How To Write An Effective E-commerce Business Plan

Writing effective business plans for e-commerce businesses is a learned skill.

The culmination of any entrepreneurial spirit is always a business. The startup process often requires much diligence as it sets the tone for the rest of the business. When setting up a business you want to make sure that you have everything perfect. For example, if you were setting up a tree care business then you would want to make sure that you have the right landscaping software. It’s not just the right software though that people want. In recent time, many entrepreneurs have chosen E-commerce as their preferred venture.

E-commerce online stores are the face of many retail and wholesale businesses owing to the flexibility they offer, the outreach, and the convenience that they present for both traders and customers.

But, just as any other business, an E-commerce online store requires a well-crafted business plan. This article will delve into the exceptional aspects of writing effective business plans for E-commerce online stores.

How To Write An Effective E-commerce Business Plan

Essentials of an E-commerce Online Store Business Plan

Before you get started on writing your e-commerce business plan, you should acquaint yourself with the essential elements that make up the business plan.

Let’s consider six of them.

1. Business Model

The majority of online e-commerce stores sell their wares, and once an order is placed, the items are shipped to the customers. But others offer more services depending on the nature of products and the desires of the customers.

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You would find that some stock goods and then drop ship to the customers. Others offer digital products which are downloaded after purchase. Some products are also availed or made on order.

So the key aspect is deciding what product to sell in order to devise a viable business model to use.

2. Mode of Operation

After determining what product you’ll sell, the next aspect to consider is the mode of operation. The key question here is how you will go about your deliveries to customers.

If, for example, you sell tangible items, a viable mode of operation would be to keep stock and ship the items after purchase. You could either ship them yourself or delegate the function to an outsourced company.

If your products are digital, then a viable mode of operation would be providing access to the products on an online platform.

3. Product Sales and Distribution

Now that you have your product and a working mode of delivery, the next step is to come up with sales and distribution channels. There are various directions that you can explore in this regard. By the fact that you’re targeting the online market, avenues such as blogs and social media sites are great selling channels.

4. Marketing

To increase product awareness, you would have to undertake targeted marketing for your online e-commerce store. Explore various marketing techniques at your disposal, such as content marketing, online ads, product listings, email marketing, referral marketing and affiliate marketing.

5. Finance

Your business plan should outline the financial aspects of your e-commerce venture. This includes the capital requirements, assets costs and business operating expenses, cost-volume-profit analysis, break-even analysis and projected income within specified periods. All these would be essential in determining a strategy that maximizes profits and minimizes costs.

6. Business Commencement

After identifying the key business processes in your online e-commerce store, devise a plan of how to translate these processes into actions. Determine the key actions that would lead to successful business launch.

After you’ve acquainted yourself with these six steps, you will be in a better position to write detailed and objective business plans for your online e-commerce store. Below is a model structure of an e-commerce business plan.

Structure of Your E-commerce Business Plan

Though the executive summary appears first in your business plan, it is the last part that you’ll write. It summarizes your whole business plan. It should tell anyone who reads it about your value proposition and all the essential elements of your business. It should be brief but detailed.

The following should be included in your executive summary to bring out your business in the best light:

  • The mission statement
  • Key objectives
  • Date of commencement
  • Founders and key stakeholders
  • Products
  • Market positioning
  • Strengths and weaknesses

Business Description

This section provides all details of your online e-commerce store. The following aspects should be covered:

  • Ownership: State who owns the e-commerce business. Name the founders.
  • Operations: Give the location of the business and how you will conduct operations.
  • Business Model: State whether you’re a business-to-business company (B2B) or a business to consumer (B2C). Do you conduct wholesale or retail sales? How does the customer get the products?
  • Market Need to be Fulfilled: Explain what necessitated the start of your business. Point out the gaps being filled in the market and your innate desire to start the business.


In this section, describe your main product and what it’s made up of. Explain the utility that it has to consumers. Go ahead and write why you specifically chose the product and how it’s unique from other products in the market. Disclose the acquisition cost and process and comment on the longevity of the product.

Market Description and Analysis

Under this section, you will write a clear description and analysis of the individuals, groups, and entities that will be your customers.

Describe the demographics of your market. Segment your market and analyze it with the segments created. Create a buyer persona that correctly depicts the consumers of your product.

This analysis should also cover the industry as a whole and how your e-commerce store positions itself in the industry.

Also write about your competitors and perform a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis on them to see how you compare.


This section purely focuses on the inner workings of your business and the daily standard operating procedures, programs, and hands-on operations.

Under this section, the following aspects relating to the operations of your e-commerce store should be written:

  • The hours of operation: Is it an 8 to 4, 9 to 5, Monday to Friday, Monday to Saturday. But when running an e-commerce online store, it is always advised to have it running round the clock. Shutting it down for some hours could ruin your SEO (search engine optimization) efforts.
  • Members of staff and their responsibilities: Write down the members of your team and their respective portfolios. Mention their work experience and their terms of employment/contract.
  • Management: Mention the individuals that are tasked with managing the business, write their competencies and experience. Also say the tasks and oversight activities that they will be handling in the business.
  • Location: Write the central place of operation—office, home office, workstation, warehouse, etc.

Financial Plan and Analysis

This section is usually the hardest for many business owners, due to the figures and technicalities. Even so, it’s an important element of your e-commerce online store business plan. It’s the heart of the business. Without a financial plan, your business will lack bearing. When seeking investors, the financial plan is what is read by the financiers.

About finance, the following aspects should be examined.

  • Operational Costs: Trace all your costs and your cost centers. This includes pre-trade costs, product acquisition cost, cost of raw materials, shipping costs, storage costs, website administration fees, graphic design, computer software and programs, marketing tools, advertising, etc. You can further categorize them into Fixed and Variable costs.
  • Assets and Liabilities: List all the items that qualify as an asset to your online e-commerce store. Also mention any items of liability such as loans and credit.
  • Profit and loss projection: This is the central part of your e-commerce business financial plan. It is an estimation of the profit that you will realize provided everything remains constant. Work your figures right so that you present a true and objective projection.
  • Break Even Point: This is the point at which your business will start realizing profits having recovered all costs. It shows the volume of sales needed for you to recover all your costs.

Writing a business plan is essential for your e-commerce online store. The process of writing gives you a better understanding of the business as well as grants you a chance to position yourself better in the online industry. Just like a traveler uses a compass, a sound business plan is an excellent mapping tool for your online e-commerce store. Follow the highlighted guidelines to write an effective business plan for your online e-commerce store.

Do you have tips on business plan writing that you’d like to share? Comment below.

How To Write An Effective E-commerce Business Plan

Sophia Clark is a creative writer. She is working on several projects. And one of them is In her free time, she enjoys writing fiction as well as reading it. Her big dream is to publish a book one day. Connect with her on G+.