How to Write an Effective E-Commerce Business Plan

If you’ve launched a profitable digital storefront without one, create a detailed business plan to sustain your success. Follow these five steps and discover how Chit Chats can improve your operations.

1. Draft an Unambiguous Executive Summary

An executive summary briefly breaks down your business plan’s critical points. It should outline your startup’s basics, clearly informing readers about its nature.

Answer these questions to draft a clear-cut executive summary:

What does your business do? Describe a pain point others have and a gap in the market your company aims to address or fill.
What products or services do you offer? Specify what you plan to sell to satisfy an unmet need.
Who are your target customers? Identify people or companies that would benefit from your products or services, and create buyer personas — fictional characters based on actual people — to illustrate your target customers.
Where do you plan to sell? List the sales channels you intend to use to engage with prospective customers and process orders.
What are your short-term and long-term goals? Write specific, measurable, achievable, relevant and time-bound goals you hope to accomplish.
How do you plan to fund your venture? Explain where your capital would come from to demonstrate your funding strategy while your online business doesn’t make money.

2. Define Your Brand Through Company Overview

A company overview reveals your startup’s story, purpose, aspirations, legal structure and more.

This section should include your business number in Canada, so you should register your company first with the Canadian Revenue Service (CRA) for Canadian tax filing purposes. You can obtain this information after your CRA registration over the phone or through the Business Registration Online portal. Alternatively, you can register with your provincial or territorial government’s business registry services.

Answer these questions to draft an informative company overview:

What is your business name? State the name under which your small business in Canada operates for legal and financial matters.
What is your brand name? Note the name you wish to use to present your company to the world, differentiate it from competitors and build its distinct identity.
What is your domain name? Select a unique domain name for your online store to make your brand more discoverable, memorable and trustworthy.
Where does your business idea come from? Tell a concise story about what inspired you to start an online store and sell what you want.
What is your mission? Say why your business exists and how your target customers benefit from it.
What is your vision? Express what you hope to achieve by fulfilling your startup’s purpose, reflecting your company’s values and goals.
Who is on your team? Name the people behind your venture with their titles.
How is your business structured? Note your chosen business structure to define your company’s organization. For example, incorporating your company creates a separate legal entity, shielding your personal assets from business liabilities.

3. Conduct a Thorough Market Research

Market research paints a picture of your company’s place in the business landscape. Gather quality data from reliable resources to gain insights into market conditions and your competitors. For example, industry observers project that the business-to-business e-commerce market will reach $36 trillion by 2026, and about 43% of Americans prefer shopping online to visiting stores.

Answer these questions to draft a compelling market research section.

What market opportunities do you see? Create a detailed overview of your customer base to determine your total addressable market.
Who are your competitors, and what are their strengths and weaknesses? Identify your primary competitors, why some customers choose them and why others don’t.
What are your company’s competitive advantages? Explain what makes your business better than the competition.

4. Create a Detailed Marketing Plan

A marketing plan outlines your online business strategy for spreading the word about your company and offerings. It should also explain where you intend to advertise and your budget.

Answer these questions to draft a satisfactory marketing plan:

What channels do your target customers use? Discuss what your target customers do on the internet, where they shop, what devices they use, and which organic and paid marketing channels are more effective in reaching them. For example, people visit eBay for rare items and Amazon for everything else.
What strategies do you use to reach them? Devise strategies that match your prospects’ behaviours. For instance, having a mobile-responsive site would appeal to 59% of Canadians who shop on their phones.
Where do you get and store your supplies? Explain who makes the products you sell, where you keep them, and whether you outsource order fulfillment to a third party that handles inventory management, order picking and other related tasks more efficiently.
How do you deliver your offerings? Talk about your online business’s strategy for moving products or providing services locally, regionally, nationally and/or internationally. Many Canadian small business owners use Chit Chats to efficiently process shipments and expand to the United States and beyond.

5. Develop a Realistic Financial Plan

A financial plan proves how economically viable your business idea is. Do the math to back up your feasibility claim or current financial position if your company is already operating. This section is crucial when seeking funding from investors or taking out a business loan.

Answer these questions to draft a sound financial plan:

What are your projected expenses? Calculate your operating expenses based on market research or historical data.
What are your projected sales? Predict your future sales figures and their implications. For example, you must register for a goods and services tax (GST) or harmonized sales tax (HST) account. Both small business taxes apply to companies that Canada doesn’t consider small suppliers. If you exceed the GST/HST threshold of $30,000 in one calendar quarter, you must begin charging taxes on the supply that made you go over it.
How will your company’s cash flow look for the first 12 months of operations? Project how much money you expect to gain or lose in the short term, showing when you expect more cash to come into your coffers than go out over this period.
How much equity do you have in your business? Detail the value of your assets against your liabilities to show your net worth.
What are your financial needs? Explain how much capital you require to sustain or scale your business based on your goals and financial projections.

Lower Your Costs and Grow Your Business With Chit Chats

Incorporate Chit Chats into your online business strategy to draft an impressive e-commerce business plan by demonstrating considerable savings as you sell to international shoppers. Get in touch today to learn how Canadian entrepreneurs enjoy lower shipping costs.

Author Bio

Known for his expertise in industry dynamics, Jack Shaw serves as the editor of Modded. Through his insightful analysis and practical advice, Jack seeks to empower readers with the knowledge to thrive in the ever-evolving corporate landscape, guiding them toward success in their professional endeavors.