A business plan is a document that sets out objectives and strategies for your business. Whether you are just starting up a new online business of your own or looking to transfer your existing brick and mortar business to online, a business plan serves as a road map, and it will make your preparation process much easier. It's a document that you always refer to as you carry out your missions and make sure you're not getting off the track.
Without a business plan, things can go wrong easily such as;
- You will lose track of your revenues and expenses right from the start and risk running out of cash.
- You will be easily swayed by other new opportunities and invitations.
- Any unexpected turn of events can confuse you, overwhelm you or upset you and make you lose focus on tasks or vision for your business.
Online Business Factors To Consider
Online business planning is different from what used to be a traditional business planning, and there are a few vital factors concerning the online environment, such as
- Internet security issues
- Sever technology
- Payment clearance system
- Cost of running your business online
- Understanding your audience - demographics and purchasing habits
- Advantages and disadvantages of doing business online
- Designing and other technical issues - DIY or outsource
- Usability in the eyes of users/customers
- Communication methods (email, chatbot, live chat)
- Potential profit/loss margins
Common Business Plan Questions
Forbes explains about questions when creating a business plan (Top 10 Questions Every Business Plan Should Answer)
- What is the need that your business exists? - define what problem you are solving with your business.
- How will your business satisfy the need? - your objectives that deal with the need in the market.
- What makes your company stand out? - your business's competitive advantage.
- Who are the key players? - yourself, if you work on your own, but how do you keep yourself on top of things?
- Size of the market? - as well as the attractiveness and profit potential.
- Who are your target customers - segment your audience and define your strategy.
- What's your most effective strategy? - how best to reach your target audience.
- Financial situation? - revenue, pricing structure, costs.
- Investment required? - Identify what you need and how much it will cost.
- Break-even point? - your financial projections and forecasts.
The above 10 points can be considered when creating a business plan.
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Essential Sections To Consider When You Create A Business Plan For Online Business
Here are some of the essential elements that should be included in your online business plan.
Executive Summary
Overview of your business plan. It should reflect your "About Us/Me" section of your website therefore it should clarify what your business is about in a concise but well-written manner. It should include;
- Your business name (it may be different from your website name) and the location.
- The purpose of the plan
- Products or services that you offer
- Mission statement - what kind of vision you aim for and what kind of quality you provide.
Company Description
This section should also reflect "About Us/Me" section of your site, but a little bit more detail about your business, such as;
- The legal status
- History of your business - if you are just starting up, then state so.
- What your stakeholders are (main customers and suppliers)
- Your business goals (short term as well as long term) and how you plan to grow financially as well as your position within the industry.
Products
#WrongProducts
When planning a business, naturally you'll determine whether what you're selling or going to sell is profitable in the long term. If it's not sustainable, you should be considering alternatives for the future. Therefore you should plan things such as;
- Description of your product/service and what kind of benefits it provides users/customers.
- Your competitors in the same industry and how your business can survive.
- How you can carry out your research and development for new products/services.
Financial Planning
The advantage of online business when working for yourself is often the fact that little initial investment is required. It will help if you create a projected plan for the best-case scenario and the worst-case scenario involving the total sales and costs. For example;
- Total sale of T-shirts 1,000 x $10 = $10,000
- Total cost of sale (T-shirts bought from a wholesaler) 1,000 x -$5 = -$5,000
- Advertising cost -$1,500
- Total web tools -$500
- Net Profit $3,000.
Market Analysis
You have started or are going to start your particular business for a reason; because you know the market and you think you will sell. But by doing more in-depth research and understand what has been going on in the industry as well as the future landscape, your position will become much clearer. You can include your market analysis in your plan such as;
- Historical and current market statistics
- Who the targeted customers are, including size and demographics
- Competitors' performances, their strengths, and weaknesses
Operating Plan
By stating how you're going to implement your strategy into your business, you'll be able to focus on achieving your goals in short-term as well as long-term. Your operating plan should include;
Your operation cycle (from acquiring supplies to delivering finished products, for example)
- How you're going to promote your business
- Projected pricing plans - increase/decrease in sales and costs
- Operating (working) hours and places
- Details about your main obstacles and how you get around them
Conclusion
When all your business plan is in place, you can take the necessary steps accordingly as you carry out daily tasks. With a proper business plan, you can make sure that your strategies are on a good path and maintain a successful online business in years to come.
