How (and Why) to Write Your Ecommerce Business Plan


Jill Nash


Reviewed by


December 22, 2021

This article is Tax Professional approved


Visions of becoming a successful ecommerce entrepreneur may have you browsing domain name ideas and virtual storefront websites. After all, what’s easier than launching an online business from your living room in just a few clicks?

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The truth is that prospective ecommerce business owners who don’t have a step-by-step plan can face major challenges later on. An ecommerce business plan can help you anticipate future growth and avoid common obstacles.

Why you need an ecommerce business plan

You may wonder why a business plan is even necessary if you’re just going to have an online store.

Even though you won’t be selling products out of a traditional brick-and-mortar shop, you still have to clarify your goals, finances, suppliers, and marketing strategies. More importantly, you can use the plan to convince prospective lenders and investors to back your ecommerce company financially.

Without a roadmap for planning your online shop, it’s easy to lose direction and focus. The ecommerce business plan serves as your guide on your journey from a small start-up to a potentially profitable venture. A solidly written business plan will not only help you get your business off the ground, but it will also be an indispensable tool to help with future expansion.

An e-commerce business plan can help you:

  • Validate your business idea.
  • Define your target audience and which products and services to sell.
  • Detail the financial, physical, and human resources you need to get the business off the ground.
  • Create a game plan, including measurable goals, for sales and future expansion.
  • Understand who your competition is and how you will gain the upper hand in the marketplace.
  • Convince investors and lenders to help you establish your business and expand later on.

What an ecommerce business plan includes

An ecommerce business plan will act as the guide describing the how’s and why’s of your future business.

The plan should include the following:

  • Values that the business will offer to customers and clients. These can include finances, time, convenience, and customer service.
  • How and when your ecommerce business will be profitable.
  • Any resources necessary to operate the business, such as funding, employees, and equipment.
  • Plans for expansion, including new products or services you plan to offer in the future.
  • How your business stacks up against the competition.
  • Current financial reports and projections.

Writing your ecommerce business plan

Now that you know what to include, you can begin writing your formal ecommerce business plan. There are many free business plan templates available for download, but we like this easy-to-follow ecommerce business plan template from the Shopify website.

Templates and formats will vary, but there are five main components you should always include in your ecommerce business plan:

1. Executive summary

Think of the executive summary as an introductory short story about your business that should draw potential investors into the rest of the plan. This first section sets the stage for your small business and should leave readers with a strong impression.

Make sure you address the following factors:

  • The business name and domain name, both of which should be easy to remember and accurately reflect what you’re marketing.
  • The products and services your business will provide.
  • The target market for your business.
  • If the ecommerce site will be run from your home or from a rented office space.
  • Short and long-term goals of the business.
  • What marketing strategies you plan to use.

For example, say your business is going to specialize in sugar-free candy. You’ll can use your executive summary to introduce the business with an easy-to-remember name—something like “The Low Sugar Shop,” maybe—with a similarly catchy domain name to go with it.

2. Company overview

This section, also known as the company description, could be considered a biography of the company. Be sure to include in-depth details, such as:

  • The history of the company, including how you came up with the idea for the business.
  • The legal structure of the business (LLC, S corporation, C corporation).
  • If you are a B2B or B2C ecommerce business.
  • The management team, as well as any partners.

The company overview should also include your mission statement, which is the reason you are starting the business. It can be a simple statement or a more detailed description.

A sample mission statement

For your sugar-free candy shop, a mission statement might look something like this:

The Low Sugar Shop is dedicated to offering a wide variety of the highest quality, low and no sugar candy at affordable prices. At the Low Sugar Shop, we believe sugar-free candy should be just as satisfying as its high-sugar counterparts. That’s why we offer a complete line of the most popular low and sugar-free candy available today.

3. Market research and analysis

Every business needs a market—without customers, your business won’t succeed. How you identify your market is key to your ecommerce business’s success. The more information you have about your potential customers, the more faith your investors and lenders will have in your business.

Recent industry reports can usually be found online, and they’re a great place to research growth in your target market. These reports include information such as how much growth there is in the industry, what may be causing this growth, and the demographics of the industry’s largest customer segments.

The market analysis section should include:

  • The demographics of your target market, such as population size, age, education, and income level. If it’s a niche market, is there enough demand for your business to be successful?
  • The needs and search habits of your target customers, as well as your ability to meet these demands.
  • Your anticipated competitors, as well as what will differentiate your business from theirs. This requires some competitive analysis to uncover their key product features, pricing strategy, monthly website traffic, mission statement, and business model.
  • Once you know what you’re up against, you can strategize ways to stay ahead of your competition, such as offering unique products, concentrating on specific in-demand items, and offering more attractive discounts.
  • Your marketing plan, including the marketing channels you plan to use.
  • Your marketing strategy will be informed by your previous work in this section since the shopping behaviors of your target personas will impact where you choose to advertise. This will include social media and any paid advertising methods, such as pay-per-click ads, affiliate marketing, and influencers. You can also include other unpaid strategies you may use, like email marketing or writing SEO-driven blogs and articles to help increase traffic to your website.

Market research for the Low Sugar Shop

To continue our example, in conducting your industry research for the Low Sugar Shop, you discover there is tremendous growth in this area since many people are cutting down on their sugar intake for health reasons. The taste and quality of sugar-free candy have also improved significantly in recent years, adding to the demand and appealing to more consumers.

Your research also indicates that your target demographic will be relatively well-educated, health-conscious consumers in their 40s and 50s.

Your candy business can start by looking into the popularity of specific brands of other low-sugar and sugar-free candy products. This information gives you an idea of how to stock your ecommerce store so that you meet that demand.

Include how you will target your advertising, which in this case may be in publications and websites that cater to healthy eating.

4. Logistics and operations

If your business will be selling physical products, your logistics and operations plan will describe how your ecommerce business will manage product inventory and deliveries. This is where you can demonstrate a thorough understanding of your supply chain, including contingency plans for any issues with timelines and raw materials.

If you are only selling digital or virtual items, this will not be an issue. However, you must still specify how these items will be delivered, such as via email or by navigating to a download website. This assures your stakeholders that your products will be readily available for your customers upon request.

This section of your business plan should contain the following information:

  • Where you will obtain your inventory from, and how much lead time is needed to ensure adequate stock of all your products. Include who your suppliers are along with their costs. This includes any wholesalers to purchase products in bulk for resale or if you plan on using a dropshipping service.
  • The amount of inventory you will have on hand and how it will be stored.
  • Any restrictions for shipping to international customers.
  • The projected packing and shipping times of your products from your wholesaler and estimated shipping time to your customers.
  • Any contingency plans you have in place for peak demand periods.

5. Financial plan and projections

Prospective stakeholders will go over your financial plan with a fine-tooth comb. After all, they want to be assured that they are making a wise investment in your ecommerce business.

This section shows potential investors how long it will take you to make your expenses back and help determine if you need a business loan.

You’ll need to include the following supporting documents in this section:

  • Income statement: Your income statement includes all of your projected startup costs, including supplies, licenses, fees, and deposits, as well as costs for creating the business structure. Be sure to include additional fixed expenses, such as domain name registration and server fees. Your variable projected expenses are the cost of products sold and credit card payment fees.
  • You can calculate your projected net income by subtracting all of the above expenses from your projected total revenue.
  • Startup balance sheet: Your balance sheet lists the business’s assets, such as inventory, equipment, supplies, on one side and liabilities, such as taxes and loan repayments, on the other.
  • Subtract the liabilities from the assets to arrive at a projected amount of shareholder equity.
  • Cash flow statement: The cash flow statement documents your projected cash inflow and outflow. Here you will list the amount of money you plan on having at the beginning of each month, total sources of cash from sales, loans, lines of credit, and expenses you plan on incurring.

How Bench can help

A detailed projection of your start-up costs and revenue assures investors that you’ve carefully considered every possibility, which makes your ecommerce business a better bet. Stakeholder confidence soars when you can provide professionally prepared financial statements to prove that you already have a solid bookkeeping system in place.

Bench can help by assigning a dedicated bookkeeper to handle your pre-revenue startup tasks, including preparing your projected financials.

After your e commerce business is off and running, your Bench bookkeeper keeps your books in order so you can focus on the day-to-day responsibilities of your new business. Learn more.

Putting it all together

We get it: writing up a business plan may not be the most exciting activity, but it can save you time and money in the long run and help prepare you for the challenges ahead. The plan puts all of your ideas, questions, and concerns with their solutions in writing, providing a roadmap that guides you throughout your business start-up journey.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
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