Revenue:
Expenses:
EBITDA:
Net income:
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Written by Dave Lavinsky
Whether you are planning to start a new ecommerce business or grow your existing ecommerce business, you’ve come to the right place to write an ecommerce business plan.
We have helped over 10,000 entrepreneurs and business owners create ecommerce business plans and many have used them to start or grow their own ecommerce businesses.
Below is a sample of each of the key elements of an ecommerce business plan template to help you write your own business plan:
Business overview.
TrendyFit.com is a startup ecommerce store that sells fitness clothes and accessories for the young, trendy, and stylish individual who enjoys working out and staying fit. The clothes are unique and designed to fit the latest trends of the most popular online YouTube or TikTok celebrities, yet functional and comfortable for working out at the gym or just hanging out. All products are made in the United States, are made with the highest quality fabric, and come with a money-back customer guarantee if the fit or style doesn’t satisfy the customer. TrendyFit.com is sold exclusively online; no retailers will be carrying any TrendyFit.com products.
TrendyFit.com is owned by Devon Ming. Devon will utilize a dropshipping company to receive all orders placed on TrendyFit.com, fulfill the order, and ship directly to the consumers. Devon will also employ a team of three creative designers to develop the website and social media presence by utilizing targeted social media ads and will recruit social media influencers as brand ambassadors. Devon will also employ a team of two customer service representatives to ensure complete customer satisfaction.
The following are the services to be offered by TrendyFit.com:
TrendyFit.com will target all fitness enthusiasts and trendsetters in the United States and internationally. The target market will be social media savvy and spend a large portion of their day browsing through their social media sites. The ideal customer will be young, either in high school or college, a working professional, or a gym rat who frequents the trendiest fitness gyms and establishments.
Devon Ming is a graduate of Harvard University’s Business School and after graduation, has spent the last three years developing the brand image, vision, and researching products for TrendyFit.com. Devon wanted to utilize his Master’s degree in Business Strategy & Marketing, and has devoted all of his time and energy into launching his ecommerce store.
As CEO of TrendyFit.com, Devon will oversee the strategy and development of the company. He will be in constant communication with the dropshipper, creative team, and customer service representatives. He will also focus on strategic growth and the long term vision of the company.
TrendyFit.com is primed for success by offering the following competitive advantages:
TrendyFit.com is seeking $200,000 in debt financing to launch TrendyFit.com. The funding will be dedicated for the down payment with the dropshipping company, three months of payroll expenses for the creative team and customer service representatives, and any business licensing necessary. There will also be funding dedicated to the social media campaign and website development. The breakout of the funding is below:
The following graph below outlines the pro forma financial projections for TrendyFit.com.
Who is trendyfit.com.
TrendyFit.com is a startup ecommerce store that sells fitness clothes and accessories for the young, trendy, and stylish individual who enjoys working out and staying fit. The clothes are unique and designed to fit the latest trends of the most popular online YouTube or TikTok celebrities, yet functional and comfortable for working out at the gym or just hanging out. All products are made in the United States and come with a money-back customer guarantee if the fit or style doesn’t satisfy the customer. TrendyFit.com is sold exclusively online; no retailers will be carrying any TrendyFit.com products.
TrendyFit.com is owned by CEO Devon Ming and will be sold exclusively through a dropshipper that has agreed to fulfill all product orders placed by TrendyFit.com and ship within the continental United States in 2-3 business days and within one week to anywhere outside of the continental United States. Devon has placed his pricing model to be competitive with other popular online fitness clothing retailers, but more affordable as the base of his customers will be young and not have as much disposable income as other individuals outside of the target market.
Devon Ming has spent the last three years developing the brand image, vision, and researching products for TrendyFit.com. After graduating from college with a Master’s degree in Business Strategy & Marketing, Devon has devoted all of his time and energy into launching his ecommerce store.
Since incorporation, TrendyFit.com has achieved the following milestones:
TrendyFit.com will offer the following ecommerce products:
As a result of a significant shift from traditional retail to online retail, the E-Commerce industry is expected to grow to over $835 billion in the next five years. Data shows that consumers prefer the convenience of finding, comparing and purchasing products online easily and quickly.
The industry’s main drivers include faster internet speeds, an increase in mobile internet connections, accelerating per capita disposable income growth and the continued surge in internet traffic volume.
Strong economic conditions will also aid retailers that purchase inventory from overseas, while revenue growth and wage growth are expected to continue their strong trajectory over the next five years as technology continues to boost worker productivity.
The greatest opportunity for growth will come from product categories that were traditionally dominated by brick-and-mortar shopping, including groceries, major appliance products and clothing.
Demographic profile of target market.
Total | Percent | Male Percent | Female Percent | |
---|---|---|---|---|
Total population | 327,167,439 | (X) | (X) | (X) |
AGE | ||||
Under 5 years | 19,646,315 | 6.00% | 6.20% | 5.80% |
5 to 9 years | 19,805,900 | 6.10% | 6.30% | 5.80% |
10 to 14 years | 21,392,922 | 6.50% | 6.80% | 6.30% |
15 to 19 years | 21,445,493 | 6.60% | 6.80% | 6.30% |
20 to 24 years | 21,717,962 | 6.60% | 6.90% | 6.40% |
25 to 29 years | 23,320,702 | 7.10% | 7.40% | 6.90% |
30 to 34 years | 22,023,972 | 6.70% | 6.90% | 6.60% |
35 to 39 years | 21,571,302 | 6.60% | 6.70% | 6.50% |
40 to 44 years | 19,927,151 | 6.10% | 6.10% | 6.00% |
45 to 49 years | 20,733,440 | 6.30% | 6.40% | 6.30% |
50 to 54 years | 20,871,804 | 6.40% | 6.40% | 6.40% |
55 to 59 years | 21,624,541 | 6.60% | 6.50% | 6.70% |
60 to 64 years | 20,662,821 | 6.30% | 6.10% | 6.50% |
65 to 69 years | 17,107,288 | 5.20% | 5.00% | 5.50% |
70 to 74 years | 13,464,025 | 4.10% | 3.90% | 4.40% |
75 to 79 years | 9,378,512 | 2.90% | 2.60% | 3.10% |
80 to 84 years | 6,169,441 | 1.90% | 1.60% | 2.20% |
85 years and over | 6,303,848 | 1.90% | 1.40% | 2.50% |
TrendyFit.com will primarily target the following customer profiles:
TrendyFit.com will face competition from other ecommerce businesses with a similar company profile. A summary of the competitor companies is below.
Nike is a popular consumer products company that designs, develops, and markets their product line of footwear, apparel, equipment, and accessory products worldwide. It designs athletic, casual, and leisure footwear for men, women, and children. Nike’s footwear products include running, training, basketball, football, soccer, sport-inspired urban shoes, and children’s shoes. Nike, named for the greek goddess of Victory, also markets sports-inspired products for children and various competitive and recreational activities. Nike also sells sportswear under the Converse brand. The company, which generates some 60% of sales outside the US, sells through more than 1,090-owned retail stores worldwide and an e-commerce site, and to thousands of retail accounts, independent distributors, licensees and sales representatives. Customers in North America account for about 40% of total revenue.
Nike is headquartered in Beaverton, Oregon and was initially founded as Blue Ribbon Sports in 1962. The company rebranded as Nike in 1972 and the company went public in 1980.
Under Armour makes performance clothes for doing battle on the sports field and in the gym. The company offered collegiate, National Football League (“NFL”) and National Basketball Association (“NBA”) apparel and accessories, baby and youth apparel, team uniforms, socks, water bottles, eyewear and other specific hard goods equipment that feature performance advantages and functionality similar to our other product offerings. The company also makes technology that helps customers track their fitness. It sells online, by catalog, and through retail and outlet stores worldwide. Under Armour operates worldwide but generates most of its revenue in North America.
Under Armour’s marketing and promotion strategy begins with providing and selling their products to high-performing athletes and teams at the high school, collegiate and professional levels. They execute this strategy through outfitting agreements, professional, club, and collegiate sponsorship, individual athlete and influencer agreements and by providing and selling their products directly to team equipment managers and to individual athletes.
Under Armour was founded in Washington, DC, in 1996 and moved to Baltimore, Maryland, two years later. It promoted apparel specifically for athletes, fabric designed to keep them cool when it is hot and keep them warm when it is cold. It continued focusing on the sports world, inking supplier or licensing deals with the NHL, MLB, and USA Baseball in the early 2000s. Under Armour went public in 2005. The following year the company moved into footwear with a line of football cleats; it eventually became the official footwear supplier to the NFL.
Lululemon athletica inc. is a designer, distributor and retailer of lifestyle inspired athletic apparel and accessories. The Company’s segments include Company-operated stores and direct to consumer. Its apparel assortment includes items such as pants, shorts, tops, and jackets designed for a healthy lifestyle including athletic activities such as yoga, running, training, and other sweaty pursuits. It also offers fitness-related accessories. Its direct to consumer segment includes electronic commerce website www.lululemon.com, other country and region-specific websites, and mobile applications, including mobile applications on in-store devices. Its Company-operated stores include approximately 491 stores. Its Company-operated stores are branded lululemon and Ivivva. The Ivivva branded stores specializes in athletic wear for female youth. It also offers weekly live classes, on-demand workouts and one-on-one personal training through its subsidiary.
TrendyFit.com will be able to offer the following competitive advantages over their competition:
Brand & value proposition.
TrendyFit.com will offer the unique value proposition to its clientele:
The promotions strategy for TrendyFit.com is as follows:
TrendyFit.com will blow up social media sites with targeted ads and TrendyFit.com will be seen on all major social media sites (Facebook, Instagram, Twitter, YouTube, TikTok, SnapChat, etc.). A large portion of the funding will go towards purchasing targeted ads and having a creative team to develop the social media advertising.
Devon’s creative team will also develop a professionally designed and visually appealing website to gear customers to when they click on the social media ad. The website will have a gallery of all the available products, shipping information, return information, FAQ’s, etc. The SEO will also be managed to ensure that anyone searching “trendy fitness apparel” or “trendy clothes for young adults”, will see TrendyFit.com listed at the top of the Bing or Google search engine.
TrendyFit.com will recruit a team of social media influencers who have over 100k followers on at least one social media site. By having the brand ambassadors post of TrendyFit.com and wear the clothing, TrendyFit.com will gain a massive amount of followers because one of their favorite internet celebrities is wearing the brand. The brand ambassadors will include a code in their post and will be paid a portion of revenue for whomever purchases from TrendyFit.com using that code.
The pricing of TrendyFit.com will be moderate and on par with competitors so customers feel they receive value when purchasing its products.
The following will be the operations plan of TrendyFit.com.
TrendyFit.com will have the following milestones completed in the next six months.
6/1/202X – Finalize agreement with dropshipping company for them to receive orders directly from TrendyFit.com website, fulfill them, and ship straight to consumers.
6/10/202X – Hire team of Creative Designers to begin design work on the TrendyFit.com website and social media platforms.
7/15/202X – Begin social media campaign for TrendyFit.com.
8/1/202X – Recruit team of brand ambassadors.
8/15/202X – Hire team of Customer Service Representatives.
9/1/202X – TrendyFit.com website officially launches and goes live. Customers are now able to place orders on TrendyFit.com.
Devon Ming will be the Owner and CEO of TrendyFit.com.
Devon Ming is a native of San Jose, California and attended college in Cambridge, Massachusetts at Harvard University. After subsequently being accepted into Harvard’s prestigious business school and graduating, Devon spent the next three years developing the brand image, vision, and researching products for TrendyFit.com. Devon wanted to utilize his Master’s degree in Business Strategy & Marketing, and has devoted all of his time and energy into launching his ecommerce store.
As CEO of TrendyFit.com, Devon will oversee the strategy and development of the company. He will be in constant communication with the dropshipper, creative team, and customer service representatives. He values the customer service representatives as much as the rest of the team because he wants to get involved on customer feedback and any issues they are having. He can then implement those issues and feedback to the creative team and adjust product design if necessary. He will also ensure complete customer satisfaction and make sure the dropshipper is aware of any customer issues with product packaging and delivery.
As TrendyFit.com becomes more and more popular, Devon will be prepared for growth and hire a CFO when necessary and when the company is able to afford to do so. When the company is primed for growth and its dominance in the market is made, Devon and future CFO will strategize on a plan to take the company public.
Key revenue & costs.
The revenue drivers for TrendyFit.com will be the revenue obtained from all products sold on TrendyFit.com.
The cost drivers will be the cost to maintain the dropshipper per the contract. The dropshipper will receive fees on all products it fulfills and ships. Other cost drivers will be the salaries for the creative team and customer service representatives. Lastly, other cost drivers will be the costs for purchasing targeted ads on various social media sites and maintaining the website.
Key assumptions.
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
Income statement.
FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
---|---|---|---|---|---|---|
Revenues | ||||||
Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
Expenses & Costs | ||||||
Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
---|---|---|---|---|---|---|
ASSETS | ||||||
Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
LIABILITIES & EQUITY | ||||||
Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
Share Capital | $0 | $0 | $0 | $0 | $0 | |
Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
---|---|---|---|---|---|---|
CASH FLOW FROM OPERATIONS | ||||||
Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
CASH FLOW FROM INVESTMENTS | ||||||
Investment | ($180,950) | $0 | $0 | $0 | $0 | |
Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
CASH FLOW FROM FINANCING | ||||||
Cash from equity | $0 | $0 | $0 | $0 | $0 | |
Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
You can download our free e-commerce business plan template PDF here . This is a business plan template you can use in PDF format. You can easily complete your ecommerce business plan using our Ecommerce Business Plan Template here .
What is an ecommerce business plan.
An e-commerce business plan is a plan to start and/or grow your online business. Among other things, it outlines your business idea , identifies your target customers, presents your marketing strategies and details your financial projections.
Launching an e-commerce business is an exciting venture with the potential for substantial rewards. To maximize your chances of success, follow this strategic roadmap.
1. Conduct In-Depth Market Research: Thoroughly analyze your target market, identify consumer pain points, and discover product gaps. This research will be the cornerstone of your business strategy, informing product selection, pricing, and marketing efforts.
2. Craft a Compelling Business Plan: Develop a solid business plan outlining your business goals, target audience, unique value proposition, business model, sales strategies, and financial projections. This document will serve as your roadmap and a valuable tool for attracting potential investors or securing loans.
3. Choose a Profitable Product Niche: Select a product niche that aligns with your passion and possesses strong market demand. Consider factors such as competition, profit margins, and scalability when making your decision.
4. Build a Strong Brand Identity: Create a memorable brand name, logo, and visual identity that resonates with your target audience. Develop a compelling brand story to foster customer loyalty and emotional connections.
5. Develop a User-Centric E-commerce Store: Design an online store that is visually appealing, easy to navigate, and optimized for conversions. Prioritize fast loading times, clear product descriptions, high-quality images, and secure checkout processes.
6. Source Reliable Suppliers: Establish relationships with reputable suppliers who can provide high-quality products at competitive prices. Consider factors such as order fulfillment times, shipping options, and return policies.
7. Optimize Pricing Strategy: Conduct thorough market research to determine competitive pricing for your products. Implement effective pricing strategies, such as discounts, promotions, and tiered pricing, to maximize revenue and profitability.
8. Masterful Marketing and Promotion: Develop a comprehensive marketing strategy that leverages various sales channels, including social media, search engine optimization (SEO), email marketing, and paid advertising. Create compelling content that engages your target audience and drives traffic to your store.
9. Fulfill Orders Efficiently: Implement a streamlined order fulfillment process to ensure timely and accurate delivery of products. Consider using order management software and partnering with reliable shipping carriers.
10. Prioritize Customer Satisfaction: Build a strong customer support system to address inquiries and resolve issues promptly. Encourage customer feedback and implement improvements based on customer insights.
By following these steps and continuously adapting to market trends, you can build a thriving e-commerce business that generates sustainable profits.
Clothing Line Business Plan Template Clothing Store Business Plan Template Beauty Supply Store Bookstore Business Plan Template
If you’ve got an exciting concept for an e-commerce venture, it’s crucial to develop a business plan tailored to your online store. This plan will play a pivotal role in ensuring that your vision has the necessary resources to thrive and generate profits. By crafting a comprehensive business plan for your online retail operation, you can effectively pinpoint your target audience, set clear monthly and quarterly sales targets, and significantly enhance the prospects of achieving long-term success in the e-commerce industry.
As a business plan writer and consultant , I’ve authored over 15,000 business plans for various enterprises, many of which have gone on to achieve substantial growth and success. In this article, I offer insights based on my experience and expertise in creating an e-commerce business plan.
An ecommerce business plan is a comprehensive document that outlines the goals, strategies, and financial projections of an online business. It serves as a roadmap for the business, guiding entrepreneurs in making informed decisions and attracting investors.
An executive summary serves as a succinct, one-to-two-page overview of your business, meticulously crafted to inform stakeholders about the essential elements of your comprehensive business plan. It’s a window into your business’s aspirations, strategies, and financial projections, providing a clear roadmap for decision-making and attracting potential investors.
An ecommerce business plan executive summary can look something like this:
Here’s a complete guide on how to write an effective executive summary with examples.
Business overview section beckons for meticulous attention to detail, as it showcases the very essence of your business – your product or service. It’s the stage upon which your offering takes center stage, captivating the audience with its unique value proposition and compelling features. Begin by painting a vivid overview of what you’re bringing to the market, piquing the interest of potential customers and investors alike.
A business overview of Pet Planet online store may look something like this:
Here are 14 profitable eCommerce business ideas you can start today!
Having established the foundation of your business and its purpose, it’s time to embark on a deeper exploration of your plan. The spotlight now falls upon the products and services that will form the cornerstone of your venture. Begin by meticulously listing each offering, accompanied by a clear explanation of its purpose. Address the fundamental question of ‘why’ – why have you chosen to offer these specific products and services ? What unique value do they bring to the market?
Once the products and services have been comprehensively described, it’s time to illuminate the pricing model that will govern your offerings. Assign a clear cost to each service, considering factors such as production costs, market demand, and competitive pricing. Determining pricing, especially for a startup, can be a complex endeavor. Fortunately, sales pricing calculators can serve as valuable allies in identifying the optimal pricing strategy .
A explain your offerings of smart home products may look something like this:
For your E-store business, download this ecommerce business plan template now.
A comprehensive market analysis serves as a compass, guiding your business through the intricate terrain of the marketplace. It begins with a deep understanding of your target audience, delving into their demographics, preferences, and purchasing behaviors. This knowledge empowers you to tailor your products, services, and marketing strategies to resonate with their needs and aspirations.
Here is how analyze the market in our ecommerce business plan.
How to Write Products and Services Section of Business Plan
You have a great business idea. We can help you turn it into a perfect business plan..
An ecommerce business’s marketing plan is its secret weapon, guiding it towards brand awareness, target audience reach , and enhanced sales and revenue. This plan revolves around positioning strategy, acquisition channels, and tools and technology. Positioning strategy determines how you will differentiate yourself in the market, while acquisition channels identify how your target audience discovers your business.
Finally, tools and technology harness the power of innovation to enhance your reach, automate tasks, and gain valuable insights into customer behavior. By crafting and implementing a comprehensive marketing plan , you can effectively build brand awareness, attract your target audience, and drive growth and profitability for your ecommerce venture.
How to Write the Marketing Plan in Ecommerce Business Plan?
Importance of an ecommerce business plan.
The significance of an ecommerce business plan cannot be overstated. It plays a pivotal role in:
Revenue projections can be determined by conducting market research, analyzing industry trends, evaluating your target market size, and considering your pricing strategy. Additionally, factors such as marketing efforts, customer acquisition rates, and competition should be taken into account.
Managing operating expenses effectively involves careful budgeting, identifying cost-saving opportunities, negotiating with suppliers, optimizing operational processes, and regularly reviewing expenses. It’s important to strike a balance between controlling costs without compromising the quality of your products or services.
Funding options for an eCommerce business may include self-funding, loans from financial institutions, angel investors, venture capital, crowdfunding platforms, or partnerships. Consider your business’s financial needs, growth plans, and potential risks when exploring funding options.
The break-even point is the point at which your total revenue matches your total expenses, resulting in neither profit nor loss. It can be calculated by dividing your fixed costs by the contribution margin (selling price per unit minus variable costs per unit). This calculation helps you determine the minimum sales volume required to cover costs.
Tracking CAC and CLV is crucial for understanding the effectiveness of your marketing and sales efforts. CAC helps determine the cost of acquiring a new customer, while CLV estimates the value a customer brings to your business over their lifetime. By analyzing these metrics, you can optimize your marketing strategies and ensure that the cost of acquiring customers aligns with their long-term value.
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A business plan is a blueprint for your business. It sets out where you want to go and how you want to get there.
While you might want to jump right into your ecommerce business and start selling, starting with a business plan is the foundation of a thriving business. Harvard Business Review found businesses that take the time to draft a business plan increase their odds at succeeding by 16 percent. And one study by McKinsey & Company found that 79 percent of executives believe a formal planning process contributes significantly to overall business strategies.
Business plans force you to think critically and strategically and can even help you acquire outside funding for your next big investment.
So, how do you put one together? We’ll go over the different types of business plans, what to include in each section, and a simple business plan template for you to follow.
Business plans are used for different purposes. Sometimes, it’s to get the internal team on the same page, and other times, it’s to attract potential investors. Depending on who’s reading your business plan and what you’re hoping to achieve, you might adapt it to take a different layout. Here are the main types of business plans and what they’re used for:
Executive summary, company description, products and services, industry overview, market analysis, marketing plan, operations and management, financial plan.
This is where you’re introducing your grand idea. What’s the name of the business? Who’s behind it? When was this document prepared? These are all questions the title page should answer.
As far as design goes, keep it simple. Add a company logo (if you have one), but otherwise, keep styling and graphics to a minimum. This is a professional document, not a school project.
We have a lot to cover, and it’s not always necessary to read through every single section. A table of contents makes it easier to find the sections most relevant to the reader or to refer back to sections they want to reread.
The design here should also be simple (you’ll see this is a recurring theme), with a focus on functionality.
Here’s where we start getting into the meat of the business plan. The executive summary is your one-pager, sort of like an elevator pitch. It’s important to hook readers in at this point. If the executive summary doesn’t get them excited, what’s going to motivate them to finish reviewing your plan?
So much to say, so little space to say it. The executive summary needs to be refined and focus on what will get potential investors and lenders jazzed about your idea. What’s so exciting about it? How can you instill faith in your business idea?
Aside from that, it’s important to tease the research you’ve done around making sure this is a viable opportunity. Provide high-level details about:
Tip: Write your executive summary last. Because it’s basically a truncated version of your entire business plan, it’ll be easier to organize your thoughts once you’ve deep-dived into each of the areas below.
Now, it’s time to get into the nitty gritty about your brand – we’re talking really nitty gritty. Details like business name and address, founding date, legal structure, licenses, ownership details, number of employees, and more.
And then the higher-level fun stuff, like company values (an in-depth exploration of your vision and mission), short- and long-term goals, and positioning in the overall market. This is where you show you’ve done your research on competitors .
Here, you define the item that’s going to turn you a profit – in our case, the physical products you plan to dropship. Create a list of each product you plan to offer (and categories, if you have a ton), your pricing strategy and anticipated profit margin, and why customers will want to buy from you.
It’s a good idea to include a bit of information about how products will be manufactured and delivered. Will you be selling direct-to-consumer or through wholesale customers? How will you package and assemble orders? How do the orders get into customers’ hands? And how will you handle returns? These are just a few of the questions you’ll need to answer.
Remember to detail some of the valuable relationships you have in the industry to reinforce your likelihood of success.
This is where we look at the industry as a whole: Who’s operating in the vertical? What do these niche customers want? What are the economic trends for the industry?
Check out sources like Nielsen and Pew Research Center for information about consumer behavior.
You can also look for niche publications to find targeted analyses and reports.
A lot of the research you’ve put together for the above sections will inform your overall market analysis. The market analysis is a summary of the aforementioned, plus more information about your target customer.
When identifying your market, you need to consider if the size of your potential customer base is big enough to generate a profit. Use social media tools like Facebook Audience Insights to estimate the size of your potential customer base. You can also conduct keyword research to get an idea of how many people are searching for your products – and what their projected search volume is for the future.
Not that you know who you’re selling to, it’s time to establish how you’re going to communicate with them. In this section, you need to account for your sales and marketing approach – how you plan to get the word out about your brand and products.
Today’s brands have to use a multichannel approach, reaching potential customers through email , social media, SEO, content, print, and advertising .
Take what you’ve learned about your audience’s pain points and your competitor’s strengths to inform how you’ll communicate your differentiator. Pay special attention to your website and online channels for dropshipping businesses, as these will be the main touchpoints. It’s also a good idea to outline your post-sales customer remarketing and support plan.
Operations and management details the inner workings of your business. A few areas to cover include:
Then, you’ll also want to detail the day-to-day operations. How are orders fulfilled? What tech stack are you using to automate specific tasks? Which reports do you run and how often? What third-party vendors will you be working with? If you’re a new business, include any launch schedules as well.
If you’re presenting your business plan as part of a loan application or other funding request, this is where you make the ask. You’ve already laid why and how your business will be successful, so potential lenders and investors will feel more at ease with the risk. More than a quarter of businesses claim they can’t get the capital they need – you don’t want a poorly written business plan to be the reason you don’t.
Beyond stating and asking for the amount you need, you’ll also need to prove how this extra capital is going to fuel additional growth with your company. Outline where you’ll spend the money, what you’ll be purchasing with it, and how this will generate a return on investment for your biz.
Rounding out your business plan is the appendix. This is where any supporting documentation goes. We tack it on at the end because they can turn a relatively short business plan into an unwieldy, hundreds-of-pages-long document (nobody has time for that).
The appendix is like a reference section. This way, readers who need to validate something from the earlier sections of your business plan can easily navigate to the corresponding documentation.
If your business plan is prepared for a specific entity, include a line that says “Presented to:” followed by the individual and/or company name.
Tip: Keep your executive summary to one or two pages. Remember, this is a highlight reel for what’s to come.
A business plan is necessary not only for third-party individuals, but also for entrepreneurs who need to get their thoughts down on paper. Business plans hold you more accountable and break long-term goals into short-term action plans.
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Jane Vyshnova
1. start with a summary, 2. describe your company, 3. add illustrations of products, 4. analyze the marketing opportunities (target audience), 5. operations in your business, 6. assessment of your finances, 7. proposal for funding.
A business requires proper planning before implementation and any further development. eCommerce business planning makes things easy for startup owners who would also perform the strategy in real life. Sure, an organization plan might sound easy, at first, but there are certain rules to follow once you get going.
Lets talk about it
eCommerce has risen rapidly in 2022. It almost feels like homework or an assignment to write an agenda of your enterprise. Of course, the plan is different for an offline establishment than the online startups.
There is a plan for a venture that consists of all the characteristics in a particular format. Mostly, bank provides a loan based on this write-up to set up the industry. In the U.S., it is recommended to provide a proposal of about 40-50 pages in order to be effective at convincing the authorities.
Such plans are quite formal, detailed and accurate. They may also contain financial analysis with forecasting. A merchandising strategy gives you a direction to follow and helps you analyze whether the idea is profitable or not.
Building a strategy and strictly implementing it is crucial. Listed below are some other points that will explain its importance:
An online store business plan consists of various parts, including a checklist of your business. All these parts can be further subdivided based on the size of the shop and the stuff offered. You must remember that, while describing them, you need to be specific, thorough, and honest. Now, let us go through the components one by one:
An executive summary will elucidate your business in short and will consist of a quick analysis. It also involves the main points of the other parts of the later-described plan. Some of the things that must be included are:
This part will include detailed information of your business. Details that may be a part of this point can be the manufactured items or services that the company is dealing with, the target audience, and the benefits that the company will have (in the form of a brief financial report). In this synopsis, you must include:
You already provided a brief synopsis of your company, so you must have mentioned the amenities which you are going to provide. Now, this segment will provide a detailed view of the service within the company. The major points you must incorporate are:
This is an important component that should be written carefully. You must perform deep research regarding your targeted clientele. The supply method should also be included in the scrutiny. This part requires you to give finer details concerning the clients who will buy from you.
The main wings to be covered are:
You need a plan for your operations to work properly. There are different directions in which your work will be distributed and you have to make sure everything goes smoothly. The agenda will organize all your operations based on priority and departments:
A financial report of your past sales or a report of your investments should be included. This is important for stakeholders, as they must be convinced that this deal will bring them profit. The following should be considered:
If this report is meant for you to receive funding from stakeholders, you should provide a brief paragraph stating how important it is for your enterprise to receive the finances, as well as a reason why they should give you the funds (on what basis):
It is not enough to know the points that must be considered. Visual memory has been said to be the best. We will show you some examples that will assist you to understand the exact structure.
Preparing the plan by just writing it out makes it look boring, so you may add some color to it by adding figures. It makes understanding the financial stuff easier. Also, such a presentation is visually attractive and more preferred. In your financial analysis section, you can add several figures using a special online chart tool that will explain what is going on with your company.
Here is an exemplar of a business plan for an online shopping website - you may go through the whole business plan template by clicking here . It is this plan, for Instant, that also provides solutions related to software.
Your financial report should look something like this. You should divide your budgets into several parts like past financial status and projections, and present it in such a tabular form. Of course, some figures within those tables will also prove to be helpful.
Here is a perfect business plan for eCommerce startup that was intended for an investor to finance the organization. It is quite detailed and well presented, and it is also a startup plan. They mentioned their requirements in point with the costs, which makes it clear how important the funding is to the company and how much profits can be earned. A full version of the template is available here .
Here is a PDF version of a perfect business agenda by pipedream.com. It is well explained and quite detailed with more points and some other details. You can just click the link and review their plan.
Read more in our blog The Best E-commerce Books for Online Entrepreneurs in 2023 .
Once you perceive the importance of an agenda and how to develop one, the important points might change according to size and the merchandise you are selling. A business plan for an online shop will show you the right direction and performance. Some of the extra pieces of a business plan can include competition, strategic partners, website and technology, and an overview of the management team.
If you encounter any questions regarding your plan, you can contact Dinarys to get assistance with these types of solutions. If you are stuck when starting from scratch on the plan, rest assured that the team will show you the right direction. Just contact us to write your scheme and get going!
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Published Oct.12, 2016
Updated Sep.14, 2024
By: Cynthia Turner
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Table of Content
Are you looking for startup ideas that can easily be initiated and run from home? Well, you must then consider ecommerce business as after the prevalence of coronavirus pandemic internet sales have really shot up.
E-commerce business is based on selling things through the Internet. The line of products may vary from electronic possessions such as e-books or audio/videos to actual physical entities including clothes, furniture, toys, vehicles, etc.
To guide you about each and every aspect of this business, we are providing here a sample business plan for ecommerce of a recent startup ‘TradeE’.
2.1 the business.
TradeE will be a licensed B2C ecommerce startup that will be run through its ecommerce website. The online enterprise will be owned by Diana Blunt.
The business will sell downloadable products throughout the world, however, delivery services for physical items will be provided in just three cities, San Jose, San Francisco, and Oakland.
Management is an important aspect of business as it ensures that everybody clearly knows what they have to do and there is a check on every employee to ensure a perfect workflow.
Starting an online business usually seems easy since you don’t have to personally interact with customers and employees. However, this too can end up in a mess if you are failed at managing it.
Online management is a challenge because your ecommerce site and online transactions are always prone to hackers, frauds, and copycats. To make sure that your and your customer’s data is protected and everything goes like you intended, you must write a detailed business plan.
If you are looking for how to write a business plan for online store you can take help from here.
Diana will govern the business herself. To manage the online store , the company will be hiring social media manager, digital marketing director, virtual assistants, IT specialists, and delivery personnel.
The groups that are expected to be our major customers will mostly comprise of young, adults, and senior citizens. We believe that college students, working moms and dads, and senior members of households will surely find many things to buy from us.
Our target is to become a renowned online store in our service areas. We believe in generating profits by serving our customers with our best.
3.1 company owner.
Diana Blunt is the owner of TradeE. She has recently completed her MBA from the Lucas College and Graduate School of Business.
During the years of her graduation, she was constantly involved in learning emerging disciplines and skills such as graphic editing and ecommerce management.
Besides being tech-savvy she is also a great communicator, leader, and tourist.
Diana had always wished to start a business that can be expanded or contained whenever she wants. Viewing her digital skills and interests she decided to go for an online shop.
Another factor that helped her in this decision was her extreme love for traveling. She wanted to start a business that she can govern without being actually present there.
From this sample business plan ecommerce you can see how the online business TradeE was planned and executed.
Before starting the business, the company owner will do research on which product line should be chosen to get the most recognition. The company will also collaborate with other online businesses to buy their products and sell them on the company’s platform.
Since the business will mainly sell toys, clothes, bags, and accessories, a storage room will be taken on rent to keep the things.
Following the making of business plan ecommerce template, the company will hire the required personnel. TradeE will seek the services of a web developer and IT specialist to create a website that fulfills the criteria of secure transactions, foolproof client database, and copy-protected access. It will be ensured that the web design is user-friendly and descriptive.
The business owner aims at hiring the digital marketing team and director two weeks before the launch so that ecommerce business marketing plan could be executed.
Legal | $218,000 |
Consultants | $0 |
Insurance | $45,000 |
Rent | $20,000 |
Research and Development | $30,000 |
Expensed Equipment | $51,000 |
Signs | $3,500 |
Start-up Assets | $340,000 |
Cash Required | $350,000 |
Start-up Inventory | $68,000 |
Other Current Assets | $215,000 |
Long-term Assets | $295,000 |
Start-up Expenses to Fund | $610,000 |
Start-up Assets to Fund | $2,001,700 |
Assets | |
Non-cash Assets from Start-up | $2,409,700 |
Cash Requirements from Start-up | $198,200 |
Additional Cash Raised | $40,000 |
Cash Balance on Starting Date | $31,000 |
Liabilities and Capital | |
Liabilities | $35,000 |
Current Borrowing | $0 |
Long-term Liabilities | $0 |
Accounts Payable (Outstanding Bills) | $46,000 |
Other Current Liabilities (interest-free) | $0 |
Capital | |
Planned Investment | $2,500,100 |
Investor 1 | $0 |
Investor 2 | $0 |
Other | $0 |
Additional Investment Requirement | $0 |
Loss at Start-up (Start-up Expenses) | $97,800 |
Deciding your line of products is the most important part of your startup as it depends on your surroundings, budget, and target customers as well. Rather than being just fashion ecommerce or specifically jewelry ecommerce TradeE has decided to introduce itself as a multiple product line company.
The large range of products offerings by TradeE includes:
Clothes: We will provide all departments of garments for men, women, and children ranging from casual dresses, suits, daily wears to sports & swimming outfits. All the dresses, shirts, T-shirts and suits offered by us will be branded and designer-made.
Bags & Accessories : We will offer branded bags and clutches and a range of accessories including wristwatches, jewelry items, hats, sunglasses, keyrings, mobile covers, socks, gloves, umbrellas, hair accessories, and stationery.
Household Items : We will offer small household items such as home linens, baking dishes, baby items, and kitchen essentials.
Gifts: We will also provide packed as well as un-packed gifts to be given to people of all age groups.
Downloadable Products: We will also be selling e-books, audio and video files, games, movies, stock images, etc.
If you are planning e commerce business you must not ignore the fact that market analysis is equally important like all other aspects of a business. Before setting out for a new ecommerce venture, you must analyze where and how you can find the most people to turn into your customers.
Especially if your online business is based on physical products you must figure out which areas for delivery services will be suitable and which cities can help you in getting a maximum number of customers.
Analyzing and discovering your target people is also essential in the case when you are making decisions about social media campaigns. Your approach to promote your startup can only be effective if you know the age groups and the mindset of your target customers.
Ecommerce businesses are flourishing day by day because people found it convenient to have their favorite thing in their hands by a mere click. Another reason for increased sales is that many people avoid visiting shops personally after the pandemic has hit the earth.
The figures reported by IBISWorld supports the fact that one can’t be at a loss if they devise a comprehensive and workable ecommerce project plan before starting. According to the market research company, 234,699 online businesses are successfully running in the United States. A 10.2% growth rate in the ecommerce businesses has been observed in the past five years and a 6.9% growth rate has been predicted for this year that is 2020.
TradeE has categorized its target customers into three groups so that their corresponding choices, preferences, and needs could be thoroughly studied. It is advisable to also classify your intended clientele when you are writing a business plan for ecommerce startup.
The detailed marketing segmentation of our target audience is as follows:
5.2.1 Young & Adults: Our major target group will comprise of young people. They are expected to avail most of our downloadable products such as e-books, music, games. Moreover, we also believe them to be the biggest buyers of our clothes, bags, and accessories.
In addition, moms, the homemakers are also included in this category. Thus, we are confident that the major customer of our home items such as house linens and eating utensils will also be catered for in this category.
5.2.2 Senior Citizens: Our second target group comprises of senior citizens. They are expected to avail all of our services. The elderly persons will also purchase household items as they usually are devoted to homemaking.
Moreover, we expect this respectable category of our customers to be the biggest purchaser of our gifts, as grandpas and grandmas are the ones who want to make kids and grandkids feel special on various events.
5.2.3 Teens & Kids: Our third target group is comprised of children and teens. They are expected to purchase accessories such as wristwatches, mobile covers, stationery, and jewelry items. We also think that they could be the major consumers of our audio and video files and games.
Potential Customers | Growth | ||||||
Young & Adults | 44% | 35,000 | 40,000 | 47,000 | 58,000 | 64,000 | 10.00% |
Senior Citizens | 34% | 25,000 | 32,000 | 43,000 | 51,000 | 56,000 | 10.00% |
Teens & Kids | 22% | 13,000 | 15,000 | 22,000 | 29,000 | 34,000 | 11.00% |
10% |
Business targets as specified by TradeE to be achieved over a certain period of time are given here:
Our prices are in similar ranges as those of our competitors. However, we will keep on providing several discounts to our repeat customers.
If you are going to start any ecommerce company such as an online boutique you must focus on your marketing plan because that’s what makes an ecommerce site successful.
Without a detailed and perfect marketing strategy, it would be very difficult for you to reach out to people who are most likely to purchase your products.
Considering its importance, TradeE will start executing its sales strategy plan two weeks before the launch.
Our biggest competitive advantage is that we are providing a very vast product line so to increase the niches of our target groups. All our products will be authentic, and replaceable within 2 days. Moreover, we’ll be offering several discounts in the startup phase to attract more and more customers.
And finally, another thing that will be in our favor is that we will be able to deliver items fast as we are offering delivery services in the three cities that are really close to each other.
Unit Sales | |||
Clothes | 56,000 | 59,360 | 62,922 |
Bags, Accessories & Gifts | 46,000 | 48,760 | 51,686 |
Household Items | 35,000 | 37,100 | 39,326 |
Downloadable Products | 26,000 | 27,560 | 29,214 |
Unit Prices | Year 1 | Year 2 | Year 3 |
Clothes | $65.00 | $75.40 | $87.46 |
Bags, Accessories & Gifts | $44.00 | $51.04 | $59.21 |
Household Items | $36.00 | $41.76 | $48.44 |
Downloadable Products | $28.00 | $32.48 | $37.68 |
Sales | |||
Direct Unit Costs | Year 1 | Year 2 | Year 3 |
Clothes | $59.00 | $60.00 | $62.00 |
Bags, Accessories & Gifts | $45.00 | $46.00 | $48.00 |
Household Items | $30.00 | $31.00 | $33.00 |
Downloadable Products | $23.00 | $26.00 | $27.00 |
Direct Cost of Sales | |||
Your planning for electronic commerce couldn’t be justified as ideal unless you include in it the ways you will adopt to hire the most competent persons.
Since most of the employees of TradeE will be freelance workers, the company will conduct rigorous online interviews to find the most suitable employee.
The company’s owner will perform the duties of CEO and HR Manager. The list of company’s required staff, as well as their jobs descriptions, is given below:
Co-Manager | $22,000 | $24,200 | $26,620 |
Digital Marketing Officer | $18,000 | $19,800 | $21,780 |
Social Media Manager | $18,000 | $19,800 | $21,780 |
IT Specialist/Web Developers | $52,000 | $57,200 | $62,920 |
Graphic Designer | $16,000 | $17,600 | $19,360 |
Content Writer | $14,000 | $15,400 | $16,940 |
Drivers | $150,000 | $165,000 | $181,500 |
Customer Care Representative | $14,000 | $15,400 | $16,940 |
One of the biggest advantages of online businesses is that even if you starting an ecommerce business from scratch you won’t need a huge amount to invest. Your major spending will be the salaries of your employees and rent of your storeroom.
So in order to analyze expected profits or future investments and identify the resources that are available or could be needed in the coming days, you must prepare a financial plan.
Your financial plan should also include the details of at what financial status you would prefer to contain or expand your product line or service area.
The financial plan for TradeE is given as follows:
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 8.01% | 8.32% | 8.70% |
Long-term Interest Rate | 8.20% | 8.60% | 9.15% |
Tax Rate | 24.20% | 26.04% | 27.50% |
Other | 0 | 0 | 0 |
Monthly Units Break-even | 5340 |
Monthly Revenue Break-even | $136,000 |
Assumptions: | |
Average Per-Unit Revenue | $245.00 |
Average Per-Unit Variable Cost | $0.64 |
Estimated Monthly Fixed Cost | $169,000 |
Other | $0 | $0 | $0 |
TOTAL COST OF SALES | |||
Expenses | |||
Payroll | $304,000 | $334,400 | $367,840 |
Sales and Marketing and Other Expenses | $130,000 | $138,000 | $146,000 |
Depreciation | $2,200 | $2,400 | $2,700 |
Leased Equipment | $0 | $0 | $0 |
Utilities | $3,200 | $3,700 | $4,200 |
Insurance | $2,000 | $2,300 | $2,600 |
Rent | $3,200 | $3,500 | $4,000 |
Payroll Taxes | $40,000 | $42,000 | $45,000 |
Other | $0 | $0 | $0 |
Profit Before Interest and Taxes | $145,400 | $1,211,379 | $2,528,269 |
EBITDA | $145,400 | $1,211,379 | $2,528,269 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $29,080 | $242,276 | $505,654 |
Net Profit | $116,320 | $969,103 | $2,022,615 |
Net Profit/Sales | 1.52% | 10.30% | 17.48% |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $51,000 | $55,080 | $61,200 |
Cash from Receivables | $11,000 | $11,880 | $12,830 |
SUBTOTAL CASH FROM OPERATIONS | |||
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $0 | $0 | $0 |
SUBTOTAL CASH RECEIVED | |||
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $35,000 | $38,000 | $42,000 |
Bill Payments | $18,000 | $21,000 | $23,000 |
SUBTOTAL SPENT ON OPERATIONS | |||
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
SUBTOTAL CASH SPENT | |||
Net Cash Flow | $13,000 | $15,000 | $20,000 |
Cash Balance | $25,000 | $29,000 | $34,000 |
Assets | |||
Current Assets | |||
Cash | $250,000 | $280,000 | $308,000 |
Accounts Receivable | $21,000 | $23,520 | $26,436 |
Inventory | $4,000 | $4,480 | $4,990 |
Other Current Assets | $1,000 | $1,000 | $1,000 |
TOTAL CURRENT ASSETS | |||
Long-term Assets | |||
Long-term Assets | $10,000 | $10,000 | $10,000 |
Accumulated Depreciation | $17,000 | $19,040 | $21,420 |
TOTAL LONG-TERM ASSETS | |||
TOTAL ASSETS | |||
Liabilities and Capital | Year 4 | Year 5 | Year 6 |
Current Liabilities | |||
Accounts Payable | $16,000 | $17,920 | $20,142 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
SUBTOTAL CURRENT LIABILITIES | |||
Long-term Liabilities | $0 | $0 | $0 |
TOTAL LIABILITIES | |||
Paid-in Capital | $28,000 | $29,000 | $30,000 |
Retained Earnings | $62,000 | $67,580 | $74,338 |
Earnings | $185,000 | $201,650 | $221,815 |
TOTAL CAPITAL | |||
TOTAL LIABILITIES AND CAPITAL | |||
Net Worth | $260,000 | $283,400 | $311,740 |
Sales Growth | 7.01% | 7.77% | 8.61% | 3.00% |
Percent of Total Assets | ||||
Accounts Receivable | 9.11% | 10.09% | 11.18% | 9.80% |
Inventory | 5.45% | 6.04% | 6.69% | 9.90% |
Other Current Assets | 2.52% | 2.79% | 3.09% | 2.40% |
Total Current Assets | 151.00% | 152.00% | 154.00% | 158.00% |
Long-term Assets | 11.30% | 12.01% | 12.65% | 12.00% |
TOTAL ASSETS | ||||
Current Liabilities | 4.46% | 4.50% | 4.54% | 4.34% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
Total Liabilities | 7.12% | 7.18% | 7.24% | 7.38% |
NET WORTH | ||||
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 96.30% | 98.90% | 101.67% | 99.00% |
Selling, General & Administrative Expenses | 93.07% | 95.58% | 98.26% | 97.80% |
Advertising Expenses | 1.77% | 1.82% | 1.87% | 1.40% |
Profit Before Interest and Taxes | 42.90% | 44.06% | 45.29% | 33.90% |
Main Ratios | ||||
Current | 39.01 | 39.8 | 40.795 | 32 |
Quick | 34.2 | 34.8 | 35.67 | 33 |
Total Debt to Total Assets | 0.31% | 0.22% | 0.13% | 0.40% |
Pre-tax Return on Net Worth | 75.03% | 78.78% | 82.72% | 75.00% |
Pre-tax Return on Assets | 90.80% | 95.34% | 100.11% | 111.30% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | 33.40% | 34.44% | 35.50% | N.A. |
Return on Equity | 57.03% | 58.80% | 60.62% | N.A. |
Activity Ratios | ||||
Accounts Receivable Turnover | 7.5 | 7.8 | 7.9 | N.A. |
Collection Days | 100 | 100 | 100 | N.A. |
Inventory Turnover | 33.4 | 35.07 | 36.8 | N.A. |
Accounts Payable Turnover | 16.08 | 16.5 | 16.98 | N.A. |
Payment Days | 27 | 27 | 27 | N.A. |
Total Asset Turnover | 2.5 | 2.7 | 2.76 | N.A. |
Debt Ratios | ||||
Debt to Net Worth | -0.03 | -0.04 | -0.05 | N.A. |
Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
Liquidity Ratios | ||||
Net Working Capital | $218,000 | $230,208 | $243,100 | N.A. |
Interest Coverage | 0 | 0 | 0 | N.A. |
Additional Ratios | ||||
Assets to Sales | 0.82 | 0.85 | 0.93 | N.A. |
Current Debt/Total Assets | 1% | 1% | 0% | N.A. |
Acid Test | 27.8 | 30.1 | 31.1 | N.A. |
Sales/Net Worth | 2.2 | 2.1 | 2.3 | N.A. |
Dividend Payout | 0 | 0 | 0 | N.A. |
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Anthony St. Clair
12 min. read
Updated August 1, 2024
Free Download: Sample Amazon FBA Business Plan Template
When figuring out how to turn eCommerce into your side hustle or primary business, Amazon FBA can be your ticket to starting a small business on Amazon . With over 4.1 billion products sold by independent sellers on Amazon in 2022 alone, Amazon’s marketplace for online sellers is growing, competitive, and full of opportunity .
In order to take full advantage of everything Amazon’s ecosystem has to offer your business, you should create an Amazon FBA business plan . Your Amazon business plan can help you think through your vision, understand the competition, identify opportunities, and foresee challenges. The better your plan, the better your chance at success as an Amazon FBA merchant.
When your business sells products to a customer online, those orders go through a fulfillment process, such as:
A business can manage this on its own. On a small business or solopreneur scale though, that can mean figuring out logistical steps that take up a lot of time. For example, where will you store the products you sell? Warehouse space can be costly—and there’s only so much room in your apartment or garage.
Plus, once you have the products ready to go, they need to be securely packaged, including padding to protect during bumps and drops during shipping. You’ll have to figure out how the order gets on its way to the customer. Do you schedule regular pickups from UPS or FedEx? Are you making lots of trips to the post office, waiting in line, or setting up the customer’s shipping address and shipping options to generate labels?
Or, Amazon can do it all for you. The “FBA” in Amazon FBA is short for “Fulfillment by Amazon.” Instead of you taking care of the fulfillment steps above, you can pay a fee to Amazon , typically a flat monthly fee plus a per-order fee. Instead of managing orders, you can focus on sales strategy, suppliers, marketing, and the nitty-gritty of building, expanding, and profiting from your Amazon FBA eCommerce store .
As you develop your business plan, you can review Amazon’s FBA program , see how it fits your business goals, and evaluate the program’s costs and opportunities in your planning.
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For starters, focus overall on your business. Amazon FBA is a way to solve a problem and fulfill a need in your business, but it isn’t the entirety of your business. As you start working on your Amazon FBA business plan , think through what sort of business you are building. Amazon FBA can have a role, but so might other sales and distribution channels. Here are five things to keep in mind as you write your Amazon FBA business plan.
Your business will be selling products online. So, what products will you be selling—and what sort of seller will you be? Depending on the types of products you want to sell, you’ll make different decisions about choices such as product sourcing and your overall business model. Here are three models to consider : Reseller, Private Label, or Proprietary.
A reseller sources products from other companies and then sells them to customers on Amazon. Being a reseller can be the easiest and cheapest way to get started in Amazon FBA. Startup costs can be as low as $500, depending on the products you are purchasing for reselling.
However, the downside is that other companies can just as easily follow the same model (and sometimes Amazon itself sources or creates products that may be the same as yours). It may also be challenging to figure out how to stand out in the market. If focusing on a reseller model in your Amazon business plan, examine competitors, similar products currently on the market, and what sort of marketing and promotional strategies can help you build sales and a customer base.
If your focus is on building a recognized product brand and growing customer loyalty, while primarily sourcing pre-made products you can resell, a private label Amazon business model could be a good fit for your business. Manufacturers worldwide specialize in creating unbranded products that other companies can brand and sell. Also known as a “white label” product, building your business around private label sourcing can help you develop a distinctive product brand that customers look for.
Consider focusing your business plan around the characteristics you want your brand to embody. That can help you identify white label products that are a good fit. A private label Amazon FBA business model may also require more capital, for investing in labeling, packaging, brand development, and marketing.
For the Amazon seller who wants to go all-in on business, marketing, product development, and commerce on Amazon and beyond, developing and selling your own proprietary products can have both the most work and investment, but also the best chance to stand out and profit in the market.
Developing your own product will require the most up-front investment and capital. Your business plan can discuss the risks and challenges your business might face during product development and getting products to market, and how you are prepared to meet those challenges.
Creating your own product also opens up opportunities to patent that product. Plus, it can be easier to sell your product in other stores or channels beyond Amazon.
As you make your business plan, examine each type of seller and its impact on your value proposition. How can you use a seller type to offer value to the customer and win sales? What problem will you be solving in the market, and how will one model help you more than another
Between Amazon and its third-party sellers, combined Amazon carries over 353 million products . In 2018 alone, Amazon sales accounted for 49.1% of all US online retail spending, and over 20 million people visited the site each month.
While being an Amazon FBA seller can be an easy way to get your eCommerce business underway, it is also extremely competitive. As you develop your business plan, examine:
Key to your business plan and your chances for success are figuring out a certain sweet spot of what products you can sell that will make you the right amount of profit. When evaluating products to offer, also take a look at how much that product is searched on Amazon , how much competition there is for it or similar products, how easy it is to source your products from suppliers, and the right price point.
Inside Amazon FBA, you can estimate the fees Amazon will charge you, but there will be other costs to account for in your business plan too. From social media to paid advertising, there are many ways to get the word out about your products. Your business can pay for keyword-based advertising on Google and Amazon. You can also work on posting to social media, as well as advertising or paying for influencer content creation on platforms such as Facebook, Instagram, TikTok, and Pinterest.
As you develop and implement an ads strategy, keep an eye on your average cost of sale (ACOS): Aim to keep it low enough to preserve profits, usually with an ACOS of 10% or less.
Also consider your overall sales strategy not just for Amazon, but beyond. What other retailers would be a good fit for your product? Will you have your own in-house eCommerce store on your business’s website? Having multiple sales channels can make your business more durable and help your operation weather ups, downs, competition, or other problems.
Another part of your sales strategy is sourcing. Many Amazon FBA sellers source products from other countries, such as China. Understanding your suppliers and the cost to acquire your products can help you make out your business’s costs, revenues, and financial forecasts.
Depending on factors such as your business model, startup capital, and what products you plan to sell, you can then use your business plan to understand the financial path your business can take. As you develop the financials portion of your plan, try to find good estimates for costs such as:
Combined with an understanding of your profit margins and product costs, you can map out realistic financial projections as you start the business and begin operating it day in and day out. Running the numbers in your business plan can help you determine if your Amazon FBA business could be financially profitable. It can also help you evaluate if you need to take a fresh look at your idea to see what you need to change to make the business more viable.
You’ll need to consider sales and fulfillment milestones that help ensure that you are appropriately anticipating demand and not overspending or overestimating need. Outlining who you’ll be partnering with (vendors/3rd party fulfillment and quality assurance providers) will also be necessary here.
Succeeding in your Amazon FBA business also depends on knowing what goals you want to meet, and who you will be working with. Some of those milestones might be quantitative, such as an amount of gross revenue achieved or an overall number of sales.
Other milestones can speak to factors that can help you optimize your Amazon business. For example, if your business increases sales to a specified level, you might be able to reduce your unit costs by ordering more products at a time. Those volume discounts can add up quickly to significant additional net revenue on your bottom line.
Your overall business decisions throughout the year also depend on understanding market conditions, supply chain pressures, upcoming trends, and more. The key is to figure out how to best estimate demand, stock levels, pricing, and other costs, while overspending on inventory or advertising, and also not overestimating the market’s need or desire for your products.
Along with Amazon, your business will also rely on other stakeholders or third parties. If you are running the business with partners, or if you have employees or work with independent contractors, you’ll need to take into account their costs, compensation, and expectations. Noting your partners, such as suppliers, quality assurance providers, retail partners (in addition to Amazon FBA), and other service providers such as attorneys and accountants in your business plan helps keep those relationships top of mind.
As you work on your business plan and get your startup off the ground, there will be other questions to answer, challenges to meet, and opportunities to evaluate. Here are a few Amazon FBA tips that can help you get more out of your business and your Amazon business plan.
Amazon is a powerful retail channel, but they are not the only game. Plus, having only one sales channel makes your entire operation dependent on only one company, which can put your profits or business at risk. Amazon can be a vital part of your eCommerce strategy. You can better weather business ups and downs, and potentially draw on more revenue streams, by having sales and marketing channels outside of Amazon. Develop active social media presences, partner with other retailers, and also look at selling directly through your own website. When you diversify your sales channels, you can spread risks and potentially grow sales more than with Amazon alone.
Just like online content can be optimized for search engines such as Google, your Amazon product listings can be optimized to better fit customer expectations and Amazon’s own algorithms:
In your packaging and online correspondence, ask customers to leave an honest review about your products. You can learn a lot about how your product is or is not meeting their expectations. Plus, customer reviews can be gold mines for other product features or benefits to include in your Amazon description.
From Amazon Ads to enhanced A+ content , Amazon has a diverse range of features that sellers like you can put to work for your business. As part of your business planning, estimate a budget for advertising on Amazon, and also for creating visual and text content that can be incorporated into your product page’s A+ content. These are just a few of the many features that can help your Amazon FBA business sell more . Also check out Amazon’s global selling , multi-channel fulfillment , FBA customer service .
Get started by downloading our free Amazon FBA business plan PDF can give you the template you need to start setting up your Amazon FBA business—and start building sales and customers around the world. This Amazon business plan is just one of hundreds of free business plan templates that have been time-tested by our team and by thousands of entrepreneurs all over the world.
Amazon is a competitive marketplace used by hundreds of thousands of sellers around the world. However, barriers to entry are low, and there is an opportunity for new sellers to find their niche in this market as well. Your Amazon FBA business plan can help you think through the challenges and opportunities that you’ll face in today’s eCommerce environment. You’ll also be able to identify potential business challenges—as well as milestones and opportunities that can help you both monitor your business’s progress and see where you can grow.
Whatever you want to sell on Amazon, get going: Get your free Amazon FBA business plan today .
Anthony St. Clair is a business copywriter, author of the Rucksack Universe travel fantasy series, and a craft beer writer specializing in Oregon. Learn more at anthonystclair.com.
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Why You Should Create a Business Plan. We know that starting an ecommerce business is exciting, and it can be tempting to jump right in without constructing a business plan. READ: PLEASE DON'T DO THIS. If you haven't put your ideas, questions and concerns on paper, then you haven't given your business model enough thought.. Taking the time to write a business plan might seem like a lot ...
Strategize your marketing plan. Create a sales plan. Outline legal notes and financial considerations. 1. Give an executive summary. An executive summary is a one-to-two-page overview of your business. The purpose of an executive summary is to let stakeholders know what the business plan will contain.
Add brief details of your ecommerce business, target market, problem, solution, service model, business goals, and financial figures in this section. Adapt a narrative tone to make it interesting and keep it highly informative. And, most importantly keep it within a limit of 1-2 pages. Say goodbye to boring templates.
The real version of Growthink's Ultimate Ecommerce Business Plan Template is much more than a fill-in-the-blanks template. That template professionally guides you step-by-step so you can quickly, easily and expertly complete your business plan. Perhaps most importantly, it includes complete financial projections.
The Table of Content of "Ecommerce Business Startup Guide: Checklist & Business Plan": Before you start. Research product ideas and target markets. Competitive market research. Initial brand development. Set up a business and complete plan. Plan your website content and launch. Email marketing automation (As needed)
Follow these tips to quickly develop a working business plan from this sample. 1. Don't worry about finding an exact match. We have over 550 sample business plan templates. So, make sure the plan is a close match, but don't get hung up on the details. Your business is unique and will differ from any example or template you come across.
Create brief descriptions of the fulfillment, shipping, and payment collections processes. Now for some nitty-gritty stuff. Your operational plan may feel like the "boring" part of your business plan, but it's important - and it'll give your creative brain a break for a little while. 4. Market Analysis.
Ecommerce Business Plan Template. Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their ecommerce businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an ecommerce ...
E-commerce business plans are essential for anyone looking to start an e-commerce business or to expand the business they already have. An e-commerce business plan template makes the process much easier and faster because it lays out all of the key components and all you need to do is input your business's information.
Executive Summary. Every business plan needs an executive summary. Usually, you write the summary last, after you've fleshed out all the details of your plan. The executive summary isn't a repeat of the full plan—it's really just a brief outline that should be 1-2 pages at the most. When you're getting introductions to investors, you ...
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Writing an eCommerce business plan is one of the first steps you should take if you're thinking about starting an online business. Whether you're opening an online-only shop or adding an eCommerce component to your brick and mortar store for an omnichannel retail experience, there's never been a better time to sell online.. The numbers don't lie: since 2014, the number of digital ...
E-commerce business plan examples. 1. Draft an executive summary. An executive summary outlines everything included in your business plan. It's the first section of your plan—which makes it important because it should capture the reader's attention and entice them to read through the rest of your ideas.
Tips for Writing an Effective Ecommerce Business Plan. Conduct Thorough Research: Gather comprehensive data and insights into your target market, competitors, and industry trends. Set Realistic Goals: Establish achievable and measurable goals that align with your business's resources and capabilities. Update Regularly: Review and update your ...
A business plan is a blueprint for your business. It sets out where you want to go and how you want to get there. While you might want to jump right into your ecommerce business and start selling, starting with a business plan is the foundation of a thriving business. Harvard Business Review found businesses that take the time to draft a business plan increase their odds at succeeding by 16 ...
The capital will be used for funding capital expenditures, manpower costs, marketing expenses, and working capital. Website design/build and startup business expenses: approximately $120,000. Working capital: approximately $310,000 to pay for Marketing, salaries, and lease costs until firstcry.com reaches break-even.
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Assessment of your finances. 7. Proposal for funding. Examples of an eCommerce Business Plan Template. Example #1. Example #2. Example #3. Conclusion. A business requires proper planning before implementation and any further development. eCommerce business planning makes things easy for startup owners who would also perform the strategy in real ...
How do I password-protect a Sample Business Plan For Ecommerce Startup PDF? Most PDF editing software allows you to add password protection. In Adobe Acrobat, for instance, you can go to "File" -> "Properties" -> "Security" to set a password to restrict access or editing capabilities. Are there any free alternatives to Adobe
2.1 The Business. TradeE will be a licensed B2C ecommerce startup that will be run through its ecommerce website. The online enterprise will be owned by Diana Blunt. The business will sell downloadable products throughout the world, however, delivery services for physical items will be provided in just three cities, San Jose, San Francisco, and ...
The key feature of an ecommerce business is undoubtedly its digital platform. The platforms should be able to handle bulk traffic and be compatible with web browsers such as Mozilla, Firefox, IE5+, Netscape, etc., and mobile operating systems such as iOS and Android. The ecommerce business'swebsite should have complete data backup on an
Updated August 1, 2024. Free Download: Sample Amazon FBA Business Plan Template. When figuring out how to turn eCommerce into your side hustle or primary business, Amazon FBA can be your ticket to starting a small business on Amazon. With over 4.1 billion products sold by independent sellers on Amazon in 2022 alone, Amazon's marketplace for ...
Ecommerce Business Plan and Startup Checklist - Free download as PDF File (.pdf), Text File (.txt) or read online for free. The document outlines the launch plan and checklist for an ecommerce business over 14 weeks. It includes setting up the business structure and licenses, sourcing products, creating a website, and launching initial marketing campaigns through content creation, social media ...