Running an ecommerce store without a business plan is like going on a treasure hunt without a map. Business plans serve to minimize risk and maximize profit by considering variables in advance. There is no risk-free business. Do you need a business plan for dropshipping? What about selling handmade goods? Yup. Obviously, if you have no plans to turn your online selling efforts into a viable business, you can skip the business plan aspect. Is this just a hobby for you? If you want to make significant income in online retail, you’re going to need an ecommerce business plan. It’s how you turn a side hustle into a full time job.
But not all business plans are created equal. The finer points of creating an ecommerce business plan aren’t the same as if you were creating one for a brick and mortar business. There are plenty of templates and how-to’s available on the internet for writing an ecommerce business plan, but maybe you’ve just found yourself stumped on where to start. What’s the most important part of an ecommerce business plan? We’re going to go through four important sections of a business plan and evaluate their importance to ecommerce retail specifically. All of these sections should be included in your business plan, but some are more relevant than others. Let’s dive in.
The executive summary is typically the last thing you write. You’ll hit the highlights of your ecommerce business plan, but you don’t have to go into a great deal of detail. Your business plan is probably going to serve mostly internal purposes, since ecommerce retail businesses don’t usually need investor funding to get started. This means your executive summary doesn’t have to double as an “elevator pitch.” If you were running a tech startup here, your executive summary could be one of the most important parts of your business plan. It would be what investors and financiers see first during a fundraising session. But for online selling? It’s not a super important part of your business plan. Your ecommerce business won’t fail on the back of your executive summary.
On the other hand, your business could fail on the back of faulty or ineffective market research. Market research consists of where your business fits in within the environment of your product. Ecommerce specifically is more crowded than ever. It’s only going to get more crowded from here. You’ve got to figure out if there’s room for you in the market. Better yet, figure out how to make room for yourself. But you have to go about it in an in-depth way. This isn’t like a business plan for a restaurant. You can’t just use Google Maps to check how far your location is from the next nearest pot belly sandwich shop. There are no physical boundaries on the internet. That means your market research in your ecommerce business plan needs to focus on what differentiates you from a competitor that’s one click away. Is it price? Personalization? Aesthetic? Quality? Market research is hugely important in an ecommerce business plan.
Management and Personnel
I’ve talked to a lot of friends who are starting businesses and they spend a lot of time talking about their role within their company’s hierarchy. These are the people who call themselves the CEO of the business they just started last weekend. I don’t mean to make fun of their ambition, but for online retail, management and personnel structures are just not the most pressing matter in the beginning stages of your business. This section of the business plan is more important for businesses that will be attached to a brand or driven by creativity, something where there will be a lot of contributors and keeping roles clearly defined is key to stay on message. The same doesn’t necessarily apply to ecommerce retail. If you’re selling on Amazon or eBay to start out, there are automation software tools like ours here at ecomdash that can eliminate the kind of tedious tasks that typically require hired help. A lot of these tools scale with you as your business grows. Personnel plans will be important in the future, but for an ecommerce business plan, there are more important areas to focus on.
This is another important area, and one that’s often overlooked. See, people mistake common for easy when it comes to ecommerce. Just because a lot of people do it doesn’t mean it’s easy. You can’t expect to have a successful online retail business without planning how it’ll operate. Having a clearly outlined operations strategy makes your ecommerce business plan more effective. Here are some good questions to ask yourself:
- How will you manage your inventory?
- What marketplaces will you sell on? Not just the larger ones, but emerging marketplaces like Jet?
- Will you have your own website? What shopping cart will you use? A platform like Shopify or an open source solution like Zen Cart?
- What is your supply chain like? Will you be dropshipping, manufacturing, or supplying?
- What’s your sales model? How will you draw customers to your website, or attract them on your marketplace?
Keep your operations strategy realistic and make it one of the forefronts of your ecommerce business plan. Focus your business plan energies on the aspects that will affect your business the most.