Starting an eCommerce store is currently one of the most profitable business ventures. With so many brick-and-mortar stores becoming obsolete and more and more people transitioning to online shopping, it’s obvious that eCommerce is here to stay.
Experts predict that retail eCommerce sales will reach $4.13 trillion in 2020 and that number will only rise, so now is the perfect time to start your own eCommerce business. However, starting this kind of business takes a lot of preparation and planning.
If you want to have a business that’s already successful without too much planning, you can contact a website broker and purchase a website. However, if you want to build your business from the ground up, you need a good plan.
The first thing your business plan needs is an overview of your company in which you will detail your high-level goals.
Some things you can include in your company description are:
- A list of all the people who own your eCommerce business, and if there are multiple owners, detail all the responsibilities of each individual.
- Names of the founder or founders of the business and what motivated them to start the business.
- Names of all individuals who are responsible for business operations.
- Professional and personal qualifications of the people who run the business that show what makes them fit to run the business.
- The business model you operate in (if you’re using a business to business model or selling directly to customers).
- The type of business your company is (whether it’s a sole proprietorship, an LLC, or a partnership).
Products you’re selling
Make a list of all the products you’re currently selling as well as the products you’re planning to sell at some point in the future.
In this part of your business plan, you need to include:
- Main product lines. There’s no need to list every item you sell on your online store, it’s enough to divide them into specific groups or categories. List the benefits of your products and why you decided to sell them in the first place.
- Differentiators. The products you’re selling are probably also being sold by many other eCommerce stores. State what makes the products on your website unique and different from your competitors’.
- Product sourcing. Make a list of all of the different sources from where you get your products, your storage locations, as well as how you stay in touch with all of your suppliers.
- Costs. Create an overview of the average cost it takes to acquire your products and at which cost you will sell them to your customers.
- Product life cycle. State if your products are seasonal or if you sell them year-round. If they’re seasonal, say when customers can expect to see which product on your website.
In your business plan, you have to figure out if there is demand and a market for the products you’re selling. This part of your business plan can be broken down into three sections:
- Audience segmentation. It’s important to know which demographic of people you’re trying to sell your products to. You can segment your target audience based on their age, geographical location, and values to create buyer personas. This will help you understand your potential customers much better.
- Industry analysis. Research the market for your industry to see how it has changed and grown over the years and determine if it will change in the future.
- Competitive analysis. Make a list of your biggest competitors and identify their key strengths and weaknesses. Try to find ways in which you’ll be able to beat those competitors and offer more value to your customers.
Good marketing strategy
One of the most important parts of your business plan is your marketing strategy. In it, you have to detail how you plan to attract people to your website, convert them into customers, and which tactics you will use to turn them into repeat customers.
Create a good website
You can’t run an eCommerce business without a website. It’s important to remember that your website represents your company, so it can’t be poorly made. If you truly want your business to grow, you need to use an enterprise eCommerce platform to create a robust and professional-looking website.
Also, it would be a great bonus if your site is accessible on mobile phones so everyone can use it.
Focus on SEO
Once you build your website, you need to work on getting it noticed with search engine optimization. As 53.3% of all website traffic comes from organic search, reaching a high-ranking position on Google should be your priority.
Come up with a great SEO strategy and decide whether you want to optimize your website yourself or if you want to hire a professional to help you. If you decide to do it yourself, list all the tools you’ll be using, what your keyword strategy will look like, and the rest of your on-site and off-site SEO strategies.
Come up with an email marketing campaign
Email marketing is a cornerstone of many eCommerce businesses. If you develop a great strategy, you’ll be able to find new leads, develop great relationships with customers, and send out valuable content.
Detail the following:
- How you plan to acquire subscribers and get people to sign up for your mailing list.
- How you’re going to segment your mailing list
- How often you want to email them and how you’ll avoid your emails being marked as spam.
- What kind of content you’re going to send and what additional copy you’ll include.
Social media marketing is taking over the eCommerce world, and it should be a big part of your marketing strategy. Research your target demographic to find out which social media platforms they’re active on and plan out how you want to engage with them on social media.
Come up with a strategy for encouraging your website visitors to become loyal customers. Some ways you can do this is by creating rewards and referral programs, sending out newsletters, and running retargeting ads.
No matter if you’re seeking outside funding or not, your financial plan needs to be extremely detailed. When you plan out your finances, it will be harder to be caught off-guard by unexpected costs.
Raw operational costs. Detail the cost of all of the components you use to operate your business and be as detail-oriented as you can. You should mention things such as rent costs, employee salaries, shipping fees, computer programs, office supplies, etc.
Current assets. See if you have enough money to cover at least the company’s fixed costs, and preferably the variable costs as well.
Projected profit and loss. Detail how much money each project will cost you, add your expected revenue to calculate your expected profit.
Break Even point. When you calculate your projected profit and loss, determine how many products you need to sell before you’ll be able to reach your breakeven point.
Scalability. Plan how you want to scale your business as you acquire new customers.
Without a good plan, you won’t even be able to get your business off the ground, and you especially won’t be able to grow it. Even though business plans have to be incredibly detailed and it will take you some time to write one, it’s a smart thing to do if you’re hoping for long-term success.