How to create an ecommerce business plan

Why create an ecommerce business plan?

• Achieve a better understanding of your business;
• Identify new business opportunities;
• Identify new business threats;
• Set more realistic budgets and targets;
• Win budget & support inside your business.

What’s in an ecommerce business plan?

• Executive summary;
• Situational analysis;
• Statement of goals;
• Strategy statement;
• Description of tactics;
• P&L summary.

The planning process

When creating an ecommerce business plan, follow this simple process…

1. The situation

Gather information. Review the internal and external factors affecting your business; this describes the world your business operates in. The better your understanding, the more relevant your strategy. Gather information with a view to summarising the important points. Below are some suggestions I’ve incorporated into the 7Ps of eMarketing.

External:

• Your company’s competitors: list them and their competitive threats to your business;
• Customers: country, gender, type, visit reason (eg: info only, buy for a friend, retailer, wedding list…);
• New technology: eg: Magento 2, Artificial Intelligence, 5G;
• The Law: eg: GDPR, Distance selling regulations, cross border trading;
• Political situation: eg: potential new International trade deals, Change of Govt, Political certainty;
• Market trends: New business models & tactics (eg: Consolidated returns, White label marketplace stores, personalisation, localisation.);
• Society trends: eg: Leisure society, Environmentalism, Animal welfare, Fair trade, Corporate responsibility.

Internal:

• People: Your team, other relevant staff;
• Organisational structure: Who does what in your web team? Who are the business decision makers?
• Finance: Cash flow, budget, current Website performance;
• Product/Services: What are you selling? (Sku volume, product types);
• Price: price ranges, AOV’s;
• Physical evidence: Stores, warehouses, offices?
• Partners: What entities are you partnering with?
• Place/Access: Website, Return-to-store, etc;
• Promotion: Social media, Google ads, affiliates, banner ads, email marketing, print ads, inserts;
• Process: How is the product/service provided to customers?

SWOT:

Conclude your situational analysis with a SWOT: a summary of your business’s Strengths, Weaknesses, Opportunities & Threats. The points in your SWOT must be addressed in your strategy. Examples….

2. Goals

Your goals may have been set for you, by directors or other factors. Now’s your chance to review, enrich them and ensure they are “SMART”.
All of your goals must be:

• Specific: Target a specific area for improvement;
• Measurable – Quantify an indicator of progress;
• Assignable: Specify who will do it;
• Realistic:  State what results can realistically be achieved, with the available resources;
• Time-related: State when the targets will be achieved;

Example SMART goal: “In 12 months, we will grow French market revenue by 20%”.

3. Strategy

Write a mission statement: You’ve already done most of the hard work. Summarise your goals and general strategic approach in a simple statement, which you can quickly and effectively communicate.

4. Tactics

Your strategy describes the broad approach you will take, tactics describe the actions you will undertake to achieve the strategy.

By including annual performance targets and costs for each tactic, your list will help you determine your plan’s budget and performance targets, which you’ll define in the “P&L” section.

ACR planning

Tactical plans can be determined in many different ways. I like to organise my list of tactics into Acquisition, Conversion & Retention (ACR). ACR addresses how a plan will attract visitors, convert them into customers and encourage them to buy again.

Summary description and KPIs for your tactics

Along with a summary description and details of any suppliers you plan to use, it’s essential to set performance targets. Ask suppliers to help set realistic targets for each KPI they have responsibility for, this encourages them to buy in to the success of the business.
Here’s are some example of tactic summaries – you’ll need to create something like this for each tactic.

Here’s an example of a Conversion tactic summary and it’s KPIs.

5. P&L

A profit and loss projection sets KPI targets for your tactics and defines the financial viability of your business plan for the next 12, 24 or 36 months. These targets will help detect any issues inside your online business.

6. Summarise

You’ve gathered a lot of information, now reduce it into a format that’s more accessible to stakeholders.

Executive summary

You should be able to reduce and summarise your entire strategy into a single side of A4, at a readable font size.

Presentation

Recommendation: reduce the strategy to 14 slides.

Alternatively, if the focus of the presentation is to get budget approved, you should use the “10/20/30 Pitch deck rule”. The presentation cannot have more than 10 slides, must not take longer than 20 minutes and must not exceed 30 bullet points.

7. Measure & review

Use the KPIs in the tactics tables and the P&L statement to measure the success of your plan over time. You can use my ecommerce weekly report template or create your own.

A weekly report

Maintaining a weekly report encourages you to look for problems, find new opportunities and provides an opportunity to communicate the success of your plan to key stakeholders on a regular basis.

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