E-Commerce Business Plan Template

If you want to start an e-commerce business in 2021, you need a plan. An e-commerce business plan will help you stay focused and think through your business set-up. Also, other investors, partners, or banks will want to know what you are doing with your business if you want to expand in the future making a business plan prudent.

It is wise to review your business plan on an annual basis or as things change. Markets can change quickly and you need to be able to adapt and change plans accordingly.

Below, I will go through a typical business plan template in relation to the e-commerce industry.

Executive Summary

An executive summary is a few sentences describing who you are, what you do, and how do you do it. This is a high level explanation of your business. Think of it as a description of your business if you’re talking to someone at a party and they ask you what you do. Give them the highlights.

Mission Statement

You will then want to create a mission statement. A mission statement is designed to describe a company’s purpose in one or two sentences.

Here’s Shopify’s mission statement:

OUR MISSION

“Making commerce better for everyone.”

“We help people achieve independence by making it easier to start, run, and grow a business. We believe the future of commerce has more voices, not fewer, so we’re reducing the barriers to business ownership to make commerce better for everyone.”

The first sentence is concise and to the point. They then expand on this to help the customer understand what the business is doing and how they’re doing it.

It could be a good idea to revisit your executive summary and mission statement after you’ve completed your business plan. You will have more insight into your product offering and ideal client.

Once you know what you’re selling and who you’re selling it to, this will help inform your mission statement. You want it to be concise and impactful. It needs to be strong and independent and tells people what you’re doing.

Entity Structure for Legal and Tax Purposes

List your members or owners.

You need to decide what your entity structure will be for your business. Will you be incorporating, self-employed, or a partnership? Do you plan on having business partners or shareholders? What is your expected revenue and profitability going forward?

These kinds of questions will help you decide on what kind of business entity to establish and how you would like to be taxed. These areas can require legal and tax advice as the business grows and gets more complex.

If you’re establishing a multi-member LLC, you will want to list the LLC as the legal structure being taxed as a partnership. Then you will want to list the members and their titles and duties per the articles of organization and operating agreement.

Business Organizational Chart

Who does what?

I think this is a good exercise to do with every business. Even if you’re a single business owner, it is helpful to create a flowchart of the organization. Start at the top and work your way to the bottom of duties and responsibilities.

List these out as job titles and what each job entails. You can then visualize the company and inner workings. As you grow and begin to hire people, this will help align the appropriate roles for each person.

Describe What You’re Selling

Product or service?

What EXACTLY are you selling. Is it a product or service? You should be as specific as you can explaining what your product or s service entails. For example, if you are selling a subscription-based SAAS like DocuSign, you want to describe what it is capable of doing and how it will help solve problems for people. Why will people want to buy it?

In the case of DocuSign, they’re selling the potential to save customers time and money by eliminating administrative processes and supplies. If your business runs on paper and deals with a lot of contracts and paperwork, they allow everything to be signed electronically in a secure and safe environment.

Business Model

The pricing structure of your business and how you’ll make money.

How do you plan on making money? If you’re selling a service like online tutoring for high-school students will you be charging per the hour, by course, or offer a monthly subscription model?

These things can change over time but you will want to consider your costs per client and what you will need to make in order to be profitable. Also, consider what your competitors are charging for and what your customers are willing to pay.

Who Are Your Customers?

Defining your niche is extremely important. Who is your ideal customer? Get as specific as possible here. What is their demographic – age, gender, interests and hobbies, education, relationship status, income, net worth, goals, and aspirations. Where do they hang out and what do they believe?

Create a client profile you can refer to when thinking about your value proposition.

Market Analysis of Competitors

Once you have your product, pricing/business model, and ideal customer you should do some research on your competitors. There are various firms and market research databases you can use to research. You will want to get as much information as you can about your competitors. This will help you find weak areas in their strategy and see what you are up against.

SWOT Analysis of Your Business

The competitor research will provide you with the information to do a SWOT analysis. A SWOT analysis is when you list your strengths, weaknesses, opportunities, and threats as a company. There are numerous templates online for reference.

Be honest here and come up with a real list of what these areas consist of. The SWOT analysis can help you brainstorm ideas about your business and market.

Customer Acquisition

This one is big. If you don’t have customers you don’t have a business. How do you plan on getting new business? Create a marketing plan and follow it. Think short term and long term – these strategies will be much different.

You need to have short term goals to get some quick wins to generate revenue. You can reinvest funds into the business to help acquire more business and so on as you make more sales.

Learn how to sell. What marketing channels do you want to use? How will you use them? When will you pivot if something isn’t working?

Financial Projections

Revenue generated and expected startup expenses.

Financial projections are important to understanding your business. Do the best you can with this since things can change rather quickly. Running a business will have its ups and downs with income so be conservative and realistic with your projections. Keep in mind that everything almost always costs more than you think it will.

Create financial forecasts going out several years to have some targets to shoot for and to help with decision making and focus. Obviously, all of these things listed here can change at a moment’s notice but it’s still better to have a plan than not have a plan. It helps keep you on track. Otherwise, you will be running around like crazy with no direction.

Finishing Your E-Commerce Business Plan

Following the template above will help e-commerce business owners understand the full scope of their business and identify areas that may need additional attention. Getting the plan written down also adds accountability for long and short-term goals.

After completing a business plan, keep it open for evaluation. Understand you will likely need to clarify and adjust goals as your e-commerce business continues to grow.

If you’d like an objective second opinion about your finances, please contact Michael Shea, a CERTIFIED FINANCIAL PLANNER, at Applied Capital. Email him at [email protected] or fill out a contact form.

DISCLAIMER
This blog is provided for informational purposes only. Such views are subject to change at any point without notice. The information in the blog should not be considered investment or tax advice or a recommendation to buy or sell any types of securities. Some of our blogs or information therein have been obtained from third party sources believed to be reliable but such information is not guaranteed. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular investor’s financial situation or risk tolerance. No reliance should be placed on, and no guarantee should be assumed from, any such statements or forecasts when making any investment decision.

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