So, if you’re thinking along those lines, you’re on the right track. But, before you create your store, you need a plan to succeed. That’s why we present this article on the online store business plan template and how to write it.
Without a good plan, businesses fail.
I believe you’ve heard this line many times “If you fail to plan, you plan to fail”
Well, what do you say?
Do you want to start your store without writing a business plan?
Are you willing to bear the risk of business failure because you just dived in and launched a store?
I didn’t think so.
Therefore, use our online store business plan template to create a killer plan for your store.
Don’t worry about time; we got you covered with the guide on how to write it.
Let’s do this
What is an e-commerce business plan?
A business plan is a document that contains a business idea, an in-depth description, and the specific goals which the owner aims to achieve.
In the business plan, you can find the information about the organization and its strategies for achieving their goals.
A business plan also contains an analysis of business strengths, weaknesses, and financial projections too.
That’s why many people call it the directional roadmap for the business.
The focus of an online store business plan can be in two ways.
An upcoming entrepreneur may write it for external stakeholders such as customers and investors in profit-centered organizations.
But for non-profit centered business or even the government organizations, their external stakeholders include clients, donors, government agencies, taxpayers, economic agencies, and international lending bodies.
These are the people who’ll be interested to know how a business aims to achieve its targets.
When a business plan is written to target an organization’s intermediate goals, it is referred to as the strategic plans of an organization.
It outlines the goals to achieve in a bid to reach an organization’s external goals.
Some examples of strategic plans include organizational restructuring, new service creation, the establishment of a new Information technology system, finance restructuring, or new product development.
One thing to note about a business plan is that financial lending institutions will always demand it before considering a loan application.
It doesn’t matter whether your business is an online store or offline.
If you want to succeed in any e-commerce business at all, you need a well-detailed business plan.
Why do you need an online start-up business plan?
No matter how much in a rush you are, or how excited you are about the start-up, you need to create an online store business plan.
It has lots of benefits to offer, and some of them include:
1. It helps you to evaluate your ideas.
It’s easy to generate hundreds of ideas, but not all of them are actionable.
Thinking about something is simpler than executing it.
You can imagine yourself in the U.S, but the processes of actually landing in the U.S is not so easy.
You can even dream about it and see yourself shaking Donald Trump’s hand.
But the reality of achieving such a feat if you’re a nobody is not a joke.
Take a minute and liken it to that awesome business idea you’ve thought of in your head.
You’ve already seen your online store in your mind’s eye but have you checked the viability of such an idea?
That’s what a business plan will help you to do.
It will clearly show if the idea is worth pursuing.
Instead of wasting your effort, time, and money to end up in failure, an online store business plan will tell you the likely threats you need to defeat to succeed in your business.
2. A business plan simplifies the funding process.
It’s not always easy to raise all the capital you need for a business personally.
Even if you’ve been saving up for the business, the scope of what you aim to establish will determine the initial capital outlay.
That’s another reason to create a business plan.
But what you need is not just a casual type but also a well-detailed plan that will show the business’s profitability.
The truth is that no one will fund a company that is doomed to fail.
Well, we’re talking about money here.
Even Angel investors sometimes prefer to support already existing businesses that are already making profits.
So, if you want to secure funding for your online store, you need a strong e-commerce business plan.
It’ll show the investors and lending institutions that they can trust you to repay them when due.
3. It clarifies goals and strategies.
You need an e-commerce business plan to guide your steps in the business startup.
This document is expected to clarify the goals you aim to achieve.
It will also show the ground strategies to make them happen and the tactics you’ve developed to achieve them.
Without BP, your idea is an abstract.
But once you’ve prepared the document, the actionable steps will appear.
It’s in the process of developing the plan that you’ll also create the strategies.
By then, you’ve seen what is involved in that awesome idea that sounded so easy to achieve.
4. The plan prepares you against threats & challenges.
Another reason to write a business plan is to identify those threats against your goal achievement and overcome the challenges.
Some of them might include competitors, environmental constraints, and government policies that may be unfavorable to your business.
Remember, a good online store business plan carries the details of your competitors.
That will help you strategize better on grabbing a market share to drive profit.
5. The income projections encourage investors.
If you’re leaning towards business funding from investors, a well-written online store business plan will make it happen.
An e-commerce business plan has a part called your financial plan.
This section is where you’ll specify the startup costs and also explain how to recoup the investment.
You’ll make a lot of projections such as the projections for your fixed and variable expenses, revenue projections, etc.
If your analysis shows that investors will recoup their investment in a short time, they’ll be encouraged to invest.
6. It provides insight into your target market.
Your e-commerce business plan won’t be complete without research into your target market.
While you’re studying them, you’ll know more about their preferences and buying behavior.
That way, it’ll be easy to create convertible marketing strategies to boost sales.
Business plan template
Writing a business plan from scratch is not an easy task.
It doesn’t matter the time you have on your hands. At one point or the other, you’re going to need help to ensure that you cover the necessary sections of your plan.
That’s why a business plan template is the next best thing for your retail business plan.
Using an online store business plan template has a lot of benefits, and that why we recommend it.
1. It saves time.
A template reduces the time it will take to complete your e-commerce business plan by half.
It offers you an outline of what to write and saves you the trouble of overthinking.
All you have to do is do your research and fill out the necessary sections on the template.
2. An online business plan template helps you to know what to write.
Since you already have the outline of what an e-commerce business plan requires, you’ll know what to write in all the sections.
The guidelines from a well-organized template will help you understand certain aspects of a business that you never knew.
For instance, someone who’s not a Business Major or an accountant will struggle with the income statement and balance sheet.
He/she may struggle to write it since there’s no prior experience with it.
But with a template, a novice can create a well-detailed e-commerce business plan.
3. It helps you achieve a complete and well-detailed plan.
Using an online store business plan template is a surefire way to achieve your goal.
If you want to cover every important aspect of your business plan, our template ensures it.
It has every section you can think of, and once you’ve completed each of the areas, your business plan is complete.
Nothing is left out, and you will achieve a business plan that can convince a financial institution to extend a loan instrument to you.
Who can use a business plan template?
The online business plan template aims to help business owners and upcoming entrepreneurs succeed in their industry.
As they research every area of their industry, they will gather accurate information about their business.
Also, this template will help them to understand the important aspects of starting or growing a business.
So, anybody who wants to start a new business can use the business plan template.
That way, he/she won’t be venturing into the new waters blindly.
Without a template, it may be difficult to tackle every facet of the new start-up and its challenges.
But when you complete the process, you can face your goals headlong.
The second group of persons who can use the business plan template is those who have a business but wants to expand it further.
They can use this template to carry new research on their industry or even a related industry of their interest.
One thing to bear in mind is that you may need to get another template when writing for a financial institution or investors.
Some may have important details that must be present in your plan to convince them about your idea.
So, it is important to ask them for a template to ensure your success in securing the funding you need.
How to use a business plan template effectively?
Before using the template, you have to equip yourself with relevant information to ensure a smooth experience.
The template has reduced the work by half, but you must take some strategic steps to ensure an accurate result.
You can start by doing the following:
1. Learn and understand your audience.
One of the reasons for writing a business plan is to convince investors and financial institutions of your idea’s viability.
You need investment from the former and start-up loan capital from the latter.
So, your business plan has to be accurate, feasible, and convincing.
These reasons make it imperative that you put more time and effort to complete the plan.
Your investors must be sure to make profits at a good time while the bank needs to see that you can repay the loan on time.
But if you’re only writing for yourself, then you may not need to go the extra mile.
2. Have a clear goal in mind before writing.
Another important step you need to take for effective use of a business plan template is knowing your goals.
As earlier stated, a business plan is usually a roadmap to business success, especially for a new start-up.
But sometimes, it may be an already existing company that wants to know about a new or different industry.
So it all depends on your goals of writing the plan.
If it is for a new start-up, you must spend time developing the business plan template to ensure business growth.
As for learning more about an industry, you may need to concentrate on certain areas of the business plan template.
3. Cover it section by section.
If you want to be efficient in using the online business plan template, you must take it one section at a time.
We’ve noticed that many people find it difficult to start when they see the blank pages they have to fill.
So, if you feel the same way, don’t worry, everybody does.
Therefore, the best way to tackle the plan is by starting from the areas you’re confident to write.
Once you’re through with them, start the other sections.
Also, you can start by filling the sections with bullet-point details and gradually expand them.
Starting your e-commerce business plan
Before making an e-commerce business plan, there’re decision stages that come first to guide your business model.
The reason for these decisions is that you’re establishing an online store which is quite different from a physical store.
So, you have to consider some things before the business plan processes.
So, you have to decide on the following things:
1. Your products
What are you going to sell in your online store?
Will it be physical products such as shoes, home goods, appliances, fashion accessories, or clothes?
Are you going to sell services such as home cleaning, tutoring, consulting, or will you be selling digital products such as e-books, SaaS products, or e-courses?
You have to first decide on this to guide your e-commerce business plan.
2. Your target market
There’re many types of e-commerce business you can use to facilitate your goal achievement.
We have the B2B (Business to Business), B2C (Business to Consumers), and the Marketplace.
In B2B e-commerce, you’re selling to corporations, NGOs, and organizations.
But in B2C e-commerce, your target market is individual consumers and not a business.
When it comes to the e-commerce marketplace, you’re serving as the middleman who connects both B2B and B2C in one place to transact.
So, before creating the e-commerce business plan, decide on the target market for your online store
3. Your sources
Here is another important decision to guide your business model.
There are many options here, but you have to choose one.
For instance, you can decide to manufacture the products in-house if possible.
Or, are you going to reach out to a third-party manufacturer?
You can also just be a wholesaler instead of manufacturing anything at all.
You can buy goods in bulk and sell them in smaller quantities.
Finally, you can consider this lucrative business model known as drop shipping, where you leave everything to the dropship manufacturer and concentrate on customer relationships.
It’s all your choice at the end of the day.
But you have to decide on it before commencing with the plan.
How to make a business plan for an online store?
A well-detailed e-commerce business plan has many parts, and that’s what I will discuss in this section.
- Executive Summary
- Business Overview
- Competitive Market Analysis
- Products & Pricing/offers
- Marketing Plan & Operations
- Financial Analysis
1. Executive Summary
This is the section you see at the beginning of every business plan, but the truth is that it is written after the other sections.
Why? It’s like a summary of all the information in your business plan.
It summarizes the main points of the plan and entices the reader to continue reading.
So, when writing your executive summary, you have to be concise and accurate.
In your e-commerce business plan, the executive summary should contain the following:
This section tells the reader the need for the idea you want to explore.
You have to describe the reason for considering the creation of such a business.
For instance, if you’re planning to establish an online store that sells organic products for senior citizens, you may give reasons for such an idea.
It may be that there’s no such online store catering for the needs of senior citizens only, or the organic stores online offer limited products.
In the example above, the senior citizens are your target market.
But being that it is organic products, other age groups may be interested too.
Moreover, your target market may be males or even females, depending on what you are selling, physical products, services, or digital products.
Your business model will discuss four areas, such as the monetization strategy, product/industry, target market, and your sales channel.
Your monetization strategy explains your selling methods such as dropshipping, selling ads, white-label, affiliate marketing, private label, wholesale, etc.
When it comes to product or industry, the whole discussion is about your niche-the market segment where your product belongs to in the industry.
For instance, we have Fashion accessories, Skincare Products, business gadgets, etc.
Another section of your business model is the target market.
Here is where you mention the customers you aim to serve with your products or services.
For instance, if you’re selling business tech gadgets, your target market is businessmen and women, Entrepreneurs, companies, etc.
These are the people who use what you’re selling in their everyday operations.
When you come to the sales channel section of your business model, you’ll describe the method you’ll use to sell the products online.
Will it be on your website, social media platforms, or through affiliates.
No matter the idea you have, many others have had it and started to explore it before you.
So, your competitor is worth mentioning in your executive summary.
You’ll describe them and outline the strategies you will use to grab a profitable market share.
A summary of your financial plan comes under this subheading.
You can write a summary of your four years’ financial projections here as well.
Someone scanning your business plan will be interested in knowing the owners or key staff of the business.
Don’t forget to add their expertise that will drive business growth.
2. Business overview
In a detailed e-commerce business plan, the business overview section will be focused on everything about the company.
Here, you’re expected to cover sections such as:
Every company has its unique way of operation, and that’s what you’ll specify here.
Will your company be a sole proprietor, an S-corporation or a limited liability company, etc.?
This is what you’ll write under the company name.
But bear this in mind, each of these company categories has some tax implications and legal requirements.
So, employ the services of a consultant in company formation to guide your decision.
Your brand name is what your customers, suppliers, and the whole world will use to identify you.
For instance, we have Amazon, Shopify, eBay, etc.
All these are brand names, and whenever we hear them, we recognize them.
That’s what you’ll write here.
When choosing a brand name, it’s always best to opt for smart, unique, memorable, and simple.
When your brand name is captivating, people always remember it.
This section describes your brand in a few words.
You can list three words, or you can use more words.
It centers on the personality of your brand.
When you focus on that, you can come up with powerful words that best represent it.
The simplest explanation of a mission statement is your reason for being in business.
Why do you want to start the business?
What’s the reason behind the products you’re offering?
What influenced your decision to provide the services you’re proposing.
All these reasons make up your mission statement.
As the name implies, it’s a statement and not supposed to be a letter.
So, keep it simple, clear, and understandable.
These are short descriptions of the benefits which your services and products will offer to the target market.
What’s the relevance or importance of your offer to the general public.
Will your customers and clients benefit anything by patronizing your company over your competitors?
This is what you should clearly describe in this section of your e-commerce business plan.
A company without a vision is an effort in futility.
This is your dream for the company.
Where you want it to be in the future and how you’re going to take it there.
You have to outline your long-term goals in this section.
It can be your 5-year plan, 10 years’ plan, and 20 years’ plan.
Anybody reading your vision statement that extends to such a long time will know that you’re not there to waste time.
Every company works with people.
You are the number one staff in the company, but other people will help you to achieve the goals.
So, this section will cover a list of everybody that moves the business forward.
However, if it’s a sole proprietorship style, you may not need this section as you’ll be a one-man-squad.
But if not, create your list of personnel here.
Your personnel will include the CEO, the SEO manager, Advertising manager, Copywriter, Customer service or Logistics, and the Social media specialist.
This is the name of your online store or e-commerce website.
Remember, the more memorable it is, the more visitors you get.
Many people may want to visit your site, but if they can’t remember or spell it right, they won’t.
That’s why you must choose something short and relatable.
It must describe your business a little but not necessarily.
If possible, use a keyword that relates to your business.
That way, your business will be better positioned for SEO.
3. Market analysis
If you want to make your online business a success, you must take this section seriously.
As you gather the information to complete this section in the business plan template, your eyes will open to many things.
You’ll understand your industry better, the competition, and your customer demographic.
With such knowledge, your marketing strategy will be top-notch and all-encompassing.
Some of the areas you must cover in this section includes:
There are lots of things to write under the market segment.
You’ll have to discuss your niche selection, your target market.
Under your niche selection, you’re going to introduce your niche, your reasons for choosing it, and everything about it.
After all that, your idea will become more understandable, and the viability will be certain.
Well, that’s the aim, of course.
The next thing to write under this market segment is your target market.
You need to describe the customers you aim to serve with your products or services.
If there’re segments in your target market, here is the place to describe them.
You have to know your market in terms of age, education, income level, population size, geography, ethnicity, and online shopping behavior.
This is where you mention other players in your industry.
Who is the leading brand in your niche?
Who are you competing with, directly and indirectly?
If you want to write this section with accurate information, you need to spend time on competitor research.
You don’t just mention them but make sure you outline their characteristics such as their domain name, monthly traffic, price range, and business model.
RELATED: HOW TO DO A COMPETITOR ANALYSIS?
The easiest way to get the information you need for this section is to check the industry reports on Google.
This will help you to know more about industry growth and major contributors to it.
Also, you can visit a nearby shop that’s selling the same products you want to offer.
You can gather good insights from the store rep about consumer buying behavior related to different products.
4. Products & Pricing/Offers
In this section of the e-commerce business plan, you should state the products you want to offer.
If you already have the product, you will give the details about it, including the pricing.
Other aspects to cover in your existing product are:
- A sketch about the product
- The material, raw material, type, and other specifications
- Features of the products as well
But if you’ve not selected on the particular products you want to sell in your online store, you can decide easily.
There are different types of products to offer in an online store.
- Convenience products
- Shopping products
- Specialty Products
Convenience products are those types of goods that people buy without stress.
These products are easy to buy, and the market for it is usually larger.
Shopping products are not as easy to buy as a convenience product.
People put little effort into buying them, and they may shop around before deciding to buy.
The specialty products are those products that people buy due to the brand.
No matter the price of these products, people buy them because they trust the brand and prefer them over others.
When it comes to grouping your products under offers, you can do that under these categories:
- Core product
This categorization will enable you to determine your main product and other products you’ll offer to support it.
Don’t forget to add the Pricing range on Amazon for each category and the search volume.
Afterward, calculate the cost of the products to know the right margin estimates to add.
That way, you can determine the right prices to sell.
5. Marketing plan & operations
No matter how good or awesome your product is, you can’t sell them if no one knows about it.
Your online store needs visibility so that your target market will buy the products.
If you don’t engage in marketing, how will anybody find out that your products exist?
Your marketing plan covers your strategies on driving traffic to the website.
But you can create these strategies without studying your customers.
So, investigate your potential customers to get information about:
- Age group
- Geographical location
- Income level
- Pain points
- Education level
Moreover, make sure that the marketing strategies also aligns with the business model you stated earlier on.
The next step in your marketing plan is to determine the right channel to use.
There are many marketing channels available.
Some of the popular ones include:
- Paid marketing; this channel opens you up to pay-per-click ads, affiliate sales, Facebook ads, and influencer marketing.
- Organic marketing; using this type of channel involves social media marketing, content marketing, key bloggers, and blogger networks.
The best strategy, however, is to target an optimal mix involving more than one marketing tool.
But your decision will be dependent on the type of product you’re selling and the customer segment you’re targeting.
After deciding on the channels and tools to achieve your marketing objectives, you’re expected to create the marketing budget.
In your marketing budget, you will add the following items since you’re opening an online store:
- Marketing tools
- Influencer marketing
- Blog content/SEO
- Instagram/Facebook ads
- Niche advertisement
After creating the marketing budget, you’ll specify the technology you’ll use to ensure the successful operation of your e-commerce website.
Some of the important and necessary ones include the apps, e-commerce website platform, Hosting, Marketing automation, Fulfilment centers, email marketing, Accounting & taxes, marketing tools, etc.
Moreover, you must choose the technological tools you need based on your business model.
Research to know those platforms that best suit your business models.
There’s also the operations section of your e-commerce business plan.
The plan covers every process and people involved in ensuring that the products get to your customers no matter where they are.
This is where you have to determine the following things:
- The manufacturer of your products
- A secondary manufacturer if necessary
- Your shipping company and process
- The fulfillment provider
6. Financial analysis
The first information that should appear in your financial plan is the startup cost.
You have to evaluate it and design your plan around.
That way, you determine how long you have to sell before recouping your capital.
The truth is that you can estimate it based on traffic & conversion rates.
That’s why you should optimize your marketing efforts for better results.
The next area to cover under your financial plan is an income statement.
This section will provide detailed information about your financial projections.
It will carry your revenue projection, expenses, profit for a stated period, etc.
This income statement will show if the business idea is going to be a profitable one or not.
Your projected revenue will be dependent on the estimated number of units you’ve sold in your online store.
When you multiply the units by the average sales price, you’ll have your projected revenue.
The expenses, on the other hand, will be a combination of your fixed and variable costs.
With a well-prepared financial plan, you can discover the milestones you need to meet in your marketing efforts to achieve your profit goals.
But bear this in mind, all the figures you have are projections and not the real deal.
So, try to be as real as you can be when projecting the sales.
The good news is that your projection will motivate you to achieve more.
It will spur you into increasing your marketing and customer relationship efforts to increase conversion.
Like I said earlier, you’re supposed to project your revenue for a specific period.
You can create a 12-month revenue projection to determine your target earnings every month.
Every businessman or woman aims at successfully turning their ideas into a flourishing and successful business.
No one starts up an idea to fail.
That is why a proper business plan is necessary to prevent it.
Without planning, you can’t achieve your goals, and it will be difficult to convince others of the viability of your idea.
A business plan is a perfect solution to guide all efforts towards achieving a set objective right from the beginning.
The importance of a business plan cannot be over-emphasized, especially for an e-commerce business idea.
Since you’re operating in a wider circle that knows no bounds, you must have a roadmap to get where you want to be.
But creating a business plan is often daunting to many would-be entrepreneurs.
Sometimes, those who encourage themselves to write it often miss out on the important aspects of the process.
That’s why the online business plan template is a good option for you.
A business plan template offers a lot of benefits, such as saving time and cost.
It also ensures that you capture every important aspect of your plan.
Moreover, it encourages you to develop the plan personally instead of outsourcing to others.
That way, you can learn more about your industry as you research.
So, get your business plan template for your online store today and hit the ground running.