As the Benjamin Franklin quote goes, “by failing to plan, you’re planning to fail” – and it’s a sentiment that’s just as relevant today, in 2022, as it was in the 1700s.
Particularly if you’re an ecommerce business.
After all, one research project (a collaboration between Forbes, Huffington Post, and Marketing Signals) suggests that a whopping 90% of ecommerce businesses fail in the first 120 days of their existence. So how can yours avoid being part of that short-lived majority?
With an ecommerce business plan, that’s how.
So read on – we’re walking you through what ecommerce business plans are, and why you need one. You’ll find a complete ecommerce business plan template below, too – so you can start planning for your own online enterprise’s future, today.
An ecommerce business plan is a document that outlines your online business’s objectives and strategy. That’s a summary of both your goals and how you plan to achieve them.
A good ecommerce business plan should identify all the potential challenges your online enterprise will face as you chase profitability, scalability, or simply sustainability. They’ll lay out the groundwork, too: including an analysis of the market you’re planning to enter, and the customers you’re intending to target.
And, of course, an ecommerce business plan should get specific. How will you source your products? Which tactics will you use to market them? How will you fund your fledgling business, and maintain cash flow when times get tough?
Though they’re also useful for keeping you on track with your goals, ecommerce business plans are vital for attracting and securing outside investment, too – so it’s important you get yours right.
There are plenty of benefits to creating a comprehensive business plan for your online store:
- Gaining a deeper understanding of your business – your blockers, biggest assets, and most lucrative opportunities.
- Understanding the state of the market, and where you want to position your ecommerce store within it.
- Planning for what’s ahead – getting to grips with industry trends, and how they might affect your burgeoning business.
- Testing how viable your ecommerce store’s idea and concept is, and any weak points inherent in the premise.
- Assessing the outlay required – be it time, effort, or money, this is useful for understanding the scope of the work that lies ahead.
- Obtaining funding – business plans are, after all, super useful for selling the idea of your online store to potential investors.
- Clarifying your strategies for marketing, logistics, and finance, as well as exactly who your target audience is.Making your business idea a little more tangible – it’s starting to feel real now!
Ready to start penning your plan?
Read on – the ecommerce business plan template below offers a handy framework to get you started.
Like a blurb on the back of a book or an abstract at the start of an academic article, an executive summary is designed to give time-poor readers a concise, compelling overview of your ecommerce business plan’s contents.
While your executive summary should take pride of place at the top of your business plan, you shouldn’t write it until the end. That’s because you’ll figure out more about your ecommerce store’s plans, ambitions, audience, and strategies as you flesh out your plan – and you’ll want these to be reflected in that punchy, persuasive first statement.
So what should an executive summary include for an ecommerce business, exactly?
Here’s a quick (non-executive) summary:
- What your business does
- What goals you want to achieve
- What product or service you’re selling
- Where you’re selling
- Who you’re targeting
- Who your competitors are
- How you plan to make money
- How you’ll implement the business plan that follows
Remember, an executive summary needs to be crisp, clear, and to the point. Don’t waffle on with overlong or unnecessary analysis – you’ll lose your reader’s interest!
With your reader now hooked, it’s time to explain exactly who you are, what you do, and why you do it.
A company overview should include:
- Details of your products/services – what are you planning to sell?
- Your company’s key details – your name, tagline, logo, and any top-level branding information.
- Your key individuals – your founder(s), CEO, and COOs.
- Its legal structure: have you set up as a partnership, or a Limited Liability Company (LLC)?
- Your vision, mission, and values. Beyond making money, what does your ecommerce store stand for? What do you believe in – and what higher purpose gets your staff up and out of bed in the morning?
Next up in your ecommerce business plan, you’ll need to provide a detailed analysis of the market you’re entering into. This is crucial – after all, if there aren’t any existing market gaps for your business to service, it’ll struggle to make an impact.
Your market analysis should include an exploration of:
- Market size
- Current competitors
- Any gaps, opportunities, and threats
To do all this, a SWOT analysis is a pretty good place to start. It stands for Strengths, Weaknesses, Opportunities, and Threats. It’s a form of situational analysis that can help you understand the nature of your business vis a vis the competition.
Who are you planning to sell to? It’s a key question you’ll need to know – and that any potential investors will demand to know – before your ecommerce business gets off the ground.
So, your ecommerce business plan needs to get specific about that sweet slice of the pie you’re targeting. That includes a deep dive into the demographics – specifically, your prospective customers’:
To gain this info, you can conduct market research into the portion of the market most interested in – or most likely to buy – your products or services. That could involve running focus groups, or sending out incentivized surveys.
Advice from the Experts
Top Tip: For an even more granular way of conceptualizing your potential customers, create buyer personas. These are fictional depictions or real consumers, with pain points, goals, likes, dislikes, and demographic info all fleshed out.
By tailoring all your messaging to one or more of these personas, you can increase the effectiveness of your comms.
Next up? Details about how you plan to spread the word of your business.
This will include which communication channels you intend to prioritize, which marketing strategies you’ll implement, and which milestones and metrics you’ll use to measure it all.
Your marketing plan should make clear:
- Your marketing goals
- KPIs: such as engagement rates, traffic, conversion rate
- Key channels: email, SEO content, paid SEM marketing
- Your key marketing tactics: will you focus on social media, or plow your resources into influencer marketing? Perhaps a blend of both?
Need some digital marketing tips to add clarity and clout to your marketing plan? Our comprehensive guide has you covered.
You know how you’re going to entice your customers to buy from you – but how will you actually get your products to their doorstep once they do?
This is what your ecommerce business plan’s logistics section aims to explain. It’ll include:
- Where you’ll source your products
- How (and where) you’ll store those products
- How you’ll deal with orders
- How you’ll fulfill orders – in-house, or via a 3PL (third-party logistics) supplier?
- How you’ll handle deliveries, and which shipping provider you’ll partner with
- How you’ll deal with returns
3PL suppliers like ShipBob store, sort, pick, pack, and ship your goods – so they can be a fantastic option if you’re a growing business, and outsourcing the fulfillment process makes sense.
As it so often does in the world of commerce, your business plan all boils down to this – the money.
Your financial plan describes how you’ll first fund your business, then keep it afloat. Here, you’ll set out your fiscal stall with a series of projections around cash flow and income. The goal? To convince investors (and, on some level, yourself!) that your business has legs.
Your ecommerce business plan’s financial chapter should include:
- How you’ll fund your store’s start-up costs
- How you’ll price your products
- How much profit you’ll make on each product sold
- Financial projections
- Income statement
- Cash flow
- Balance sheet
Yes. Yes, you do.
It can be easy, as a business that only exists online, to get complacent – to assume that you don’t need a business plan.
‘Business plans are a traditional document,’ you think. ‘They don’t have a place in the world of modern ecommerce businesses.’
Well, guess what? They do – regardless of what you call, or how you classify, your business. But there are certain types of ventures where a comprehensive business plan will be especially useful. Among these are:
- New ecommerce stores
- Businesses seeking investment
- Businesses looking to expand into new markets
- Ventures attempting to increase their share of an existing market
Even if your ecommerce store falls into none of these categories, a business plan is always a good idea. It’ll clarify and crystallize your professional goals, hold you accountable to your ambitions, and keep you on track to making your dreams a reality.
In this article, you’ve learned exactly what a business plan is, and why it’s vital for commercial success – particularly for brands of the ecommerce persuasion.
You’re also well-versed in the structure and contents of an ecommerce business plan:
- Executive summary
- Company overview
- Market analysis
- Customer research
- Marketing plan
- Logistics plan
- Financial plan
What now? Well, it’s time to get researching and writing. So remember – keep it simple, keep it tight, and make sure it reflects the heart and soul of your business (and all that passion you feel for it, too!).
Putting together a business plan is exciting. It’s that tangible, real expression of your goals and vision for your ecommerce store – so it shouldn’t be a chore. Go enjoy it!
Hiring someone to pen your ecommerce business plan for you will cost anywhere between $5,000 and $25,000. You can recruit them from most of the platforms where creatives dwell: such as Airtasker, Fiverr, and Freelancer.com.