A Business Plan is a document detailing a business setup. It defines the company’s objective and its future goals and the strategies implementing which the company will head towards achieving its goals. A business plan acts as a guide for a firm, it maps the way to a successful business.
A study shows that a good business plan increases the chances of business growth by 30%. Hence a business plan adds to the overall growth of an organization.
Similarly, for an online business setup, curating an effective online business plan results in a flourishing business venture.
Here in this article, we will cover the important points that will help you understand how you can create an online business plan for helping your business grow and successful marketing. Let’s begin by understanding the importance of a business plan.
Why is a Business Plan Important
A Business plan is of great importance to your business venture. Many businessmen don’t begin by creating a formal business plan, but in due course, they modify it as per the changes. Thus before heading to how to make a business plan, let us discuss why creating a business plan is important for your business.
Planning: Planning is an essential element of a business. Creating an online business plan helps you to draw the future plans and goals of your business. It gives you an idea of your business scope and the need for certain resources that may arise in the future.
Research: Creating a business plan requires researching your potential customers, investors, and marketing conditions. It helps you to formulate effective business strategies for future operations and discover new business ideas.
Funding: An online business plan helps in procuring funds for your business, A well-written business plan will attract potential investors and help them build their confidence in your business. It will also assist in curating a step-by-step financial plan for your business.
Objective: A business plan helps in determining the goals and objectives of a business. It helps a business to achieve its target in a more organized way.
Collaborations: When you look forward to collaborating with other companies, your business plan will help them to make their decision. A clear future objective, growth strategy, and target audience help companies decide whether it is good for them to work with you.
Components of Business Plan
A Business plan comprises certain components. Let us now discuss the components of a business plan.
Executive Summary: The first and critical component of an online business plan is writing an executive summary. It summarizes your overall business plan as a whole and highlights the aspects that your business plan covers.
Business Description: The next component comes the business description. It provides a comprehensive account of your business and its products and services, audience, strategies, etc. It also includes your business experiences if any such as collaborations, etc.
Product and Service Description: Next comes the product and service component. This section of an online business plan details the products and services that your company offers. Include all the relevant details about your products such as their manufacturing, durability, requirements, costs, etc.
Market Analysis and Strategy: This component aims at conducting a market analysis by researching and identifying the nature and details of your target customer base. Such as their geographical location, needs, demand, and demographics.
Marketing and Sales plan: This section of your online business includes information about your plans for marketing and selling products. It includes your anticipated marketing strategies, pricing policies, selling proposal, and market competition.
Management and Organization Description: This component details the management and organization strategy of your business model. It includes the company leaders, their qualifications, and organizational roles.
Exhibits and Appendices: The final component of your online business plan supports the details outlined in the plan as a whole. It assists the viability of your business plan and helps investors get a clear vision of your business.
Steps to Create a Business Plan
Creating an effective business plan is very vital for a profitable business. We will now discuss some of the tips that can help you create a productive business plan.
Know Your Audience
When you know who will be reading your business plan, even if you are writing for self-purpose, you can cater to the vital needs and requirements of your business. This can help you to ensure that the relevant details are included and the less impactful ones are avoided.
Determine Your Goals
Having a clear goal will help you draw the most effective business plan for your business. It can help you analyze the work environment better and take the necessary initiatives as needed.
Invest adequate time in researching the multiple aspects of your business. Your business plan will detail your ideas and vision hence the information should be reliable. Research your target market, the demand for your products and services, and your competitors.
Keep it Precise and Direct
Your business plan should be brief and to the point. No matter who your target audience is, your business plan should be easily readable. Try to keep it around 15 to 20 pages. You can attach additional valuable documents as appendices.
Steps for Planning Business Strategy
In the upcoming section, we will take a look at the steps which you can follow while you plan your online business strategy:
A Business That Adds Value
First, for a good online business plan, you must create a product or service which can add value and fill the supply-demand gap in the market to survive the competition.
Copywriting is important because it is the key to convincing your consumers. You have to write compelling and creative copy, which creates demand for your products and services.
Create a Website
Design a website for your business start-up. A website gains huge traffic; hence it can help in fetching customers to your business. Your website must include a pop-up that can take the consumer’s contact details. This will make email marketing easy for you.
Take Advantage of Search Engines
PPC or pay-per-click is one of the best methods to increase traffic on your website effectively. PPC ads appear on the top when the consumer searches specific keywords. This enables you to become creative with your selling approaches so that your business can rank high.
When someone provides you with their email ids on your website, it reflects their strong interest in your products. You can keep your customers updated with the latest products launched or new uses of them through email copies.
Developing a lifetime value consumer is one of the tedious tasks in creating a business plan. You need to provide them with the same quality products or services you have provided at their first purchase. You can turn these consumers into “Word of mouth” campaigners by rewarding them with giveaways or by providing the best value for the investment they make in your products or services.
Online Business Plan- Key takeaways
In this article, we have discussed what an online business plan is, its importance, and the tips that can help you create a productive business plan for your e-business. In brief:
Online Business Plan is necessary before you step into e-commerce as knowing the work environment will help you deal effectively with it.
You must have a good business idea that can add value to the consumer and fill the demand and supply gap.
It is important to have good knowledge about the internet and online tools, which will be the core part of your online business.
Develop trust and value among your target consumers to thrive in the e-commerce business.
Have a thorough knowledge of the legal procedures involved in the online business to avoid unwanted situations.
So, follow the steps above to create your online business plan and give it a shot.
Frequently Asked Questions
Q.1 What are the basic steps for an online business plan?
Ans. The basic steps for an online business plan are:
Know your target market.
Set a business goal.
Perform thorough research to identify the nature of the audience, demand for your products and services, and the working of your competitors.
Design an effective strategy.
Gather the relevant information and add all the components to your business plan.
Q.2 What online business plan does one need to make before starting a business from scratch?
Ans. When you start an online business plan, you need to plan everything in detail. It would be best to understand that the online market has a competitive environment, and you have to survive in it. For that, you will need to have a clear idea about your products and services and the consumer base you will target. The next thing you must consider is the tools you use for increasing your reach.
Q.3 What are the tools for a successful online business plan?
Ans. Some tools for a successful business plan are
HubSpot: HubSpot assists in sales and service, obtaining contact details of companies, and e-mail marketing.
Clearbit: This tool can help in acquiring and building your network with small businesses that can bring profit or consumers for your business.
Google Analytics: These tools help in tracking the website visitors and knowing consumer interest, demand, and lastly, the performance of your competitors.
Q.4 What are the laws in India for online business plans?
Ans. The Indian laws for an online business plan are:
Company or LLP Registration
IT Act (2000)
Payment and Settlement System Act
Consumer Protection Act (2009)
You need to have a Bank Account in the name of your business from where all your transaction takes place.
It is important to agree with the Payment gateways.
Some legal agreements both with the government and the IT Companies for fair conduct of business online.
Q.5 What are the three significant things we need to consider while doing an online business plan?
Ans. The three core things you need to consider while starting your online business are:
Understand your target consumer and the product or service you are going to offer to them.
Clear all your legal procedures to avoid any controversy and legal trouble in the future.
Have a good understanding of the Internet and the tools you will need to increase your business’s reach.
Q.6 What are the 4 types of business plans?
Ans. A business plan can be divided into 4 distinct types. Based on the nature of a business and the conditions prevailing in its surroundings, specific plans can be implemented to ensure the ethical functioning of the business model. The four distinct business plans are:
Short Plans or Miniplans
Decks or Presentation Plans
Q.7 Do you need a business plan for an online business?
Ans. The answer is yes. Be it an online business venture or offline, a business plan is needed in both cases. A business plan acts as a roadmap that directs the business toward the achievement of its goals. It helps a business model analyze its environment, anticipate future changes, and deal with them accordingly. An effective business plan is important for a successful business.