6 Steps to Write Effective Business Plan for Your E-commerce Store


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It can be an exciting moment in someone’s life when you think of starting a new venture. In this digital era that sees most of us handling everything online, e-commerce business has been thriving ever since. For you to develop a flourishing store online, you will need to come up with a well-calculated business plan. The challenge however for most people is executing the business plan correctly. It is essential for every person thinking of starting an online store to come up with a business plan that will aid the perspective that you have in mind. Having an ideal idea can save you a lot of time and money.

Let us consider 6 steps that will guide you in writing an effective business plan for your e-commerce store:


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Chapter 1

1. Executive Summary

This is the part where you’re doing an introduction to your company. You need to be very clear and precise about your online business as you highlight the company’s summary. It is here that the financial assistance you’re looking to find or a bank, will either say yes or no to you. You need to focus on the key points which are:

  • Your goals and objectives

  • The owner of the store or if there is a partnership

  • Will you have employees on a daily basis? Some entrepreneurs run successful businesses at the comfort of their homes

  • The type of services and products you intend to sell? It could be physical, digital or offering services

  • Who are your targeted clients? Will you be selling Business to Business (B2B) or Business to Consumer (B2C)?

  • How are you different from your competitors?

  • What are your financial projections? It’s always good not to exaggerate.

  • Will you need funding?

2. Market Analysis

For every e-commerce entrepreneur to be successful, it is essential to understand your market. It is vital to know the market segmentation and the key demographics that you’re targeting. This is the most critical section of your of your business plan. You need to research and understand who your competitors are since the online industry is very competitive. Your work is to convince the consumer why your product is the best for them. It is therefore expected that you ask yourself these questions:

  • What is the size of the market?

  • What is the growth rate of the market?

  • How much cost will you require for product sale?

  • How well are your distribution channels? Are your customers comfortable buying your products online?

You also need to identify from your competitors the following:

  • The advantages and disadvantages of your competitor's products

  • You need to prove how your product is better for the consumer than theirs

  • You need to explain the long-term process you will take to gain revenue if your competition is out of the picture.

3. Financial Projections

This is where you need to define your expenses and profits. You need to be as realistic as possible with your business plan. For the e-commerce store, you will need to keep in mind the following factors:

  • How much income are you planning to get? You can do an estimation from the higher to the lower side.

  • Your cash flow, how much money are you bringing in and what is going out?

  • Do you have enough money in case you get hit by severe times?

  • Have projections where you expect cash to be coming in more than going out.

  • Create a profit and loss account statement as this will help to show where you’re planning to be in future.

  • You will also need a projected balance sheet.

You should consider showing the best and worst setups. Businesses are always changing as you might realize going along. The months will not give you the same outcome each time. You should, therefore, schedule monthly meetings to see what changes you notice on different months.

4. Sales and Marketing

This is the crucial part of the online business as you need to figure out how you will attract and retain clients who will generate sales. You need to be clear on some factors to be successful;

  • What type of call to action will you use?

  • Who else is selling a similar product?

  • What channel of wholesale distribution will you use to reach your targeted consumers?

  • How will you demonstrate that your product is the better option if your competitors have the same type as you?

You also need to describe how you intend to position your product regarding:

  • Price - How much are other product similar to yours?

  • Quality - You need to define where you will fall in the market.

It is essential to know the avenues that you’re planning to use to create awareness of your website to reach your potential clients. You can use:

  • Social media - Which is widely used by most people, e.g., Facebook, Twitter, Instagram, etc.

  • Ad banners - Whereby you can advertise on other people’s web pages.

  • SEO - Search Engine Optimization increases your chances of being at the top of Google.

  • Affiliate Marketing - You can pay affiliates to increase traffic to your page.

The two essential promotions are:

  1. PR - Hire someone who will help you generate positive media coverage for your site. They can also refer you to paper writers who can help you write paper on a business plan that looks professional.

  2. Direct Mail - Focusing on growing the email list should be a priority. Email conversion is robust and should not get ignored as it is a way of reaching your clients easily.

5. Operations

This is where you cover your day to day activities about your business. You will need to list the following points:

  • Are you planning to start your website? If not, can you begin with sites such as Amazon and eBay?

  • Are you going to hire staff? If yes, how much will it cost you?

  • What facilities are you going to use, will you lease a space for the storage of your materials and products? Will you invest in a camera to take photos of your products?

  • Are your products easy to access?

  • What is the shelf life of your stock and how long are planning to keep it?

6. Exit Plan

It’s always crucial to have a strategic plan for your exit. Nobody wants to think of failure even before starting the business, but this does not mean that your online store will fail. It’s just a measure that you ought to take for future purposes. You need to ask yourself these questions:

  • Are you planning to operate the store for the long haul?

  • If not, are you planning to sell the business?

  • Are there plans of ever merging with other companies?

  • Do you have plans to liquidate your company?

Your exit plan should leave you with limited debt if not debt-free. You should take full advantage and get more exposure than when you started.

Having a business plan for your e-commerce store is like having a roadmap to making it grow and be successful. It outlines your goals, research and ideas on how you want your store to be. Online businesses have a vast ready market. Tapping into this market with a well-outlined business plan may elevate the success of your store which will help you in aspects such as getting a loan from a bank or getting that potential investor. Most importantly, it will help you cover your steps in all areas of your e-commerce business.


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