Business Planning for ECommerce

Yuck! What's the deal with business plans and why should you even bother with one? How many of us zone out as soon as we hear talk of executive summaries, production and marketing plans, sales strategies and budgets? I’ll admit I was definitely one of the guilty ones but I’m pleased to say that I am much better at planning now!

Lots of businesses plan ahead during their start up and repositioning stage but in the last lesson, we recognised that there are also lots of us who end up starting a business by accident! One minute we are plittering around making soap for the pure fun of it; or selling second hand clothes on Ebay just to get rid of the clutter. Next thing we know we have hit a boom time and suddenly we are running a business whether we planned it or not! We didn’t have time to develop a proper business plan and we’re still doing just fine - right?

Yes - and No!

Early successes may trick you into believing you don’t need an Ecommerce business plan but you will quickly be left behind by other businesses who take the time to plan out their online selling activity. A business plan is basically your secret recipe for the future. It's a must-have document that spells out what your business is all about and where it's headed. It is an essential tool whether you are a newbie who is just getting started or an established business that is looking to modify their activity.

Here are just a few good reasons to develop a business plan.

• Use your experience and research to inform your future plans

• Carry out sense checks on your ideas

• Recognise strengths, weaknesses, opportunities and threats within your business ideas.

• Discover gaps in your skills and operations.

• Develop your cash flow, pricing and profit margin strategy

• Plan ahead for business interruptions and impacts.

• Be better able to diversify if the need arises.

• Be in a stronger position to apply for grant funding, business loans and other finance.

You can find lots of business planning templates on the internet and if you compare a few you may come up with a template which suits you. Alternatively, you may wish to use the business planning templates which are supplied to you by your local business advice service, grant awarding body, bank or perhaps as part of a college course. The important thing is that it is relevant to your business and that it makes sense to you and anyone who needs to read it.

All business plans follow a similar process but when it comes to developing an ECommerce business plan, you will need to include specific information which relates to selling online. Much of what you learn in this programme will be ideal for inclusion in your business plan so we will regularly return to this lesson, as and when required.

For now, let’s familiarise ourselves with the information that you will need to gather. I have put together a long list of questions as you can see below. Some of them you will be able to answer now, but many of them relate to topics which feature in the programme!. It always feels good to make a start so, by all means, you can start filling out any detail that you already know, but be assured that this business planning questionnaire is a tool that I expect you to complete gradually as we work through the programme. You still have lots to learn but we will be returning to these questions regularly and you will soon see your plan starting to take shape.

Business Planning Questions

1. What is the name of your business

2.What is the actual or intended status of your business? 

2. Do you have, or plan to have, a registered Trademark? 

3. Are you VAT Registered?

4. Do you have one or more business bank accounts?

5. What product(s) do you want to sell?

6. What features and benefits do these products offer?

7. Is this your own product or are you selling another company’s products?

8. What is the current market demand?

9. Who are your customers and where do they shop?

10. How will the product(s) be manufactured?

11. Where will you source/ manufacture the product(s)?

12. Are there any legal considerations which specifically affect your product(s)

13. What packaging will be required for selling online?

14. What steps will be required to get your product ready for selling online.

15. Will there be variations (e.g. size, colour, flavour, fragrance)?

16. Will you offer standard or bespoke/ custom made products (or both)?

17. What will your estimated cost of goods (COG) be per unit?

18. Who are your main competitors?

19. What tips and ideas have you picked up from your competitor analysis?

20. Do you sell, or are you planning to sell on your own website?

21. Do you sell, or are you planning to sell on any online marketplaces?

22. Do you sell, or are you planning to sell using social media?

23. Do you sell, or are you planning to sell at any face to face venues?

24. Will you be selling B2C, B2B or both?

25. Are you planning to sell internationally as well as in the UK?

26. How will you create your product descriptions, specifications and instructions

27. How will you create your product imagery? E.g. photographs, videos

28. How will you market your products?

29. Where will you store your products?

30. How will you fulfil your orders and returns?

31. What will the average cost of postage be?

32. How will customers and others contact you?

33. Do you have a customer service strategy?

34. Do you have a plan for obtaining product reviews and/ or seller feedback?

35. How will you approach your book keeping and accounting?

36. After implementing your plans, what is your anticipated sales turnover in Year 1, 2 and 3? (see note below)

37. What will your estimated cost of sales be (per unit)? (see note below)

38. What will your overheads cost per month/ annum e.g. utility bills, staff, subscriptions? (see note below)

39. What will your average gross and net margin be?

40. What will your retail prices be?

41. What will your profit margins be?

42. What data do you need to gather and where can you obtain it?

43. Do you have a reporting format that you can use to gather date and inform ongoing business planning? 

Sales Turnover including website, marketplace, face-to face

Cost of Sales including cost of finished product, packaging, postage to customer, mandatory selling fees on sales platforms, ,

Overheads including salaries, utility bills, rent/ates, premises expenses, office expenses, accounting, subscriptions, advertising and marketing, travel & vehicle, consulting, insurance, IT equipment and software,