Preparing a business plan will help you assess the project and the e-commerce industry. It can help position your business better in the niche you want to cater to. The business plan does not necessarily be a complicated one. A straightforward plan with the necessary projections based on your expectations and gathered data will help you map out and have a clearer view of what you want for your business. It will also serve as a business manual.
Let’s discuss below the significant factors to consider in starting an e-commerce business.
1. Product
Identifying the product/products to offer and knowing their competitive edge will give you a chance to compete in the existing market. Your product should have enough demand but not yet a saturated market.
2. Target Market
Who is your target demographic, and what specific locations are you catering to?
3. Competitors
Do some benchmarking and identify your competitors. Know their products, pricing, and what are their competitive edge. By knowing your competitors, you can better position your business.
4. Pricing
Depending on your product offering, pricing strategy may vary. You can choose to sell for premium prices or cater to the general population for essential products at more affordable prices.
5. Marketing Strategies
To reach out to your target clientele, you need to come up with effective marketing strategies. Especially that you are an online business, you must build a strong presence online. The most cost-effective marketing strategy is social media campaigns. You can also use email marketing, display ads, content marketing, search engine optimization, and other marketing campaigns.
6. Distribution
You can choose to do dropshipping or have your inventory. Both have ups and downs. Doing a dropshipping business only needs a low investment since there are no on-hand products and warehousing. However, dropshipping also has lower profit margins.
On the other side, having your inventory gives you more control over what to sell, an opportunity to earn higher profit margins. The downside is, you will need a more extensive investment compared to dropshipping. Depending on capital and time availability, you can choose what works best for you.
7. Website Development
Your website must be user-friendly, where prospective customers can easily browse through your product offerings. It must have a great design and persona. If you are not good at website development, you can hire an expert to do it for you.
8. Management
Starting your online business would require ample time from you. You need to work extended hours, especially during the early stage. You are still in the trial-and-error stage of your business, learning what works or not. Hiring employees will follow once you are up and running.
9. Financial Projections
Assessing the financial viability of your business is the deciding factor if to pursue the project or not. It will help you project revenue and costs, the ins and out of cash, and the needed capital before the business can stand on its own. There are available online financial model templates you can use.
You will be more ready to start your online business as you evaluate its different aspects, explicit about what to do in achieving your business goals.
