A business plan is a blueprint for your business. It sets out where you want to go and how you want to get there.
While you might want to jump right into your ecommerce business and start selling, starting with a business plan is the foundation of a thriving business. Harvard Business Review found businesses that take the time to draft a business plan increase their odds at succeeding by 16 percent. And one study by McKinsey & Company found that 79 percent of executives believe a formal planning process contributes significantly to overall business strategies.
Business plans force you to think critically and strategically and can even help you acquire outside funding for your next big investment.
So, how do you put one together? We’ll go over the different types of business plans, what to include in each section, and a simple business plan template for you to follow.
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Types of Business Plans
Business plans are used for different purposes. Sometimes, it’s to get the internal team on the same page, and other times, it’s to attract potential investors. Depending on who’s reading your business plan and what you’re hoping to achieve, you might adapt it to take a different layout. Here are the main types of business plans and what they’re used for:
- General: This is the business plan format you typically see and is often meant for external parties. It’s comprehensive and covers all areas of the business.
- Summary: This is a truncated version of the general business plan, sometimes as short as one page. These are better for taking around with you to networking opportunities.
- Startup: New businesses will use startup business plans, which outline the steps for launch. This is great for internal teams and attracting investors or lenders.
- Strategic: Similar to the “summary” business plan, a strategic one is high level – it’s ideal for board members and other shareholders.
- Feasibility: These outline who, if anyone, will purchase the service or product a company wants to sell, and if the venture can turn a profit. This is more commonly used to validate your idea.
- Operations/internal: These business plans are for your management team, board of directors and your high-level professional advisors. They focus on inner workings.
- Growth: Have growth goals? This business plan provides an in-depth description of how a company plans to scale. This is good for internal teams and potential investors.
- Complete: This comprehensive business plan goes into detail about finances – these companies are typically trying to secure funding.
What Is the Format of a Business Plan?
Regardless of the type of business plan you use, most will include some version of the following:
- Title page
- Table of contents
- Executive summary
- Company description
- Products and services
- Industry overview
- Market analysis
- Marketing plan
- Operations and management
- Financial plan
This is where you’re introducing your grand idea. What’s the name of the business? Who’s behind it? When was this document prepared? These are all questions the title page should answer.
As far as design goes, keep it simple. Add a company logo (if you have one), but otherwise, keep styling and graphics to a minimum. This is a professional document, not a school project.
Table of contents
We have a lot to cover, and it’s not always necessary to read through every single section. A table of contents makes it easier to find the sections most relevant to the reader or to refer back to sections they want to reread.
The design here should also be simple (you’ll see this is a recurring theme), with a focus on functionality.
Here’s where we start getting into the meat of the business plan. The executive summary is your one-pager, sort of like an elevator pitch. It’s important to hook readers in at this point. If the executive summary doesn’t get them excited, what’s going to motivate them to finish reviewing your plan?
So much to say, so little space to say it. The executive summary needs to be refined and focus on what will get potential investors and lenders jazzed about your idea. What’s so exciting about it? How can you instill faith in your business idea?
Aside from that, it’s important to tease the research you’ve done around making sure this is a viable opportunity. Provide high-level details about:
- Your company mission and vision
- What your business sells
- Who your target market is
- What differentiates you
- The people behind the brand
- Projections and goals for future growth
Tip: Write your executive summary last. Because it’s basically a truncated version of your entire business plan, it’ll be easier to organize your thoughts once you’ve deep-dived into each of the areas below.
Now, it’s time to get into the nitty gritty about your brand – we’re talking really nitty gritty. Details like business name and address, founding date, legal structure, licenses, ownership details, number of employees, and more.
And then the higher-level fun stuff, like company values (an in-depth exploration of your vision and mission), short- and long-term goals, and positioning in the overall market. This is where you show you’ve done your research on competitors.
Products and services
Here, you define the item that’s going to turn you a profit – in our case, the physical products you plan to dropship. Create a list of each product you plan to offer (and categories, if you have a ton), your pricing strategy and anticipated profit margin, and why customers will want to buy from you.
It’s a good idea to include a bit of information about how products will be manufactured and delivered. Will you be selling direct-to-consumer or through wholesale customers? How will you package and assemble orders? How do the orders get into customers’ hands? And how will you handle returns? These are just a few of the questions you’ll need to answer.
Remember to detail some of the valuable relationships you have in the industry to reinforce your likelihood of success.
This is where we look at the industry as a whole: Who’s operating in the vertical? What do these niche customers want? What are the economic trends for the industry?
Other great resources to check out include:
- D&B Hoovers
- U.S. Census Bureau
- Census Bureau’s Economic Indicators
- Bureau of Labor & Statistics
- U.S. Embassy websites (Hint: Check the sections about people who want to sell abroad for regional insights.)
You can also look for niche publications to find targeted analyses and reports.
A lot of the research you’ve put together for the above sections will inform your overall market analysis. The market analysis is a summary of the aforementioned, plus more information about your target customer.
When identifying your market, you need to consider if the size of your potential customer base is big enough to generate a profit. Use social media tools like Facebook Audience Insights to estimate the size of your potential customer base. You can also conduct keyword research to get an idea of how many people are searching for your products – and what their projected search volume is for the future.
Not that you know who you’re selling to, it’s time to establish how you’re going to communicate with them. In this section, you need to account for your sales and marketing approach – how you plan to get the word out about your brand and products.
Take what you’ve learned about your audience’s pain points and your competitor’s strengths to inform how you’ll communicate your differentiator. Pay special attention to your website and online channels for dropshipping businesses, as these will be the main touchpoints. It’s also a good idea to outline your post-sales customer remarketing and support plan.
Operations and management
Operations and management details the inner workings of your business. A few areas to cover include:
- Legal structure of your business
- Backgrounds of the prominent figures in your business – remember to highlight relevant experiences and accomplishments for ecommerce and/or dropshipping
- Which facilities, equipment, and warehouse space you’ll need
- Supply chain and order and fulfillment processes
Then, you’ll also want to detail the day-to-day operations. How are orders fulfilled? What tech stack are you using to automate specific tasks? Which reports do you run and how often? What third-party vendors will you be working with? If you’re a new business, include any launch schedules as well.
Now for the money talk. Develop a financial plan that details where you are now and where you’ll be five years from now. This can be challenging for new businesses in particular because you don’t have historical data and trends to go off of. This is where you look back at the other research you’ve done and use that to make financial projections for your company’s profitability.
If you’re presenting your business plan as part of a loan application or other funding request, this is where you make the ask. You’ve already laid why and how your business will be successful, so potential lenders and investors will feel more at ease with the risk. More than a quarter of businesses claim they can’t get the capital they need – you don’t want a poorly written business plan to be the reason you don’t.
Beyond stating and asking for the amount you need, you’ll also need to prove how this extra capital is going to fuel additional growth with your company. Outline where you’ll spend the money, what you’ll be purchasing with it, and how this will generate a return on investment for your biz.
Rounding out your business plan is the appendix. This is where any supporting documentation goes. We tack it on at the end because they can turn a relatively short business plan into an unwieldy, hundreds-of-pages-long document (nobody has time for that).
The appendix is like a reference section. This way, readers who need to validate something from the earlier sections of your business plan can easily navigate to the corresponding documentation.
Simple Business Plan Template
- Business Plan: Company name
- Your name
- Business address
- Phone number
- Website URL
If your business plan is prepared for a specific entity, include a line that says “Presented to:” followed by the individual and/or company name.
Table of contents
- Executive summary ………………………..………. page #
- Company description ………………………………. page #
- Products and services …………………………..…. page #
- Industry overview ……………………………..……. page #
- Market analysis ……………………………….….…. page #
- Marketing plan ………………………………………. page #
- Operations and management …..…………………. page #
- Financial plan ………………………………….……. page #
- Appendix ……………………………………….……. page #
Tip: Keep your executive summary to one or two pages. Remember, this is a highlight reel for what’s to come.
- Company description
- Having writer’s block? Start out with something like: “‘Company name’ is an ecommerce company in the ____ industry and sells _____ to _____.”
- Brief overview of products and services
- Short industry overview
- Truncated market analysis
- High-level marketing plan
- Organization description
- Management team
- Quick financial projections
- Summary of funding request
- Business name
- Location (both where you operate and where you serve customers)
- Founding date
- Legal structure
- Ownership details
- Business ID numbers
- Tax ID numbers
- Number of employees
- Company purpose, mission, and vision
- Current status and stage of business
- Notable achievements or milestones
Products and services
- Description of product(s)
- Product categories (if you plan to sell many SKUs)
- Product development stage
- Screenshots, diagrams, renderings, or photos of the product
- Product manufacturer and supplier partners
- Current pricing
- Past test results
- Anticipated future products and services you plan to introduce
- Order fulfillment
- Total market value
- Total expenditure, globally and regionally
- Industry projections
- Your differentiator
- Positioning within the industry
- Demographics of target market
- Estimated size of total market
- Predicted number of sales
- Why your target market needs your product
- How and what external factors can affect sales
- Competitor sales
- Barriers to entry
- Competitive analysis
- References to market research
- SWOT analysis (Strengths, Weaknesses, Opportunities & Threats)
- Target audience and personas
- Brand and product positioning
- Messaging and taglines
- Marketing channels
- Marketing budget
- Marketing materials and collateral
Operations and management
- Facilities and space needed
- Technology and equipment needed
- Production workflows
- Supply chain management
- Logistics and distribution plans
- Order and fulfillment processes
- Warehouse and inventory management
- Quality control checks
- Legal and accounting needs
- Founders, executive team, department heads, owners, shareholders, board of directors, consultants, and special advisors
- Ownership structure
- List of employees and salary and benefit costs
- Current balance sheet
- Two years of financial records
- Financial projections for the next five years
- Break-even analysis
- Cash-flow projections
- Income and expenses
- Startup cost
- Income statements
- Funding request
- Articles of incorporation and status
- Resumes for included individuals
- Copies of insurances
- Trademarks and patent registrations
- Supporting research data and references
- Business owner credit history
- In-depth market research and competitive analysis
- Site, building, warehouse, and office plans
- Mortgage documents
- Equipment leases
- Marketing brochures and collateral
- Links to your business website
A business plan is necessary not only for third-party individuals, but also for entrepreneurs who need to get their thoughts down on paper. Business plans hold you more accountable and break long-term goals into short-term action plans.
- Determine the audience of your business plan and cater the format and type to them. If you’re applying for a loan, for example, pay extra attention to the financial plan.
- Even though the executive summary comes first, you should write it last. You need the information gathered in the other sections to be able to put it together.
- If it’s getting too long, add supporting documents and comprehensive reports at the end in your appendix. This will show you’ve done the work and provide additional context without overwhelming the reader.
- Your business plan is a living document. Just because you have it written down doesn’t mean it can’t change. And in today’s rapidly changing world of ecommerce, pivoting is becoming the norm. You can also revisit and revise the business plan as needed.
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