Ever dreamt of being your own boss? You’re not alone. At least 65 % of Americans share the same aspiration. But let’s face it, not every business is destined for Amazon-level success.
The U.S. Bureau of Labor Statistics reports that around 20% of new businesses fail within their first year, and only 50% survive beyond five years.
So, what sets successful eCommerce businesses apart? While some might say it’s all about hard work, the truth is, it all comes down to having a killer business plan.
And that’s what we’re going to talk about today. We’re going to show you how to create an eCommerce business plan step-by-step. We’ll cover what needs to be in it, and how you can use it to increase your chances of success.
But first, let us start with some basics:
What is an eCommerce business plan?
An eCommerce business plan is a strategic document laying the roadmap for launching and growing an online store. It covers key areas such as business goals, target market, marketing strategies, financial projections, and operational plans, providing a clear direction for decision-making and success.
How to Write an eCommerce Business Plan
There’s no strict rule on how long your business plan should be. If your business idea is complex, you’ll logically need a detailed plan. But at the very least, your plan should cover these seven key areas:
- The executive summary
- Company overview
- A look at your target market
- The products or services you’ll offer
- Your marketing strategy
- How you’ll handle logistics and operations
- Your financial projections
You might need to add a few more sections later on. But this totally depends upon your business. For example, if you’re entering into a brand-new market, you’ll probably require a section specifically explaining your target audience.
But for most online stores, these seven sections should be a solid foundation for your plan.
Now, let’s move on to understanding these sections in more detail:
Section 1: Executive Summary
This is the “quick pitch” for your business plan.
Your goal is to summarize the entire plan on just one page. This gives busy people the key info they need, and hopefully, makes them want to read more.
Here’s what you need to cover:
- What’s your business about?
- What’s your goal?
- What are you selling?
- Who are you selling to?
- What makes you unique?
- How will you reach customers?
- How much are you making now?
- What’s your financial forecast?
- Introduce your team members and their skills.
- If you’re seeking investment, state the amount.
Section 2: Company overview
This part of your business plan acts as the “deep dive” section.
It’s where you answer those small and important questions about your company like:
Company description: What does your company actually do? What problem are you solving that no one else is? How are you going to stay ahead of the curve as things change?
Products and services: What’s your secret sauce? What makes you unique from the competition? What customer needs are you fulfilling?
Business model: Are you selling directly to customers or to other businesses? Are you making your own stuff or sourcing it from others? Are you going with a traditional sales approach or something more subscription-based?
Mission and values: This part is about showing the mission and the values your company stands at.
Ownership and management: Who’s running the show? Give a quick background on your key people and the overall makeup of your team.
In brief, this section is about showing a clear picture of your company. It’s about explaining that you’ve thought things well and you’re ready for whatever comes your way.
Section 3: Market Analysis
Even though you’re running an e-commerce store, location still matters differently. It’s about understanding your place in the digital landscape.
That’s where market research comes in.
This part of your plan is about figuring out:
Market Size: How many people could possibly buy your product?
Market Share: How many of those people are buying from you now? How many do you want to buy from you in the future?
Industry Trends & Growth: What’s popular now? Where’s the industry going? Are there new areas you could sell in?
Studying the market helps you see if it’s already crowded and where you can fit in. Plus, it helps you understand who your potential customers are. This helps you plan your stock accordingly. It also lets you understand who you’re trying to sell to, so you’re not wasting time on people who aren’t interested.
Remember, things change quickly online. Analyzing the market and keeping up with trends can help you find new opportunities and stay ahead.
But just don’t stop at market analysis, also check what your competition is doing.
For e-commerce stores, here’s what you need to look at:
- How good is their website? Is it easy to use?
- Are they active on social media? Do people interact with them?
- How do they treat their customers?
- What do they charge for their products?
- What are people saying about them online?
The more you know about the market and your competition, the better chance you have of succeeding with your e-commerce store.
Once you know who your competitors are, it’s time to do a SWOT analysis. This means looking at their:
- Strengths: What are they really good at? What makes them successful?
- Weaknesses: Where do they fall short? What could they improve on?
- Opportunities: What chances are out there for them to grow or improve?
- Threats: What challenges or changes could hurt their business?
A SWOT analysis is like giving your competitor a checkup. It helps you answer questions like:
- What makes them a leader in the industry?
- What’s special about their business model?
- What are their biggest problems?
- Are there new technologies they could use to grow?
- Could changes in the market or industry affect them?
Usually, a SWOT analysis is shown in a simple grid with four boxes like this:
Each box has a heading (Strengths, Weaknesses, Opportunities, Threats), and under each heading, you list the key points in bullet form.
Section 4: The products or services you’ll offer
You might have talked about your products and services in other sections. But here things get more detailed if you sell unique or specialized products. For example, let’s say you run a sustainable handmade leather bags ecommerce brand. In the general overview section, you might briefly mention your product.
But, in this dedicated section, you can feature a specific bag, like a handcrafted tote made from vegetable-tanned leather. You can include details about its sizes, features, eco-friendly materials you used and the story behind the process.
However, if you’re trying to sell a bunch of different things, you can just give a general overview of each one.
To stand out, put photos of your products followed by a brief overview like this:
It will help investors and others actually see what you’re selling. On top of that, it will show how your product is different or better than what’s already out there.
Section 5: Your marketing strategy
Once you know you have a great product and good market for it, find out how you will market it.
For example, you can:
- Create helpful blog posts, use SEO, and consider guest blogging.
- Focus on the social media platforms your customers use most.
- Build an email list and use it to drive sales.
- Plan and budget for paid ads on platforms like Google and Facebook
- Consider traditional PR if it fits your strategy
- Decide if you’ll work with influencers and how you’ll approach it.
Most online marketing strategies cover what’s called the 4Ps or marketing:
- Price: How much do your products cost? Why did you choose those prices?
- Product: What are the product’s features? Why should people buy it? What makes it stand out?
- Promotion: How are you going to tell people about your products? Are you using social media ads? If so, on which platforms?
- Place: Where will you sell your products online? Which e-commerce platform will you use?
Even if investors love your products, they need to know you have a plan to actually sell them. And a marketing plan exactly helps you in that process.
Section 6: How you’ll handle logistics and operations
The operations plan is like your behind-the-scenes blueprint. It shows investors you’ve thought about how to handle things even if things get tough. Here you also need to keep things specific, like whether you’ll be dropshipping or doing print-on-demand.
Think about everything you need to make your business run. Maybe you need an office or a store. Maybe you need special equipment. You’ll definitely need computers, internet, and accounting software – the list goes on. Explain what you need, the steps involved in running things, how you’ll pack and ship orders, and so on.
Your operations plan should cover every step of getting your product to the customer:
- Suppliers & service providers: Where do your products come from? Where do you get the materials to make them?
- Production: Do you make your products, buy them, or use dropshipping? Are they physical or digital?
- Facilities & equipment: Will you have an office, a physical store, or a warehouse?
- Sales channels: Besides your online store, will you sell on social media too?
- Inventory: How much product will you keep on hand? Where will you store it?
- Delivery: How long will it take to deliver orders? Will you ship locally and internationally?
Section 7: Your financial projections
The time and money you put into your business won’t impress possible investors if you don’t have a history of being good with money. They mainly care about whether your business can make money and stay afloat.
Your financial plan is a cornerstone of your e-commerce business plan. 82% of companies fail due to cash flow issues. This is why potential investors need assurance that a business is worth their investment. A detailed financial analysis also helps determine how to cover those initial startup costs.
Every business is different, so the details will change, but most financial sections of a startup business plan include these things:
- Income statement: This details revenue sources and income statements, revealing whether the business turned a profit.
- Balance sheet: This gives a quick overview of your business’s equity, calculated as the difference between assets and liabilities.
- Cash-flow statement: Similar to the income statement, this provides a real-time view of your revenue and expense flow. More income than expenses signals positive cash flow, while the reverse indicates negative cash flow. Strive for the former to maintain your business’s solvency.
Investors and banks don’t like to take risks. Showing that you understand money makes them trust you more and they’re more likely to give you money for your business. Having a clear picture of your budget makes your company look stronger and more likely to succeed.
Summing it up
Planning is important when starting a business. It helps you figure out what your business does, how it works, and why it matters. You’ll also identify your key team members and target customers. With the tips and examples here, you’re on your way to creating a winning e-commerce business plan.
If you want to save yourself the hassle of writing a business plan from scratch and save valuable time, consider using AI business plan generators. These tools can create detailed plans in minutes. You simply need to provide some context, such as what your business is about, and the AI will take care of the rest.
Got questions?
How long does it take to write an eCommerce business plan?
The time it takes to write an eCommerce business plan can vary. It depends on how big your business is, how much research you need to do, and how detailed you want your plan to be. But with AI business plan generators, you can create a plan in no time.
Can I change my business plan?
Of course! Your business plan should change as your business grows. You’ll want to update it if there are big changes in the market, you have new product ideas, new opportunities for growth, or your financial projections change.
Who is the business plan for?
Your business plan is primarily for you and anyone who owns a part of your business. It gives investors the information they need to decide if they want to invest. It also helps lenders decide if your business is financially sound and if you qualify for a loan.