The Business Plan of an E-commerce Activity

As we pointed out, several points are critical in the financial part of the project, namely: the presentation of the working tool (online store), its design and the marketing strategy.

To ensure the project’s commercial success, market research is essential. Finally, the skills and experience of the team leading the project must be adequate to succeed in e-commerce.

At the level of the financial part of the business plan, there are several essential elements regarding investments, turnover, and expenses to be budgeted. Also, we advise you to read this mini guide: the business plan.

Investments Related to the Website

The first financing of a project of this type is the cost of designing your online store. The amount of cost to budget depends on your site project, what you plan to delegate and the desired level of quality.

To integrate the investment to forecast in your business plan, it is advisable to ask quotes to the web agencies which interest you. The communication of the specifications is necessary for the preparation of the estimate.

Depending on your marketing strategy, the costs of communication and advertising planned for the launch of the online store can be very important. However, in accounting, these expenses are not investments but expenses.

Finally, your project may require IT investments (computers, servers, computer network, security, etc.).

Forecast Turnover

The turnover includes all planned sales of the company (sales of goods or purchases of services) throughout the forecast.

The estimate of projected turnover is exceptionally complicated for e-commerce activity. It is a distribution channel in full development, allowing the implementation of many different multi channel fulfillment strategies, and with intense competition. Besides, the web is continually evolving.

It is therefore somewhat uncertain to project oneself over several years and to rely on competitors’ figures.

Expenses to Predict

First of all, it is necessary to correctly evaluate and budget the forecast purchases of products and other goods marketed on the e-commerce site. Estimated investments are valued based on forecast sales, planned inventory and expected commercial margin. Tariff negotiations with future suppliers justify the proposed expenditures and the margin rate.