The Online Store Business Plan: Strategizing for SuccessAlex, May 11, 2015, 11:52 am
Technology is changing how people shop for goods and services, creating unlimited opportunities for entrepreneurs ready to start an e-commerce business or add e-commerce options to a brick-and-mortar operation. Starting an online store is relatively easy today because of the packaged software programs available for web design and commerce activities, but that does not change the need for an online store business plan.
The business plan forces the entrepreneur to strategize for success. It covers everything from the company description to financial planning. Specifically, the business plan will address:
Business mission and objectives - What is the overall purpose of the business, and what is the business owner’s vision?
Website host and design – This is the business storefront, and the website design is one of the major factors in online business success. What is the concept and how will the design attract customers? The description should also address intellectual property and trademark laws.
Products or services – Online businesses can sell products that are shipped or downloaded, and services that are delivered or downloaded. Will the business manufacture its own private label products or distribute other brands?
Logistics – How will products and services ordered online be delivered to customers?
Market and industry analysis – What industry and market trends point towards starting this business? Who are the competitors? What is the target market? What are the buying patterns of the target market?
Marketing - Before marketing an online business, it is important to review the Federal Trade Commission rules. The goal is to attract as much website traffic as possible, but in the right way. There are special regulations and laws that govern matters like prompt delivery and privacy. The marketing plan will address advertising, promotional strategies, link campaigns, pay-per-click advertising, social media, and so on. Online businesses can also use offline marketing and advertising strategies also.
Management Summary and Personnel Plan– What kind of business experience does the business owner have? What are the staffing requirements, i.e. office personnel, customer service, programming, order fulfillment, etc?
Financial Plan – What are the assumptions made concerning the financial statements? How much revenue must be generated to reach the breakeven point? The financial plan includes developing five-year profit-and-loss statements, balance sheet, and cash flow statements. Additional information includes business ratios and sales forecasts.
Tens of thousands of online stores open each day, and many of them fail. The reasons include not keeping up with changes in customer internet usage practices and not adapting to new technology, like mobile of popular social media. Thorough business planning is critical because it considers the opportunities as well as the risks. If the business owner needs to do fundraising to get the startup and operating money, the business plan can do double duty – serve as a roadmap and attract investors.
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