Start-up | |
Requirements | |
Start-up Expenses | |
Legal | $2,000 |
Stationery etc. | $400 |
Website Development | $30,000 |
Insurance | $1,000 |
Rent | $2,000 |
Marketing | $120,000 |
Expensed Equipment | $0 |
Other | $0 |
Total Start-up Expenses | $155,400 |
Start-up Assets | |
Cash Required | $64,600 |
Start-up Inventory | $80,000 |
Other Current Assets | $0 |
Long-term Assets | $50,000 |
Total Assets | $194,600 |
Total Requirements | $350,000 |
FireStarters will offer young customers the following youth-oriented products and clothing:
According to the U.S. Census Bureau the population of teens (age 12-17), in 1999 was 23.4 million, which represents 8.6% of the total U.S. population. Teenagers influence $324 billion in spending annually, have $151 billion in disposable income, spend $24 billion annually, and will spend $1.2 billion online by 2002. Teens spend an average of $82 per week on entertainment, fashion, food, and technology. These young people dubbed “Generation Y” dominate almost all facets of popular culture and are the fastest-growing demographic under age 65.
Specialty youth clothing and products has grown into a billion dollar niche in the clothing industry. The popularity of the Internet with young people has been well documented and has generated the launching of a number of online stores by companies selling to that market segment. Most of these stores have retail outlets in large urban areas that serve as the promotional vehicles for online shopping.
The Internet is an accessible shopping tool for our target population. 64% of teens nationwide use the Net at home. The majority of teens, 55%, consider using the Internet better than watching TV. Families with teens are more likely to have Internet access than other households.
Online shopping by teenagers between 13 to 18 years in age is expected to total about $300 million this year (2000) and is accelerating at about twice the rate of online shopping by adults. By 2003, teenagers are expected to spend $2 billion annually online. By 2004, a clear majority of young consumers will shop online. The top five purchases made by teens [online], based on sales volume, are CDs/cassette tapes, clothing, books, computer software, toys and clothing.
Over the past ten years, there has been a profound change in population dynamics in the U.S. The non-metropolitan population has been growing at almost the same rate as the urban population. The West Coast, Midwest, and the Northeast have the largest growth rate. Today, there are millions of young people who don’t live near a large urban center that offers the diversity in clothing products that the youth culture demands. This has created a small market niche for businesses to sell clothing and products to young people who live outside the urban areas. This is particularly true in communities with a major college located in the community.
Currently, only regional malls offer access to the fashion and styles that young people want. Unfortunately, the focus of these mall stores is only on the mainstream of the youth market. Alternative clothing and products are rarely available outside the urban area. This is true because the companies that create the clothing and products are small and sell primarily through urban specialty shops.
FireStarters will capitalize on the following characteristics of Generation Y:
It is FireStarters’ plan to bring alternative fashion and products to small-town America via the Internet. We will create a business identity that will capitalize on the subculture affiliation and attitude of our target customers.
FireStarters will focus marketing on two type of non-metropolitan communities:
Market Analysis | |||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||
Potential Customers | Growth | CAGR | |||||
Communities (100,000 and 150,000) | 10% | 6,000 | 6,600 | 7,260 | 7,986 | 8,785 | 10.00% |
Communities/College (>80,000) | 10% | 3,000 | 3,300 | 3,630 | 3,993 | 4,392 | 10.00% |
Total | 10.00% | 9,000 | 9,900 | 10,890 | 11,979 | 13,177 | 10.00% |
FireStarters’ will have a two track strategy.
FireStarters’ competitive advantage is offering product lines that make a statement but won’t leave you broke. The major brands are expensive and not distinctive enough to satisfy the changing taste of our target customers. FireStarters offers products that are just ahead of the curve and so affordable that our customers will return to the website often to check out what’s new.
Another competitive factor is that products for this age group are part of a lifestyle statement. FireStarters is focused on serving youth outside the metropolitan areas. We want to represent their style and life choices. We believe that we will create a loyal customer base that will see Firestarters as part of their lives. To facilitate that connection, our website will have a chat section where our customers can share what is happening in their communities as well as comment on our products and what we should add to our product line in the future.
Sales will be flat for the first 45 days of operation. We anticipate that sales will begin at this point and increase as our marketing campaign progresses.
The following is the sales forecast for three years. First year monthly sales forecast is shown in the appendix.
Sales Forecast | |||
Year 1 | Year 2 | Year 3 | |
Sales | |||
Clothing | $209,000 | $280,000 | $340,000 |
Shoes | $131,350 | $210,000 | $250,000 |
Products | $55,300 | $120,000 | $160,000 |
Total Sales | $395,650 | $610,000 | $750,000 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
Clothing | $63,000 | $90,000 | $110,000 |
Shoes | $25,100 | $44,000 | $60,000 |
Products | $12,640 | $30,000 | $40,000 |
Subtotal Direct Cost of Sales | $100,740 | $164,000 | $210,000 |
Jill Stranton will manage the daily operations of FireStarters. Bobbi Hanson will be FireStarters’ buyer and will also be responsible for marketing. Jill and Bobbi have over fifteen years of experience in the retail clothing industry.
Jill has been the manager of Wild Women Clothing for five years. Wild Woman Clothing is a mail-order business that focuses on young urban women ages 18 to 35. She supervised a staff of 10 and was extremely effective in keeping the business cost effective as sales grew 50% over a two year period. Prior to her employment with Wild Woman Clothing, Jill was manager of Atomic Age Fashions, a women’s clothing shop, for three years.
Bobbi has been a buyer for Glamour Imports for the past four years. Glamour Imports sells to over 200 women’s shops nationwide and generated over 10 million in sales last year. In addition to her experience as a buyer, Bobbi was a marketing associate for Gap from 1994-1997.
FireStarters will have a staff of five:
Personnel Plan | |||
Year 1 | Year 2 | Year 3 | |
Manager | $42,000 | $45,000 | $50,000 |
Buyer/Marketing | $42,000 | $45,000 | $50,000 |
Order Processor/Website Manager | $33,600 | $36,600 | $40,000 |
Processing Staff (2) | $60,000 | $66,000 | $72,000 |
Total People | 5 | 5 | 5 |
Total Payroll | $177,600 | $192,600 | $212,000 |
The following is the financial plan for FireStarters.
The monthly break-even point, based on forecasted monthly expenses and costs, is shown in the table and chart below.
Break-even Analysis | |
Monthly Revenue Break-even | $27,657 |
Assumptions: | |
Average Percent Variable Cost | 25% |
Estimated Monthly Fixed Cost | $20,615 |
The following table and charts present the projected profit and loss for three years. First year monthlies are in the appendix.
Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $395,650 | $610,000 | $750,000 |
Direct Cost of Sales | $100,740 | $164,000 | $210,000 |
Other Production Expenses | $0 | $0 | $0 |
Total Cost of Sales | $100,740 | $164,000 | $210,000 |
Gross Margin | $294,910 | $446,000 | $540,000 |
Gross Margin % | 74.54% | 73.11% | 72.00% |
Expenses | |||
Payroll | $177,600 | $192,600 | $212,000 |
Sales and Marketing and Other Expenses | $0 | $130,000 | $150,000 |
Depreciation | $7,140 | $7,140 | $7,140 |
Leased Equipment | $0 | $0 | $0 |
Utilities | $6,000 | $6,000 | $6,000 |
Insurance | $6,000 | $6,000 | $6,000 |
Rent | $24,000 | $24,000 | $24,000 |
Payroll Taxes | $26,640 | $28,890 | $31,800 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $247,380 | $394,630 | $436,940 |
Profit Before Interest and Taxes | $47,530 | $51,370 | $103,060 |
EBITDA | $54,670 | $58,510 | $110,200 |
Interest Expense | $13,830 | $12,750 | $12,570 |
Taxes Incurred | $10,110 | $11,586 | $27,147 |
Net Profit | $23,590 | $27,034 | $63,343 |
Net Profit/Sales | 5.96% | 4.43% | 8.45% |
The following table and chart is detail the projected cash flow for three years. The appendices include first year cash flow monthly estimates.
Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $395,650 | $610,000 | $750,000 |
Subtotal Cash from Operations | $395,650 | $610,000 | $750,000 |
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 | $395,650 | $610,000 | $750,000 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $177,600 | $192,600 | $212,000 |
Bill Payments | $103,957 | $364,975 | $463,540 |
Subtotal Spent on Operations | $281,557 | $557,575 | $675,540 |
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 | $21,600 | $1,800 | $1,800 |
Purchase Other Current Assets | $19,800 | $19,800 | $19,800 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $322,957 | $579,175 | $697,140 |
Net Cash Flow | $72,693 | $30,825 | $52,860 |
Cash Balance | $137,293 | $168,118 | $220,978 |
The following table shows the projected balance sheet for three years.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $137,293 | $168,118 | $220,978 |
Inventory | $6,270 | $10,207 | $13,070 |
Other Current Assets | $19,800 | $39,600 | $59,400 |
Total Current Assets | $163,363 | $217,926 | $293,448 |
Long-term Assets | |||
Long-term Assets | $50,000 | $50,000 | $50,000 |
Accumulated Depreciation | $7,140 | $14,280 | $21,420 |
Total Long-term Assets | $42,860 | $35,720 | $28,580 |
Total Assets | $206,223 | $253,646 | $322,028 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $9,633 | $31,822 | $38,661 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $9,633 | $31,822 | $38,661 |
Long-term Liabilities | $128,400 | $126,600 | $124,800 |
Total Liabilities | $138,033 | $158,422 | $163,461 |
Paid-in Capital | $200,000 | $200,000 | $200,000 |
Retained Earnings | ($155,400) | ($131,810) | ($104,776) |
Earnings | $23,590 | $27,034 | $63,343 |
Total Capital | $68,190 | $95,224 | $158,567 |
Total Liabilities and Capital | $206,223 | $253,646 | $322,028 |
Net Worth | $68,190 | $95,224 | $158,567 |
Business ratios for the years of this plan are shown below. Industry profile ratios based on the NAICS code 454111, Electronic Shopping, a subcategory of the Retail Trade, are shown for comparison.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 54.18% | 22.95% | 7.56% |
Percent of Total Assets | ||||
Inventory | 3.04% | 4.02% | 4.06% | 37.60% |
Other Current Assets | 9.60% | 15.61% | 18.45% | 29.04% |
Total Current Assets | 79.22% | 85.92% | 91.13% | 78.59% |
Long-term Assets | 20.78% | 14.08% | 8.87% | 21.41% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 4.67% | 12.55% | 12.01% | 38.50% |
Long-term Liabilities | 62.26% | 49.91% | 38.75% | 19.42% |
Total Liabilities | 66.93% | 62.46% | 50.76% | 57.92% |
Net Worth | 33.07% | 37.54% | 49.24% | 42.08% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 74.54% | 73.11% | 72.00% | 34.85% |
Selling, General & Administrative Expenses | 68.58% | 68.68% | 63.55% | 16.95% |
Advertising Expenses | 0.00% | 21.31% | 20.00% | 2.50% |
Profit Before Interest and Taxes | 12.01% | 8.42% | 13.74% | 1.10% |
Main Ratios | ||||
Current | 16.96 | 6.85 | 7.59 | 1.79 |
Quick | 16.31 | 6.53 | 7.25 | 0.70 |
Total Debt to Total Assets | 66.93% | 62.46% | 50.76% | 65.04% |
Pre-tax Return on Net Worth | 49.42% | 40.56% | 57.07% | 2.65% |
Pre-tax Return on Assets | 16.34% | 15.23% | 28.10% | 7.59% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | 5.96% | 4.43% | 8.45% | n.a |
Return on Equity | 34.59% | 28.39% | 39.95% | n.a |
Activity Ratios | ||||
Inventory Turnover | 2.45 | 19.91 | 18.04 | n.a |
Accounts Payable Turnover | 11.79 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 20 | 27 | n.a |
Total Asset Turnover | 1.92 | 2.40 | 2.33 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 2.02 | 1.66 | 1.03 | n.a |
Current Liab. to Liab. | 0.07 | 0.20 | 0.24 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $153,730 | $186,104 | $254,787 | n.a |
Interest Coverage | 3.44 | 4.03 | 8.20 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.52 | 0.42 | 0.43 | n.a |
Current Debt/Total Assets | 5% | 13% | 12% | n.a |
Acid Test | 16.31 | 6.53 | 7.25 | n.a |
Sales/Net Worth | 5.80 | 6.41 | 4.73 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
Sales Forecast | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | |||||||||||||
Clothing | 0% | $0 | $8,000 | $10,000 | $21,000 | $24,000 | $26,000 | $17,000 | $25,000 | $30,000 | $30,000 | $10,000 | $8,000 |
Shoes | 0% | $0 | $3,000 | $3,350 | $5,000 | $8,000 | $11,000 | $14,000 | $16,000 | $24,000 | $25,000 | $10,000 | $12,000 |
Products | 0% | $0 | $1,500 | $1,800 | $2,000 | $4,000 | $6,000 | $5,000 | $7,000 | $13,000 | $4,000 | $5,000 | $6,000 |
Total Sales | $0 | $12,500 | $15,150 | $28,000 | $36,000 | $43,000 | $36,000 | $48,000 | $67,000 | $59,000 | $25,000 | $26,000 | |
Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Clothing | $0 | $3,000 | $4,000 | $5,000 | $6,000 | $7,000 | $5,000 | $7,000 | $10,000 | $10,000 | $4,000 | $2,000 | |
Shoes | $0 | $1,000 | $1,200 | $1,000 | $1,500 | $2,000 | $3,000 | $4,000 | $5,200 | $2,000 | $2,000 | $2,200 | |
Products | $0 | $400 | $500 | $600 | $1,000 | $1,500 | $1,250 | $1,800 | $2,000 | $890 | $1,200 | $1,500 | |
Subtotal Direct Cost of Sales | $0 | $4,400 | $5,700 | $6,600 | $8,500 | $10,500 | $9,250 | $12,800 | $17,200 | $12,890 | $7,200 | $5,700 |
Personnel Plan | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Manager | 0% | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 |
Buyer/Marketing | 0% | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 | $3,500 |
Order Processor/Website Manager | 0% | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 |
Processing Staff (2) | 0% | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 |
Total People | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | |
Total Payroll | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 |
General Assumptions | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
Current Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Tax Rate | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | |
Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pro Forma Profit and Loss | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | $0 | $12,500 | $15,150 | $28,000 | $36,000 | $43,000 | $36,000 | $48,000 | $67,000 | $59,000 | $25,000 | $26,000 | |
Direct Cost of Sales | $0 | $4,400 | $5,700 | $6,600 | $8,500 | $10,500 | $9,250 | $12,800 | $17,200 | $12,890 | $7,200 | $5,700 | |
Other Production Expenses | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $0 | $4,400 | $5,700 | $6,600 | $8,500 | $10,500 | $9,250 | $12,800 | $17,200 | $12,890 | $7,200 | $5,700 | |
Gross Margin | $0 | $8,100 | $9,450 | $21,400 | $27,500 | $32,500 | $26,750 | $35,200 | $49,800 | $46,110 | $17,800 | $20,300 | |
Gross Margin % | 0.00% | 64.80% | 62.38% | 76.43% | 76.39% | 75.58% | 74.31% | 73.33% | 74.33% | 78.15% | 71.20% | 78.08% | |
Expenses | |||||||||||||
Payroll | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | |
Sales and Marketing and Other Expenses | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Depreciation | $595 | $595 | $595 | $595 | $595 | $595 | $595 | $595 | $595 | $595 | $595 | $595 | |
Leased Equipment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Utilities | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | |
Insurance | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | |
Rent | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | |
Payroll Taxes | 15% | $2,220 | $2,220 | $2,220 | $2,220 | $2,220 | $2,220 | $2,220 | $2,220 | $2,220 | $2,220 | $2,220 | $2,220 |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Operating Expenses | $20,615 | $20,615 | $20,615 | $20,615 | $20,615 | $20,615 | $20,615 | $20,615 | $20,615 | $20,615 | $20,615 | $20,615 | |
Profit Before Interest and Taxes | ($20,615) | ($12,515) | ($11,165) | $785 | $6,885 | $11,885 | $6,135 | $14,585 | $29,185 | $25,495 | ($2,815) | ($315) | |
EBITDA | ($20,020) | ($11,920) | ($10,570) | $1,380 | $7,480 | $12,480 | $6,730 | $15,180 | $29,780 | $26,090 | ($2,220) | $280 | |
Interest Expense | $1,235 | $1,220 | $1,205 | $1,190 | $1,175 | $1,160 | $1,145 | $1,130 | $1,115 | $1,100 | $1,085 | $1,070 | |
Taxes Incurred | ($6,555) | ($4,121) | ($3,711) | ($122) | $1,713 | $3,218 | $1,497 | $4,037 | $8,421 | $7,319 | ($1,170) | ($416) | |
Net Profit | ($15,295) | ($9,615) | ($8,659) | ($284) | $3,997 | $7,508 | $3,493 | $9,419 | $19,649 | $17,077 | ($2,730) | ($970) | |
Net Profit/Sales | 0.00% | -76.92% | -57.16% | -1.01% | 11.10% | 17.46% | 9.70% | 19.62% | 29.33% | 28.94% | -10.92% | -3.73% |
Pro Forma Cash Flow | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $0 | $12,500 | $15,150 | $28,000 | $36,000 | $43,000 | $36,000 | $48,000 | $67,000 | $59,000 | $25,000 | $26,000 | |
Subtotal Cash from Operations | $0 | $12,500 | $15,150 | $28,000 | $36,000 | $43,000 | $36,000 | $48,000 | $67,000 | $59,000 | $25,000 | $26,000 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $0 | $12,500 | $15,150 | $28,000 | $36,000 | $43,000 | $36,000 | $48,000 | $67,000 | $59,000 | $25,000 | $26,000 | |
Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Expenditures from Operations | |||||||||||||
Cash Spending | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | $14,800 | |
Bill Payments | ($100) | ($19) | $2,333 | $2,833 | $6,349 | $8,158 | $9,540 | $7,946 | $10,994 | $28,398 | $21,266 | $6,259 | |
Subtotal Spent on Operations | $14,700 | $14,781 | $17,133 | $17,633 | $21,149 | $22,958 | $24,340 | $22,746 | $25,794 | $43,198 | $36,066 | $21,059 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | |
Purchase Other Current Assets | $0 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | |
Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $16,500 | $18,381 | $20,733 | $21,233 | $24,749 | $26,558 | $27,940 | $26,346 | $29,394 | $46,798 | $39,666 | $24,659 | |
Net Cash Flow | ($16,500) | ($5,881) | ($5,583) | $6,767 | $11,251 | $16,442 | $8,060 | $21,654 | $37,606 | $12,202 | ($14,666) | $1,341 | |
Cash Balance | $48,100 | $42,219 | $36,637 | $43,404 | $54,654 | $71,097 | $79,157 | $100,811 | $138,416 | $150,618 | $135,953 | $137,293 |
Pro Forma Balance Sheet | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $64,600 | $48,100 | $42,219 | $36,637 | $43,404 | $54,654 | $71,097 | $79,157 | $100,811 | $138,416 | $150,618 | $135,953 | $137,293 |
Inventory | $80,000 | $80,000 | $75,600 | $69,900 | $63,300 | $54,800 | $44,300 | $35,050 | $22,250 | $18,920 | $14,179 | $7,979 | $6,270 |
Other Current Assets | $0 | $0 | $1,800 | $3,600 | $5,400 | $7,200 | $9,000 | $10,800 | $12,600 | $14,400 | $16,200 | $18,000 | $19,800 |
Total Current Assets | $144,600 | $128,100 | $119,619 | $110,137 | $112,104 | $116,654 | $124,397 | $125,007 | $135,661 | $171,736 | $180,997 | $161,932 | $163,363 |
Long-term Assets | |||||||||||||
Long-term Assets | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 |
Accumulated Depreciation | $0 | $595 | $1,190 | $1,785 | $2,380 | $2,975 | $3,570 | $4,165 | $4,760 | $5,355 | $5,950 | $6,545 | $7,140 |
Total Long-term Assets | $50,000 | $49,405 | $48,810 | $48,215 | $47,620 | $47,025 | $46,430 | $45,835 | $45,240 | $44,645 | $44,050 | $43,455 | $42,860 |
Total Assets | $194,600 | $177,505 | $168,429 | $158,352 | $159,724 | $163,679 | $170,827 | $170,842 | $180,901 | $216,381 | $225,047 | $205,387 | $206,223 |
Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Current Liabilities | |||||||||||||
Accounts Payable | $0 | $0 | $2,339 | $2,720 | $6,176 | $7,934 | $9,374 | $7,697 | $10,137 | $27,768 | $21,158 | $6,027 | $9,633 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $0 | $0 | $2,339 | $2,720 | $6,176 | $7,934 | $9,374 | $7,697 | $10,137 | $27,768 | $21,158 | $6,027 | $9,633 |
Long-term Liabilities | $150,000 | $148,200 | $146,400 | $144,600 | $142,800 | $141,000 | $139,200 | $137,400 | $135,600 | $133,800 | $132,000 | $130,200 | $128,400 |
Total Liabilities | $150,000 | $148,200 | $148,739 | $147,320 | $148,976 | $148,934 | $148,574 | $145,097 | $145,737 | $161,568 | $153,158 | $136,227 | $138,033 |
Paid-in Capital | $200,000 | $200,000 | $200,000 | $200,000 | $200,000 | $200,000 | $200,000 | $200,000 | $200,000 | $200,000 | $200,000 | $200,000 | $200,000 |
Retained Earnings | ($155,400) | ($155,400) | ($155,400) | ($155,400) | ($155,400) | ($155,400) | ($155,400) | ($155,400) | ($155,400) | ($155,400) | ($155,400) | ($155,400) | ($155,400) |
Earnings | $0 | ($15,295) | ($24,910) | ($33,569) | ($33,852) | ($29,855) | ($22,348) | ($18,855) | ($9,436) | $10,213 | $27,290 | $24,560 | $23,590 |
Total Capital | $44,600 | $29,305 | $19,691 | $11,032 | $10,748 | $14,745 | $22,253 | $25,746 | $35,164 | $54,813 | $71,890 | $69,160 | $68,190 |
Total Liabilities and Capital | $194,600 | $177,505 | $168,429 | $158,352 | $159,724 | $163,679 | $170,827 | $170,842 | $180,901 | $216,381 | $225,047 | $205,387 | $206,223 |
Net Worth | $44,600 | $29,305 | $19,691 | $11,032 | $10,748 | $14,745 | $22,253 | $25,746 | $35,164 | $54,813 | $71,890 | $69,160 | $68,190 |
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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
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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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With global online retail sales expected to hit $8.15 trillion by 2026, there’s no better time to start an ecommerce business.
But if you’re new to the business world, launching an online store can be daunting. Where do you begin? Should your initial focus be on product selection, website design, or marketing strategy? These questions are common for any budding entrepreneur.
This guide covers all the steps, from the basics to the more advanced aspects of running an online store. You’ll learn how to set up, manage, and grow your business into a profitable ecommerce venture.
1. find products to sell.
Being strategic with your product selection is key. Here are some tips to help you choose:
Capitalize on regional products
Identify products unique to certain regions or cultures that might have a demand in other areas. These can be traditional crafts, local delicacies, or specific fashion styles.
Explore niche communities
Look into niche hobbies or interests and find products that cater to these specific groups. These communities often have passionate followers looking for specialized items.
Solve a pain point
Think of a problem you’ve personally encountered and consider if there’s a product that could solve it. Products that address real-life issues can resonate well with customers.
You’ll find inspiration is abundant once you start your search. Google Trends can be a useful tool to help validate your product ideas.
Additional resources:
When it comes to sourcing products, dropshipping is a solid option to think about. It’s a setup where an ecommerce business sells products without dealing with inventory. A customer buys something from you, and then you order it from a dropshipping supplier who ships it directly to them.
While dropshipping is a popular choice, there are other business models like wholesaling or direct-to-consumer that might suit different business needs. However, dropshipping stands out for several reasons:
Research is integral to the success of your ecommerce store. Once you’ve chosen your products, look at competitors and what they’re doing. Here are a few things to pay attention to when doing a competitor analysis:
Competitor analysis can lead you to identify better products to sell and give you a good understanding of how to launch an online business. Additional resources:
With your competitive research complete, it’s time to write your business plan. This plan serves as a roadmap, guiding your ecommerce journey from start to growth. It’s especially important for aligning your goals and strategies.
Tips for crafting a successful business plan:
Choosing a business name.
Choosing the right name for your online business is a critical step. A good name sticks in people’s minds and becomes synonymous with your brand’s identity. Tools like Oberlo’s business name generator are great for sparking unique ideas and checking if a domain is up for grabs.
After picking a few names, see if they’re available on social media. Your brand needs the same name everywhere for people to recognize you easily. Thinking of selling worldwide? Make sure your name works across different cultures. You don’t want any surprises there.
Your logo is the visual heartbeat of your brand. Begin with something straightforward yet impactful using Shopify’s free logo maker . This tool is ideal for those new to logo design.
Consider how your logo will appear in different settings. It needs to shine on everything from your website to product packaging. A well-designed logo, aligned with your business name, lays the foundation for a strong brand presence in the online marketplace.
Once you have chosen a name and logo, the next thing to do is build your store. Choosing ecommerce hosting platforms like Shopify can make setting up your store easy. Shopify has lots of templates to start with and an easy-to-use online store builder that doesn’t need coding input.
When your website is ready to start taking orders, remember to try a test order yourself to make sure the process is smooth for the customer. Alleviate any additional steps needed to buy something online and ask only for information that is necessary for the checkout process.
There are various sales channels available, and selecting the right ones depends heavily on your target audience and the types of products you sell. If you specialize in unique or handcrafted items, niche marketplaces like Etsy are more suitable than broader platforms like Amazon or eBay.
Here’s a list of marketplaces that cater to different niches:
On the marketing front, balancing cost and effectiveness is key. You want to reach the right people without breaking the bank. Here are some strategies to consider:
Additional resources
Now, you’re ready to launch your online business. It’s a big step, and there’s plenty to keep an eye on as you start. First up, watch your key performance indicators (KPIs) closely. They tell you how well your store is doing and what you might need to tweak.
Next, make sure your shipping runs smoothly. Happy customers often come back, so getting orders to them without a hitch is crucial. If something goes off track, be ready with a backup plan.
Finally, keep learning and adjusting based on what your customers say and what your data shows. This way, your business keeps growing and improving.
Starting an ecommerce business can be more budget-friendly than you think. Often, you might need only about $100 to get going, mainly for a website subscription and a theme for your store. One of the perks of an ecommerce business is that it typically costs less than a brick-and-mortar store. You won’t have the same overheads like rent for a physical space.
If you opt for a dropshipping business model, the initial costs can be even lower. In dropshipping, you pay for products only after customers buy them, so there’s no upfront expense for stock. However, if you’re making products yourself or working with manufacturers, you’ll need to invest in materials and labor from the start.
Shopify’s research sheds some light on what to expect financially. They surveyed 150 entrepreneurs and 300 small business owners across the US. The findings suggest that new ecommerce store owners might spend up to $40,000 in their first year, covering everything from products and operations to marketing and staff wages. But these costs are usually offset by your business’s profits.
Here’s a rough breakdown of typical first-year expenses:
However, the actual amount can vary based on factors like your industry, the type of ecommerce model you choose, and whether you hire employees. And you don’t need to have the entire sum upfront. Many entrepreneurs start with personal savings, while others may seek support from friends, family, or personal loans.
Launching an ecommerce business is just the beginning. To make it profitable, you need to think differently. Here are some actionable tips for success:
Revamp your customer service approach. Implement interactive features like virtual product trials or augmented reality on your site. This will give customers a new way to experience your products.
Transform your website into an interactive playground. Add elements like scavenger hunts for discounts or fun quizzes that lead to personalized offers. These tactics can make shopping more engaging and increase sales.
Incorporate AI technology into your store. Use it to analyze customer behaviors and preferences. Then, tailor product recommendations and content accordingly to enhance the shopping experience.
Regularly update your product offerings. Use market trends and customer feedback to introduce new items. Consider limited-edition products or collaborations to create excitement and attract repeat visits.
Building an ecommerce business from scratch has its mix of highs and lows. You’ll be choosing products, gauging their market fit, and handling production. Next comes developing your online store and drawing in customers. It’s a bit like solving a complex puzzle, and the satisfaction of seeing it come together is immense.
Hopefully this article has helped you understand how to start an ecommerce business. You’ve got everything you need at your fingertips to make this the year your store takes off, and we’re happy to help you meet this goal.
What are the 4 ecommerce business models.
There are four primary ecommerce business models, :
To be honest, you’d need at least a few hundred dollars to start an ecommerce business. That’s because it’s a product-based business that requires you to build an online store, do marketing, and invest in the growth of your brand.
That said, you can start an ecommerce business on the cheap by choosing dropshipping as your business model, tapping into free marketing channels, and creating brand awareness via word-of-mouth strategies. You can also look into funding programs like Shopify Capital to get the money you need to start and grow your ecommerce business.
In a word: yes. But realizing your profits could take a while, since an ecommerce entrepreneur’s journey is a marathon rather than a sprint. It could take you 18 to 24 months to see a profit. That’s why we recommend you don’t measure the success of your ecommerce venture by your net profit in the first year.
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Ensure the Success of Your Ecommerce Business with Template.net’s Free Printable Ecommerce Plan Templates. Choose from Professionally-written Document Examples Online for Your Ecommerce Plan, Marketing, Startup, Online Products, Goals, Competitors, and Resources Needed to Execute Your Plan with Our Templates that You Can Fully Edit to Your Needs, Download for Free, and Print for Immediate Use.
Template.net ensures that you meet your objectives in your ecommerce business and reach your sales targets with our professional ecommerce plan templates. Whether for mobile or digital marketing, get template examples for one page, 90-day market plan, or market analysis templates that contain simple and fillable original content that you can edit to your needed specifics using our document editor tool. All templates are free to download and printable on office or commercial printers.
Choose your ecommerce plan template example that fits your needs to cover areas of planning processes, marketing strategies, or electronic commerce sales presentations. Edit your chosen template online using our editor tool to include your own relevant business provisions and objectives. Download freely after editing in PDF file format.
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Use this free business plan template to write your business plan quickly and efficiently.
A good business plan is essential to successfully starting your business — and the easiest way to simplify the work of writing a business plan is to start with a business plan template.
You’re already investing time and energy in refining your business model and planning your launch—there’s no need to reinvent the wheel when it comes to writing a business plan. Instead, to help build a complete and effective plan, lean on time-tested structures created by other entrepreneurs and startups.
Ahead, learn what it takes to create a solid business plan and download Shopify's free business plan template to get started on your dream today.
This business plan outline is designed to ensure you’re thinking through all of the important facets of starting a new business. It’s intended to help new business owners and entrepreneurs consider the full scope of running a business and identify functional areas they may not have considered or where they may need to level up their skills as they grow.
That said, it may not include the specific details or structure preferred by a potential investor or lender. If your goal with a business plan is to secure funding , check with your target organizations—typically banks or investors—to see if they have business plan templates you can follow to maximize your chances of success.
Our free business plan template includes seven key elements typically found in the traditional business plan format:
This is a one-page summary of your whole plan, typically written after the rest of the plan is completed. The description section of your executive summary will also cover your management team, business objectives and strategy, and other background information about the brand.
This section of your business plan will answer two fundamental questions: “Who are you?” and “What do you plan to do?” Answering these questions clarifies why your company exists, what sets it apart from others, and why it’s a good investment opportunity. This section will detail the reasons for your business’s existence, its goals, and its guiding principles.
What you sell and the most important features of your products or services. It also includes any plans for intellectual property, like patent filings or copyright. If you do market research for new product lines, it will show up in this section of your business plan.
This section includes everything from estimated market size to your target markets and competitive advantage. It’ll include a competitive analysis of your industry to address competitors’ strengths and weaknesses. Market research is an important part of ensuring you have a viable idea.
How you intend to get the word out about your business, and what strategic decisions you’ve made about things like your pricing strategy. It also covers potential customers’ demographics, your sales plan, and your metrics and milestones for success.
Everything that needs to happen to turn your raw materials into products and get them into the hands of your customers.
It’s important to include a look at your financial projections, including both revenue and expense projections. This section includes templates for three key financial statements: an income statement, a balance sheet, and a cash-flow statement . You can also include whether or not you need a business loan and how much you’ll need.
What do financial projections look like on paper? How do you write an executive summary? What should your company description include? Business plan examples can help answer some of these questions and transform your business idea into an actionable plan.
Inside our template, we’ve filled out a sample business plan featuring a fictional ecommerce business .
The sample is set up to help you get a sense of each section and understand how they apply to the planning and evaluation stages of a business plan. If you’re looking for funding, this example won’t be a complete or formal look at business plans, but it will give you a great place to start and notes about where to expand.
A lean business plan format is a shortened version of your more detailed business plan. It’s helpful when modifying your plan for a specific audience, like investors or new hires.
Also known as a one-page business plan, it includes only the most important, need-to-know information, such as:
💡 Tip: For a step-by-step guide to creating a lean business plan (including a sample business plan), read our guide on how to create a lean business plan .
It’s tempting to dive right into execution when you’re excited about a new business or side project, but taking the time to write a thorough business plan and get your thoughts on paper allows you to do a number of beneficial things:
A business plan can be as informal or formal as your situation calls for, but even if you’re a fan of the back-of-the-napkin approach to planning, there are some key benefits to starting your plan from an existing outline or simple business plan template.
A blank page can be intimidating to even the most seasoned writers. Using an established business planning process and template can help you get past the inertia of starting your business plan, and it allows you to skip the work of building an outline from scratch. You can always adjust a template to suit your needs.
If you’ve never sat through a business class, you might never have created a SWOT analysis or financial projections. Templates that offer guidance—in plain language—about how to fill in each section can help you navigate sometimes-daunting business jargon and create a complete and effective plan.
In some cases, you may not need to complete every section of a startup business plan template, but its initial structure shows you you’re choosing to omit a section as opposed to forgetting to include it in the first place.
There are some high-level strategic guidelines beyond the advice included in this free business plan template that can help you write an effective, complete plan while minimizing busywork.
If you’re writing a business plan for yourself in order to get clarity on your ideas and your industry as a whole, you may not need to include the same level of detail or polish you would with a business plan you want to send to potential investors. Knowing who will read your plan will help you decide how much time to spend on it.
Understanding the goals of your plan can help you set the right scope. If your goal is to use the plan as a roadmap for growth, you may invest more time in it than if your goal is to understand the competitive landscape of a new industry.
Writing a 10- to 15-page document can feel daunting, so try to tackle one section at a time. Select a couple of sections you feel most confident writing and start there—you can start on the next few sections once those are complete. Jot down bullet-point notes in each section before you start writing to organize your thoughts and streamline the writing process.
Planning is key to the financial success of any type of business , whether you’re a startup, non-profit, or corporation.
To make sure your efforts are focused on the highest-value parts of your own business planning, like clarifying your goals, setting a strategy, and understanding the target market and competitive landscape, lean on a business plan outline to handle the structure and format for you. Even if you eventually omit sections, you’ll save yourself time and energy by starting with a framework already in place.
What is the purpose of a business plan.
The purpose of your business plan is to describe a new business opportunity or an existing one. It clarifies the business strategy, marketing plan, financial forecasts, potential providers, and more information about the company.
If you need help writing a business plan, Shopify’s template is one of the most beginner-friendly options you’ll find. It’s comprehensive, well-written, and helps you fill out every section.
The five essential parts of a traditional business plan include:
There are several free templates for business plans for small business owners available online, including Shopify’s own version. Download a copy for your business.
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Ready to launch your ecommerce business? Follow these best practices to make sales and retain customers.
In crowded online markets, it takes effort to make an ecommerce business stand out.
Even with a fantastic product, a subpar customer experience leads to frustrated customers and missed sales opportunities. With the help of ecommerce best practices, you can smoothly guide your customers from learning about your brand to checkout — and hopefully turn a site visitor into a lifelong customer. After all, ecommerce is about more than just a product.
Online purchases exploded during the COVID-19 pandemic. People stuck at home spent, on average, 32% more on online purchases in 2020 than they did in 2019. The rapid growth and unbeatable convenience of online shopping paired with millions of people at home led to the perfect storm of booming online retail sales.
Today, ecommerce continues to boom with novel strategies and verticals centered on mobile or social commerce. Social media-based sales alone are set to exceed $56 billion in the U.S. in 2023, doubling pre-pandemic sales.
The rise of ecommerce businesses represents a significant shift in consumer habits that will likely continue. If you’re thinking of joining the wave and starting an online business, incorporate these best practices into your business plan to make sales — and win over consumers — from day one.
Ecommerce simply means buying and selling goods and services online — things like technology and makeup, but also homes and cars. You can sell anything there’s a market for. And if a market doesn’t exist, you can create one with a unique product or service.
If you’re thinking of starting a business but aren’t sure what to sell, here are some popular product ideas and why they’re in demand:
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Ecommerce seems simple but has a steep learning curve. Online marketers make it seem as easy as setting up a website and watching your net worth grow while sipping a drink on a beach. But to be successful, you need to know how to create (or source) in-demand products, attract customers, and manage inventory or dropship suppliers. And that’s just scratching the surface.
You also need to focus on marketing, content creation, design and development, customer service, and more. Business owners must juggle lots of roles and tasks to run an ecommerce business.
Here are a few best practices to help you get started.
Drill down into key elements about the product or service — its features and benefits, target audience, and unique selling points — to identify early barriers. Understand what the product or service accomplishes or what problem it’s meant to solve.
Know where your competitors fit in the market and be honest about where you fit on that spectrum. Once you find the differences, lean on them. Make it clear how you stand out from competitors, whether it’s superior quality or a better price point.
Decide whether producing your product or sourcing it from another company will work best for your ecommerce business model. Handmade goods are best produced by a single supplier, while selling phone accessories at volume often requires a factory capable of higher output.
Research potential suppliers and choose ones with good reviews and solid products or materials. Ask for a sample. Check out their competitors. Spend the time here so you don’t disappoint customers with a subpar product.
A business plan should include details about the product, marketing strategies, and financial projections. Putting everything in one place creates a centralized source of truth you can refer to later if you need to pivot to a new strategy or adjust financial projections.
A website is the face of all ecommerce, so design a user-friendly and engaging page that’s accessible and organized. A successful ecommerce store has high-quality images, clear product descriptions, and an intuitive checkout process.
Around 94% of consumers say that navigation is the most important part of a website, and 83% value good-looking, up-to-date websites. Without clear navigation, potential customers might grow frustrated and leave without making a purchase. Don’t sacrifice functionality for flashy designs that obscure information or interrupt the user flow.
Once you’ve established a basic website, optimize specific elements. Try A/B testing product descriptions, improving the user experience and user interface, and creating content that shows off your product offerings.
Ecommerce tools speed up operations, improve customer satisfaction, and increase the overall efficiency of an online store . If your payment processing system is out of date, for example, it could slow the checkout process to a crawl, leading customers to your competitors.
You should always seek new tools that improve pain points within your business, but don’t fix things that aren’t broken. Your time is better spent elsewhere.
Respond to inquiries and resolve them quickly to build customer trust and loyalty. Encourage customers to reach out by offering multiple ways to do so: a chatbot, contact forms, open DMs on social media, or a business phone number they can call or text.
Improve your ecommerce website’s search engine rankings by writing great content and applying search engine optimization (SEO) best practices. Optimize product images and descriptions, improve site navigation, and ensure your site is mobile-friendly to increase your chances of Google indexing and ranking your site.
Add new products regularly to retain existing customers and attract new ones. Don’t forget to remove out-of-stock or past-season items to avoid frustrating your customers interested in unavailable products.
Once the business is up and running, keep tabs on its progress, traffic, and conversion rates. Customer data helps businesses understand their target demographics and better serve their needs. Track customer interactions, analyze site traffic, and conduct surveys. With that data, you can decide if you need to change your business goals or strategies.
A great website is a crucial component of any online business. Learn how to build and optimize your ecommerce website with resources from Webflow.
Learn how to create a website from scratch or get inspired by some of the best ecommerce website templates . Webflow’s intuitive website builder offers a no-code, lightweight solution for your ecommerce business.
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Learn the different types of ecommerce business models before building your business plan. Your chance of success is knowing which model is best for you.
Learn about ecommerce marketing and the types of marketing strategies that will drive website traffic, increase sales, and boost your ecommerce business.
In the ecommerce game, more ratings and product reviews means more customers and more revenue.
Dropshipping lets you sell products online without manufacturing or stocking inventory. Learn how to make the most of this low-risk business model.
How to launch dynamic ad campaigns from your Webflow Ecommerce store — starting with the Facebook pixel and catalog setup.
Email remains one of the best and most effective ways to communicate with customers. Make sure you're communicating right with these 8 tips.
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Fact Checked
Updated: Jun 3, 2024, 9:52am
We analyzed the official complaint records of 28 insurers and found that Allianz and Clear Blue are the best small business insurance companies.
A good policy will cover your small business for a variety of problems, like workplace injuries, stolen business property, fire, severe weather and lawsuits. But with all of the options available, finding a policy might seem like a daunting task. We can help you identify the best small business insurance companies.
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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.
The business plan must also include the operations side of things. Determine who will be your manufacturer, secondary manufacturer, and shipping and fulfillment provider. When looking at supply chain costs and options, ShipBob is an ecommerce fulfillment provider you can consider.
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.
An ecommerce business plan is a detailed and comprehensive document that outlines the strategies, objectives, and operational blueprint of an online business. It serves as a roadmap guiding the company's operations and growth within the dynamic and competitive digital marketplace.
An e-commerce business plan is a well-prepared document meant to tell potential investors and lenders about your business and what its plans are. It should give interested parties a comprehensive overview of your business and inspire confidence in your ability to accomplish your goals. ... An e-commerce business plan template makes the process ...
Ecommerce Business Plan Example. Below is an example business plan that we've written for a fictional cookware business. You can see how it breaks down the most important parts of a business - overall business model, competitive advantages, messaging guidelines, target audiences, budgets, key personnel - in a highly summarized, accessible format.
Step 1: Draft an executive summary. Although this is the first part of an ecommerce business plan, it is better to tackle the executive summary after completing the entire document. The executive summary gives an overview of the business plan on a single page. The executive summary presents a company overview and highlights of the most ...
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 ...
Download a free e-commerce startup business plan template that includes pre-written examples for every section to help you write your own plan. Business Planning. ... Download as a Word document and edit your business plan right away. Detailed instructions. Features clear and simple instructions from expert business plan writers.
An ecommerce business plan is a document that outlines your business purpose and goals, analyzes your industry and competitors and identifies the resources needed to execute your plan. ... The key elements of an ecommerce business plan template describe blueprints for growth, projected timelines and financial goals — clarifying topics like ...
An e-commerce business plan is a written document that describes your business, including your product/service offering, marketing strategy and financial projections. It is a great way to formalize your business process and can be especially helpful if you are pitching to potential investors or lenders.
02. Include your company name and description. In this section, you'll want to outline the who, what and why of your business. Rather than going into details about the products you plan to sell (this comes later), talk about your vision for the company.
An ecommerce business plan is a strategic document that outlines your online business's goals, objectives and operational details. It helps you and your investors understand the business's direction, competition, marketing strategies and financial requirements. Simply put, an ecommerce business plan is a structured way to lay out your ...
Download the free eCommerce business plan template doc to get the nail on the head for your eCommerce business. Download eCommerce Business Plan Doc NOW! 5 eCommerce Business Plans' Mistakes to Avoid in 2022. As for eCommerce owners ( whether it was for fashion, services, etc.), there are some methodologies they use to approximately estimate ...
A: An ecommerce business plan is a written document that outlines the goals, strategies, and financial projections for an online business. It's important to have a well-crafted ecommerce business plan because it helps you clarify your objectives, identify your target audience, and develop effective marketing strategies.
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 ...
An eCommerce business plan is a document outlining the structure, operations, and finances of your business. This document will give you a roadmap to follow as you build your business and is very useful when seeking investors. Typically, your business plan can help you steer your business in the right direction.
Explore our E-commerce Business Plan, presented below. If you prefer, you can access a downloadable Google Doc version of this bar business plan template, allowing you to personalize and tailor it to your specific needs. Additionally, a helpful video walkthrough is available, guiding you through the process of customizing the business plan to ...
Online shopping by teenagers between 13 to 18 years in age is expected to total about $300 million this year (2000) and is accelerating at about twice the rate of online shopping by adults. By 2003, teenagers are expected to spend $2 billion annually online. By 2004, a clear majority of young consumers will shop online.
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.
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 ...
3. Write a business plan. With your competitive research complete, it's time to write your business plan. This plan serves as a roadmap, guiding your ecommerce journey from start to growth. It's especially important for aligning your goals and strategies. Tips for crafting a successful business plan:
A business plan is a document that helps small business owners determine the viability of their business idea. Combining market research and financial analysis, a professional business plan helps startup CEOs and potential investors determine if the company can compete in the target market. Typically, a good business plan consists of the following:
Ensure the Success of Your Ecommerce Business with Template.net's Free Printable Ecommerce Plan Templates. Choose from Professionally-written Document Examples Online for Your Ecommerce Plan, Marketing, Startup, Online Products, Goals, Competitors, and Resources Needed to Execute Your Plan with Our Templates that You Can Fully Edit to Your ...
Use this free business plan template to write your business plan quickly and efficiently. Skip to Content. Solutions. Start. ... Writing a 10- to 15-page document can feel daunting, so try to tackle one section at a time. ... Starting Up How To Start an Ecommerce Business: Guide for 2024 Guides What Is Dropshipping and How Does It Work? (2024 ...
3. Create a Business Plan. A business plan is a document that describes your company, its products and services, its customers, its goals and what's required to meet those goals. You'll need a detailed business plan if you will be applying for a business loan or looking for a loan.
4. Make a detailed business plan. A business plan should include details about the product, marketing strategies, and financial projections. Putting everything in one place creates a centralized source of truth you can refer to later if you need to pivot to a new strategy or adjust financial projections. 5. Create an engaging website
A business plan is a dynamic document that serves as a roadmap for establishing a new business. This document makes it simple for potential investors, financial institutions and company management ...
Build your business case for the cloud with key financial and technical guidance from Azure. Customer enablement. Plan a clear path forward for your cloud journey with proven tools, guidance, and resources. Customer stories. See examples of innovation from successful companies of all sizes and from all industries. Azure innovation insights
Small businesses face various risks and need reliable insurance to protect them. Forbes Advisor has evaluated the best small business insurance companies based on official complaint records ...