Opening an online store begins with a long-term business plan. The creation is preceded by analytical studies, SWOT analysis, and competitive intelligence: a larger cycle of work that allows you to objectively assess the current situation on the market and make forecasts. Business planning is necessary to attract investors and obtain a loan when using personal funds – to prevent force majeure, set goals, budget, and solve other problems. We tell you how to draw up a business plan for an online store, what structure it has, and why it is impossible to do without it.
What is a business plan, and why is it necessary for an online store
A business plan is a guide for any company, which records all stages of development, possible risks, financial costs, goals and other nuances of work, calculated for at least 6-12 months. You can make a sketchy business plan or use a ready-made template from the Internet, but the result will be unsatisfactory. Reflection of the main points without a deep study for the future leads to obtaining superficial data that has no practical value.
The main goal of business planning is to assess the prospects of the project at the creation stage, and identify pitfalls and risks that can cause significant damage after a few months. Let’s highlight other goals and objectives:
- correct budgeting: the entrepreneur will know exactly how much money will be needed for marketing or the purchase of goods, therefore, overspending is prevented;
- step-by-step planning of a development strategy with capacity building as forecasted revenue increases;
- setting precise goals, understanding the market and niche in dynamics;
- selection of criteria to be used for reporting and defining key performance indicators;
- attracting investors, 99% of which do not believe in a grand idea that is not supported by facts. A business plan that collects dry data and analytics will help determine the prospects and make a decision on the allocation of funds.
Having drawn up a business plan, an entrepreneur will be able to understand how the business will develop and will be able to correctly convey information to investors and potential partners. The document has a multi-layered structure, during its development it is necessary to carry out different types of analysis, involving both risk management and marketing research. In this regard, an entrepreneur may need the help of several specialists: a marketer, a financier, a market risk analyst, and others.
With a limited budget, the dominant amount of work can be done independently using open sources, online tools, and analytics services: let’s consider the stages of drawing up a business plan and methods that can be involved. The structure is variable, some items can be omitted if they are not of interest to business.
How to Write a Business Plan: Key Steps and Research
At this stage, you need to collect general information about the future company or online store:
- legal form (individual entrepreneur, limited liability company, others);
- niche, information about the founders;
- codes in the all-Russian classifier of types of economic activity (47.91.2 for an online store);
- a brief description of goods and services, pricing.
It is necessary to include information about the goods sold, the goals of starting a business, the history of the project: the block is introductory, allowing you to get an idea about the company and the direction of its activities.
General project analysis
At this stage, it is important to highlight:
- business advantages: how it differs from competitors, what prospects it has, and whether it can compete in terms of product quality and innovative components (competitors do not have a mobile application, you do, which is an advantage);
- disadvantages: small start-up capital, small staff, inability to offer customers discounts that can compete with competitive offers, other;
- development prospects: connecting your own delivery service, opening distribution points, expanding the geography of work with access to the international market;
- risks: the supplier may refuse to cooperate, advertising will skyrocket in price, and the site on a free engine will be blocked. This does not need to include apocalyptic scenarios: only what poses a real threat to business.
To collect and process data, you need to use different types of analysis, for example, SWOT and PEST (they are based on a matrix). Online services such as Serpstat, Be1.ru, and others will help to scout the situation from competitors, helping to collect data by keywords, URL.
Market and competitor analysis
Information about the market can be found in open sources, for example, in research by Rosstat, and reviews of audit companies. We need facts on the basis of which information about e-commerce in a specific niche will be formulated:
- projections regarding development and growth;
- industry initiatives, trends and risks.
It is important to analyze the product that will be sold in the online store, for which you can use data from marketplaces, query planners, and Google Trends.
Information about the products sold and the audience
It is necessary to outline the features of the product and the target audience:
- who the buyer is: age, gender, social status, region of residence, type of audience (direct or indirect);
- What consumer problem does the product solve?
- methods of delivery and storage of goods;
- pros and cons, weaknesses that need to be justified. For example, identical sets of clothes may have different prices: artificial leather is cheaper than natural. The entrepreneur must know how to communicate this to the client;
- is it possible to purchase goods through the dropshipping system;
- how storage and delivery will be carried out.
All questions related to the goods should be recorded in this paragraph. As a reinforcement of the arguments – competitive analysis, links to major analytical agencies, data from marketplaces, results of consumer surveys.
In an online store, you can sell finished goods or products of your own production, in the latter case, you need to make a separate section in the business plan. It is necessary to include the following items, accompanied by implementation costs:
- production capacity: the predicted quantity of goods that a workshop or factory can produce within a day, week, month, quarter, year;
- the quantity of raw materials for the production of a unit or batch;
- process flow diagram;
- equipment required for the launch and its technical characteristics;
- sources of raw materials: own production, Russian or Chinese suppliers;
- contractors, if they are involved, and schemes for moving goods from the warehouse to the client.
Separate issues – personnel and premises. Finding an online consultant is much easier than finding a food technologist or a cosmetic chemist. It is necessary to prescribe in the plan the number of staff, positions, duties and salaries.
Several premises will be required: production, for storage of finished products. If clothes are made, then a standard dry and warm room is needed, products – refrigerators, chest freezers, and an extractor hood. In the case of providing services to third-party clients as part of production, for example, sawing chipboard or tailoring clothes according to individual sketches, additional expenses must be included in the business plan – from attracting personnel to advertising through any channels.
It is worth fixing all risk groups, especially if you plan to receive a loan or attract investors:
- internal, caused by incorrect actions of employees or management;
- production related to marriage and excess residues;
- financial, including a wide range of problems: the supplier untimely shipped raw materials, having received an advance payment, the plan was not fulfilled and there are no funds to close the salaries of the staff;
- insurance: a fire in a factory or warehouse, for example. To minimize the risk, it is worth taking out insurance that will cover the costs in case of force majeure;
- external, which cannot be influenced. We are talking about a drop in demand caused by the unfavorable financial situation in the world, or a crop failure, resulting in a shortage of raw materials.
To assess each risk, a matrix is compiled (similar to SWOT), in which threats and their level of danger are recorded on a scale from 1 to 4-5. Based on the data collected in the matrix, you can choose a risk management strategy: in the future, the indicators will have to be updated at least once every six months.
At this stage, the tools that ensure the viability of the business are selected. These issues need to be resolved before launching an online store:
- choice of organizational and legal form;
- development of a public offer and other documents with which users interact;
- search and rental of premises for production, warehouse, distribution points, showrooms;
- drawing up a list of goods that will be sold in the online store, and a list of additional services;
- equipment of premises for work: equipment, office equipment, repairs, purchase of furniture, other;
- conclusion of an agreement with transport companies, banks and other organizations providing payment, delivery, reporting.
The last step is to compile a list of personnel required for an online store, with a list of responsibilities (it is better to back it up with job descriptions). In addition, it is necessary to fix the pace of financing.
Advertising is a costly event, which directly affects the amount of traffic on the website of the online store and the trust of users. The following marketing components should be included in the business plan:
- target audience broken down into segments: you need to divide consumers into small groups in order to increase reach and make marketing more personalized;
- a unique selling proposition that concisely reflects the advantages of the products;
- positioning strategy involving additional channels: social networks, instant messengers, blogs.
You need to make a list of priority advertising channels that match your goals and budget. Different options will need to be subjected to A / B testing in order to cut off unpromising ones and be able to develop the most effective tools.
The structure of financial planning includes both sources of start-up capital and forecasts for the period after the launch of the online store.
- Sources of start-up capital. It is necessary to fix the channel for the receipt of funds that will be used to open a business: investments, personal, bank loans.
- Expenses. This includes the cost of purchasing goods, creating an online store, launching advertising, paying employees, rent, utilities, and packaging. Some expenses are one-time, for example, creating a website and developing a corporate identity, most are monthly (rent, salaries, advertising). Each expenditure must be recorded in order to prevent unprofitability of the business and misappropriation of funds.
- Income. It is recommended to make a forecast for the next 6-8 months after the launch.
- Unexpected expenses. This should include financial risks: the landlord increased the cost by 10%, the supplier shipped goods of inadequate quality, and others. Financial force majeure must be included in the start-up capital (approximately 15-20% of the total amount).
At the end, payback is calculated: the amount of expenses in relation to income, which allows you to determine the net profit. Online calculators, for example, businesscalculator.pro and the like, will help automate the process: you need to enter data, after which all that remains is to copy the result.
When drawing up a business plan, you need to specify the goals and objectives: the better the definitions and the concept are formulated, the easier it will be to implement them in the future. Each stage should be accompanied by analytics: data from open sources, online services, mystery shopping methods and other types of research are used to collect accurate and up-to-date information. Both external and internal factors of influence are taken into account, separately – possible force majeure, from which no project is insured. If a business plan is needed for personal use and organization of work, then the preparation can be done independently. In the case of obtaining a loan or attracting investments, it is better to delegate work to agency employees or a private specialist who can be found on the stock exchange or bulletin board