Detailed Business Plan

A detailed business plan means ensuring you've covered everything, and double-checked the hard data.

You may have come from our simplified website page on writing a business plan proposal. What follows below is abstracted from our ADVANCED GUIDE TO ECOMMERCE, and gives you an idea of the detailed and practical nature of the e-book. Each of the twelve sections links out to other e-book pages, and these to resource pages, each again with dozens to hundreds of references.

Click here if you'd like to learn more about our ebook, or here to see how it could help you. Please note that other links on this page won't work: it's just a demo page.

Planning the Business: Demo Page

There is no one correct way of writing a business plan, but an ecommerce company will often need to go through most or all of the steps below.

Step One: Check that Ecommerce Will Work

Check that your business will convert to the ecommerce environment.

Step Two: Research the Market Sector

Ecommerce is hard enough, without launching yourself into the wrong market at the wrong time. Research your market sector carefully, both current trading conditions and future indications.

Step Three: Marketing Approaches

Your ecommerce site will usually be built around your marketing approach. There are many that work on the Internet, and many that do not. Even the successful have their pros and cons, and their differing ranges of costs.

Step Four: Find the Appropriate Business Model

You've probably already decided on the approach, but you may want to see what's entailed in the usual categories:

1. selling physical goods

• corporate solutions
• shopping carts
• all-in hosting

2. selling content

• auctions
• portals
• ezines
• ebooks
• newsletters
• distance learning

3. selling for others

• selling advertising
• banner ads
• sponsorship
• affiliates

Step Five: Check Against the Failures

While there's always room for new ideas, some approaches have been shown to fail. The reasons were obvious with hindsight, but it's wise to check your plan doesn't also include some of these nasty pitfalls.

Step Six: Create, Purchase or Franchise?

Most companies will want to create their own business in something as new as ecommerce, but it's worth remembering the alternatives:

1. purchase of existing business
2. take out a franchise

Step Seven: Estimating Sales

Crucial to success are sales. What sort of traffic can you expect, and what percentage will convert into purchases?

Step Eight: Testing the Proposition

Are you really sure the marketing plan will work? Perhaps you should test it.

Step Nine: Financial Modeling

Now comes the detailed modeling of cash flows, break-even points, R.O.I., etc. under the assumptions indicated by research. You need to be as penetrating and objective as possible, as you can be sure your backers will be.

Step Ten: Case Histories

You may to want to look at a few case studies, to check for new approaches and that you've not overlooked something. Also take a look at Getting It Wrong, in case you're tempted to do something similar.

Step Eleven: Finalizing the Plan

Your plan will probably go through several drafts before you're happy that all angles are covered. Funding institutions, which commonly look through thousands of such plans every year, have learned to focus on certain requirements. Make sure you supply them.

Step Twelve: Improving the Plan

You need to test, extend and update your assumptions in the light of trading experience. Some suggestions.

Some Concluding Thoughts

1. However presented, a business plan is only as good as the research and thought that went into it.

2. Internet businesses are no different from other businesses, and fail for the same reasons: under-funding, over-optimistic hopes, insufficiently-researched markets, poor implementation and/or financial control.

3. You'll be safer adopting a tried and tested e-business model — but check that it really does work: business information is notoriously unreliable.

4. Expect your site to take at least a year to generate a proper stream of visitors, and three years to start paying back the investment.

5. Take the planning as far as you can, but don't substitute planning for action. You can only really see if a plan works by trying it out. But go cautiously, and make sure the 'worst case' scenario really is the worst case.

Next Steps

Click here if you'd like to learn more about the detailed business plan in our ebook, or here to return to our website page on on writing a business plan proposal for an ecommerce business.

 

 

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