How to write a business plan for an ecommerce business

Creating a business plan can bring your e-commerce business idea to the next level. Having one can help you grow through essential preparations. It can also help you find funding. A plan can impress potential investors or allow you to apply for a small business loan. But there are a few things to include to help show what’s great about your new business.

This guide to writing a business plan for e-commerce business covers:

• Business description
• Competition
• Marketing
• Financials

Clearly explaining what you sell, whether that’s products or services, will help people understand the business better. What you offer can convince investors or lenders to get excited about the company.

You can detail your unique selling point (USP), or the key strength of what you sell, to show that your offering will be successful. Ideally, it is also something that no other business offers. For example, if you sell t-shirts, they could have unique, custom-made designs.

For an e-commerce business, stocking your products is a crucial component to earning money. That is why investors or lenders will look for details on supply in your plan. In this part, outline any manufacture or supply process you currently use or plan to. For example, you might have a dedicated supplier of mugs that you print your design onto.

Once you have a supply chain, you’ll need to get the products to your customers. Detail what happens when someone buys something from your e-commerce site. You might have a dedicated courier, so explain the relationship. It may also be helpful to mention any backup companies you could use if something goes wrong.

Manage the costs of supplies or distribution, with a current business account with built-in accounting software. Countingup, makes finances accessible. It includes an expense categorisation feature, so you can sort all of your costs with HMRC approved labels.

To find information about your competition, you can research other e-commerce sites. Look at the types of products other companies sell and see which ones might be similar to yours. They may have links to their social media accounts through their website. You can make a note of the content they put out on their Instagram, for example, and how regularly they upload. 

By singling out specific competitors in your plan, you can show the businesses you compare yourself to and what you are aspiring toward. by offering. Think about any sites that might take customers away from yours, even if it doesn’t seem obvious. For example, if you sell vinyl records, you may also count music streaming sites as competition.

To give investors or lenders a better understanding of the market, provide statistics. The e-commerce market overall is a growing industry, but you can likely find some projections for what you sell as well. For example, according to Statista, the eCommerce market in the UK was worth $102.6 billion (£75.2 billion), and fashion made up $34 billion (£24.9 billion) of that.

Your target audiences are the groups of people that are most interested in your product or service. To find who will be most suited to what you offer, you can send out surveys to the public. Ask questions about interests, lifestyles and social media. For example, 18 to 25-year-olds in university that like rap music and use TikTok could be your key audience.

Based on that audience and your unique selling point, build a brand. Branding covers the identity of your business you present to the public. It can include a name, logo and other elements that are consistent across your business. You can choose specific colours or fonts to use, perhaps even a tone of voice to communicate with customers. 

If you have a clear audience and a strong brand, your plan can include marketing channels. These are how you choose to get the word out about your business. There are many options to use, but it’s easier to decide if you tailor your approach to your desired audience. For example, if Facebook and surfing are popular with your audience, you could set up a beach-themed campaign on the platform. 

Most lenders or investors will be particularly interested in the amount of money you ask for. They will want to know why it’s that figure and what you plan to do with it. Banks also like to know you can pay it back with interest, and investors want to see the growth potential.

To show that you haven’t plucked a number out of thin air, include a strategy for the business and the costs for each step. For example, if you ask for money to use for marketing, mention your campaign budget for each channel. You can perhaps research those costs by asking for quotes from digital marketing agencies.

The expectations for the business are crucial. To show them financially, you can include a sales forecast. It calculates your projected sales revenue (money combining in) by multiplying the number of sales by the prices. You can lay out a forecast for a month, quarter or year.

As an e-commerce business, there are likely supply and distribution costs to maintain. In addition, marketing is likely to also play a significant role in driving your sales. To avoid the expenses of one part of the business affecting another, you should keep an eye on your incoming and outgoing money.

By setting up a business current account with Countingup, the app provides accounting software to make management easy. One of its features is cash flow insights, which routinely make you aware of any changes to your finance.

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