Writing a business plan proposal
Practical aspects of writing a business plan proposal for an
ecommerce business.
Planning the Ecommerce Business
Most e-businesses fail because:
-
the business plan is not properly researched and implemented,
-
ecommerce is not sufficiently integrated with current business,
and
-
proper advice is unsought — not for reasons of cost
or limited time, but because the company doesn't see a need
until too late.
The business plan has to be sound because:
-
you'll not manage effectively without targets and strategies
clearly set out.
-
funding agencies won't invest without having detailed plans
to examine.
-
a good plan ensures that the vital questions are properly
addressed.
-
the plan forms the basis of the records you'll have to submit
to the tax authorities.
A good business plan is one that works, and therefore has to
be specific, simple, realistic and complete.
How complete? To raise venture capital, or secure a large private
placing, you'll need to cover all aspects at length, backed up
by documented research. If, on the other hand, yours is a part-time
business needing no additional finance, then the plan can be a
few pages. But one thing is essential. A business plan is a support
and guide in the years ahead — which means it absolutely
has to be clearly thought-out and honest. Skimp or kid yourself,
and grief will surely follow.
A business plan will be tested against and extended to meet new
circumstances and opportunities, but initially at least will cover
four areas:
-
Nature of Business
-
Marketing
-
Financial Control
-
Management
Taking these in turn, you'll be providing answers to:
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Nature of the Business
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what are you selling?
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what's the company name and domain name?
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how is it going to make money, precisely?
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start-up date?
-
projected turnover and profit? By when?
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overall goals and objectives?
-
Marketing
-
how are your products or services better/cheaper/more
attractive?
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how will you advertise, on and offline?
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what's your pricing policy?
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what's the competition, and how will you cope?
-
what are the prospects in your market sector?
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Financial Control
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who's supplying the startup or seed capital?
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how long before the business is profitable?
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what's the break-even point in services or units sold?
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for the first 3 years what are the projected
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cashflows
-
income statements
-
balance sheets
-
Management
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how many hours per month will it take to:
-
fulfill orders
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update content
-
market the site
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handle the accounts
-
produce reports
-
who's doing this work, and at what cost?
-
what staff need to be recruited, and when?
Practicalities
Who's going to write the business plan? These are your options:
1. Write it yourself, researching
information from the Internet and public/business libraries.
Use a simple spreadsheet like Microsoft's Excel for the cashflows.
2. Do the research yourself, but employ a software
package to set out the document in a more professional manner.
3. Apply to US
and UK Government bodies, who provide free business guidance.
4. Contact your local university/business school and see if MBA
students are prepared to research and write your plan. You'll
need to come to some arrangement regarding fees and costs, but
the process will be cheaper than employing a professional company,
and give you fuller control.
5. Look in your local business directory to find a firm of professionals.
From $3,000 to $10,000 is the going rate, but this may be money
well spent to have the job done properly and inspire confidence
in potential investors.
Cost Scales
1. You can build a ecommerce site at practically no cost at all,
given ample time and some HTML/programming expertise. Ecommerce-digest
indeed lists the Internet sites providing all the information
you need for this approach, but you should remember that:
-
it's difficult to produce a really professional-looking site
with freeware HTML authoring packages and the graphics tools
provided "free" with Windows.
-
you'll probably not get decent traffic nowadays without paying
to be listed in Yahoo and other search engines.
2. Most ecommerce merchants strive for a balance between outsourcing
and company time. A popular approach among SMEs is to:
-
spend nothing but their own time on ecommerce conception,
business plan, market research and choice of payment system.
Perhaps also for most of marketing and running the business,
and for site build if design is straightforward.
-
outsource the following:
3. More ambitious companies will:
4. Established corporations, and companies setting up major ecommerce
sites, ecommerce portals, e-auctions and e-gambling sites will
have costs along these lines:
-
consultants to appraise ecommerce conceptions. ($'0,000)
-
market research.($'00,000)
-
business planning.($'000)
-
site build and online payment integration. ($'00,000)
-
search engine optimization. ($'0,000)
-
general marketing. ($'00,000)
-
server/website staffing. ($'00,000/year)
Some Concluding Thoughts
1. Remember that the business plan is only as good as the research
and thought underpinning it.
2. Internet business plans are no different from other business
plans, and fail for the same reasons: under-funding, over-optimistic
hopes, insufficiently-researched markets, poor implementation
and/or financial control.
3. Most Internet businesses take a year to generate a proper
stream of visitors, often longer.
4. In the early stages, before you have researched matters properly,
remember the old adage: Half the revenues, and double the time
spans and expenditures: if the figures still look good then the
business may be worth pursuing.
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.
More Information
Please consider our ADVANCED GUIDE TO ECOMMERCE if you need detailed
information on writing a business plan proposal that really
will work.
An overview . . .
- The Internet's most detailed guide to ecommerce: 185,000 words
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- Over 100 case studies, both general and dotcom failures.
- Notes on ecommerce strategies and use of the resource listings.
- Tutorials on AdSense, ePublishing, eBay, RSS feeds and commercial
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- Ten up-to-date surveys of ecommerce prospects worldwide.
- Insider information based on Internet research and our own
studies.
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- Comes as an interlinked webpage ebook (2 Mb) and as a pdf
document (9 Mb). The one-time subscription covers both.
Click here for
a full contents listing of the current edition.
Our
$37.50 e-book comes with a 30-day, no-questions-asked guarantee.
If not fully satisfied, then simply email us for a prompt and
full refund. Material is continually being checked and extended,
and purchase includes free updates.
The e-book comes as interlinked webpage compilation for ready
reference (2Mb) and as a PDF document (9 Mb, 550 pages) for extended
reading. The PDF document can be read on all platforms, but the
interlinked webpage compilation can only be read on Windows platforms
( Windows 98x, Me, 2000 and XP machines).
Our July 2008 update will include an extensive tutorial on using
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