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Starting out with a great business plan is especially important for online startups (like blogs, professional sites & eCommerce stores) because knowledge and understanding rule the highly competitive Web based economy.
A great business plan can help you learn how to startup online, while avoiding some of the most common pitfalls that prevent many aspiring entrepreneurs from making sustainable profits.
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A business plan helps entrepreneurs understand their business, its value offering and the market. It also offers evidence of competence and motivation for potential investors.
In reality, the Internet is just like any other type of medium. With a good idea, proper research, an understanding of the niche and target markets, and the skills and determination to drive growth, you can be successful.
So, if you need to understand the challenges posed by online enterprises then our free outline (ideal as an eCommerce business plan) is just what you need to get started.
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Test the viability of your business idea. Create and manage forecasts and budgets to work out how much money you need to get started.
Remember, it's important to be prepared before you actually begin working - there is a lot of information you will need to research before being able to complete every section. It pays to know beforehand what, where, when and who you will need in order to successfully complete a plan, to the standards required of potential investors.
Even if you aren't trying to find investors, or get a loan from a bank, the act of researching and completing a business plan is a worthwhile exercise.
After completing a proper plan, you will have a much better understanding of what is required to get through launch and become operational, and how to go about it.
Business plan template
SME Pals' template comes in a pretty standard format, and is intended for small or home based online startups. But, what makes this particular plan unique is that it has plenty of links, resources and advice that will help you find the right information quickly and easily.
The remainder of this article is a copy of the download for you to explore before getting started - once you're ready, download the WORD version, and fill it in.
Table of contents
Company description & overview
Products and/or services
Organization & management
Expenses & capitalization
Let's look at each of these in more depth
1. Executive summary
An executive summary is read first by investors and banks, but completed last by the applicant (you).
Think of it as your elevator pitch. Once you have researched and understood every aspect of the idea/startup, it is now time to distil it all down into a professional summary.
Professional, yes. But convey your excitement and enthusiasm too. After all, people invest in other people and they want to know that you have the energy and drive to see it through.
2. Company description & overview
Complete this section with a mission statement, a list of objectives, and an overview of the market and your niche. This is especially important for eCommerce websites because online retailing is a very competitive industry, and it is hard to compete directly with the likes of Amazon.
Include motivation as to why your company is going to succeed in this market. What skills and insight do you have that sets you apart? Bloggers, for example, might want to talk about published articles or books, or noteworthy things about themselves that help to bring a unique perspective.
3. Products & services
The Internet is unusual in the sense that your product may also be your marketing. Bloggers deal in content, and content is also the way they market their blog and drive Web traffic and revenue. Unless you are starting an online shopping site, or offering traditional services via a website, then the product you are selling is information, in the form of content.
If you do intend selling physical or digital products, then describe what gives your products an advantage in the market - arguably one of the most important aspects of any eCommerce business plan.
4. Sales & marketing plan
Online marketing is a whole new ballgame, and there is a lot of research required in order to succeed in this arena. Getting your message in front of the right audience can mean the difference between success and failure.
LivePlan has a paid offering that can help you to put together a professional, well organised sales and marketing plan.
You can also learn some neat tricks about online marketing to kickstart early phase growth and bring in customers and money quickly.
Research aside, the fundamental basis of any good Internet marketing strategy is high quality content. Without great content it will be difficult or expensive to generate a flow of highly targeted, high converting Web traffic.
Your plan will need to include a content publishing strategy based on SEO and online marketing strategies as well as in-depth research into competitors and the level of competition in your niche.
5. Operational plan
Operations for online startups are generally simpler than traditional businesses. The exception is eCommerce, which requires an understanding of the entire supply chain from manufacture and storage, to distribution, and so on.
Otherwise, focus on what personnel, skills, equipment and services are needed in order to work efficiently and grow quickly.
Even if this is a one person show, it is still important to understand what tasks are needed to operate smoothly.
Who's going to create content? Who's going to manage the servers? Who's going to handle taxes, invoices, accounting? Do you have an accountant, or legal adviser? What about consultants?
Remember that your local chamber of commerce (along with the SBA, SBDC & SCORE) is probably a great place to find out all sorts of information and advice about how to get started.
7. Expenses & capitalization
Another area where Internet companies have an advantage over traditional enterprises is in startup costs, which can be very low indeed. Depending on the type of Web platform required, the cost of creating content, marketing & advertising, it is possible to get away with relative low startup and operating costs.
Be sure to think carefully about how much everything will cost (startup costs have a way of being a lot more than people plan for), what funds are being brought in, who is providing them, and what conditions are attached.
8. Financial plan
Include a detailed one year profit and loss projection. This part is often pretty frustrating because it is often a thumb-suck - even if you have done your homework. The main thing to know is whether it is possible to operate long enough to start generating a stable stream of income and become profitable.
Also important are:
Cash flow analysis
Opening day balance
MoneyWeek did a pretty good job of explaining what a cash flow statement is. Definitely worth a watch:
Starting an online venture is such a diverse and dynamic challenge that you'll probably end up looking for all sorts of weird and wonderful bits of information, at one point or another.
The purpose of this template is really to help owners get started. If the information in this plan is not sufficient to meet your needs, there are excellent, professional templates and software packages available (see below).
Here's a list of articles and resources that should help get you going:
What did you think of our plan? Did it help you to discover important and valuable information about your operation? What else would you like to see covered in this template? Share your startup tips and advice in the comments.
There's a stack of really mediocre instructional clips on everything from writing a business plan, understanding the science of marketing, or improving SEO and ranking higher in Google.
You could probably spend weeks combing through everything, but like most entrepreneurs you probably don't have the time.
That's why I've collected five of the most useful and important YouTube clips to help you get the basics right - especially when it comes to ensuring your business and website get the most from the Internet.
An SME (Small & Medium Enterprise), sometimes called an SMB (Small & Medium Business), is any business under a certain size. With so many differing definitions, we focus on the people responsible. Smart Modern Entrepreneurs.