Is my business idea any good? Are people interested in the products I sell? Is there a large enough market to sustain me and my competitors in business? A business plan will help you answer those and many other key questions before you dive into the creation or expansion of an online store.
To put it simply, having an eCommerce business plan is essential to your success. So, whether you’re ready to take your business online or expand your existing online business, preparation is critical. This is especially the case in an industry that changes as quickly as eCommerce.
Your eCommerce business is far more likely to succeed if you take the time to plan and test the market. In fact, research by Harvard Business Review found entrepreneurs who write formal plans are 16% more likely to achieve viability than otherwise identical non-planning entrepreneurs.
Payflex outlines some key things to consider when putting together a business plan. These include:
Focus on the customer
The success of your eCommerce store is directly linked to the customer experience. This might seem fairly obvious, after all, they are your bread and butter. But merchants often dive in without conducting the proper due diligence on who they are selling to. Getting new customers is already a challenge in this increasingly crowded ecommerce space. Consumers are choosing businesses who take the time to know them and who care about their needs. In fact, research from Deloitte, found companies with a customer-centric business model are 60% more profitable. Therefore, taking the time to really understand your audience will give your business plan an edge over the competition. Look at factors such as user experience on your website, social proof, payment options, delivery, support and personalisation.
Do your homework on your competitors
They say knowledge is power, and if you sell online, you certainly need to know who your ecommerce competitors are. With a thorough competitive analysis as part of your initial business plan, you’ll be better positioned to actually compete. And while on the surface, this seems like an easy step, in reality, understanding competition requires a lot of research and nuance. Having a thorough understanding of who your competitors are, and what they are offering, can help you to make your products, services and marketing stand out in a highly competitive market.
Develop your value proposition
In its most basic form, a value proposition is essentially a summary of how your product or service benefits your customers and sets you apart. HubSpot found that while 69% of businesses have established value propositions, 54% of companies do nothing to optimise them. Without a differentiating factor in your business plan, your offering runs the risk of becoming lost in a sea of eCommerce merchants.
Adopt a holistic view of your business plan
It’s easy for business leaders to get caught up in the finger details of every day business. But, not focusing on the ‘big picture’, puts merchants at risk of implementing strategies without any real framework to guide these decisions. Adopting a holistic view that takes into account all components is essential for developing a comprehensive and objective business plan.
One of the most important things you will need to determine in your business plan is how you will deliver products to your customers. You can either decide to fulfil your orders in-house or via a third party vendor. Retailers like Amazon have set the bar incredibly high for eCommerce fulfillment with 83% of consumers less likely to repurchase from a retailer after a negative delivery or shipping experience.
The location of your business, your business size and the type of products you sell will dictate your fulfillment strategy. Make sure you weigh up the pros and cons carefully before making the decision. Bottom line, your fulfillment strategy is an important competitive differentiator. Therefore, it should form an important part of your business plan.
An essential component of your success
A quality business plan must clearly demonstrate the direction your business wishes to take. At the same time it must also allow enough room to adjust to any situation that may affect operations. The most important thing is to be realistic about your strengths as well as your shortcomings. Don’t stick your head in the sand when it comes to potential red flags or roadblocks. This could also damage your credibility among both suppliers and customers.
The crux of the matter is a robust business plan will give your eCommerce business the greatest chance of success. So, instead of diving in without any concrete strategy, formulate a business plan that will provide you with a foundation for sustainable business growth, help you crystallise your ideas, and earmark your priorities.