Business Plan for Online Store

[Liz Rice]

Hello - First time post...

I'm working on a business plan to open an online store. Initial costs I can fathom out, so far so good, it's how on earth I attempt to work out projected sales that has thrown me.

If I go ahead, I'll be selling accessories, lifestyle & homewear (think Oliver Bonas but on an initially much smaller scale with less stock and more personal touches) - no clothes, liquids or electronics.

I know that the sales (which I intend to push heavily through social media) will be slow to start with and it's all about time put into SEO/keywords & marketing and the response to my social media/brand, but how to put any guess in for how many actual sales (not even figures) I'll make in month 1/2/3 based on this? Can anyone advise me at all if they worked out any kind of a plan?

I'm intending on using Squarespace and will be using a mailing house for local storage/shipping, my area is really the marketing and promotion side of things.

It's a question I just can't answer myself - am I just going to have to give it a go and see? Doesn't seem to fit with all my other 'planning' going down that route... Huge thanks for your thoughts!

 

[fisicx]

Maybe 10 sales in month 1. Could double in month 2 and be back to zero in month 3.

Or you could be lucky and get one product that sells hundreds each week.

The numbers all depend on how good your marketing and unique and desirable the products.

Lifestyle and homeware is highly competitive, you could spend thousands and still not get decent sales.

 

[Mark T Jones]

Obviously sales an d marketing plan are closely tied in - it will be a mix of suck-it-and-see and research. (the mix is up to you!)

For cashflow planning purposes my usual advice is - round 1, just chuck figures in boxes and see what happens. Each subsequent round you challenge and adjust the figures. There should be a lot of subsequent rounds!

 

[Daybooks]

A business plan like any budget is about achieving an objective. Set your objective and then determine the incomes and expenditures necessary to achieve it. It will be iterative as you may find certain goals not attainable given available resources and therefore may have to revise the objective or find the resources.

For your sales identify as many metrics and drivers that will influence it as possible. If comparative data is available then use it. What do you know about supply and demand for your product and services? Question all your assumptions.

Your plan as well as giving a profit and loss statement must include the balance sheet which will then give further credibility to it identifying any cash flow issues. The business plan isn’t just financial. When you understand your objectives and what you have to do to achieve it, in my view you have a better chance of achieving it. Good luck.

 

[Shopclicks]

My advice is going to be a little different. Forget the business plan until you're going into business.

Buy some stock.
Create social media pages, Insta, Facebook, TikTok.
Create short videos of your products and take your own lifestyle photos.
Post multiple times a day on all channels.
Create an ebay profile and open an eBay store when you've sold enough items.
List your stock on FB Marketplace.
List your stock on Etsy.

None of this will cost you anything other than buying stock and selling fees if you sell.

Do this until you've proven you can buy, sell and make money.

Then complete your business plan and create your website. I'm sure you'll have a better idea of how much you can sell.

Keep the other sales channels going and direct customers to your website for their next purchase.

Getting stuck on a business plan is just an excuse for not starting today.
Enjoy!

 

[Mark T Jones]

My advice is going to be a little different. Forget the business plan until you're going into business.

Buy some stock.
Create social media pages, Insta, Facebook, TikTok.
Create short videos of your products and take your own lifestyle photos.
Post multiple times a day on all channels.
Create an ebay profile and open an eBay store when you've sold enough items.
List your stock on FB Marketplace.
List your stock on Etsy.

None of this will cost you anything other than buying stock and selling fees if you sell.

Do this until you've proven you can buy, sell and make money.

Then complete your business plan and create your website. I'm sure you'll have a better idea of how much you can sell.

Keep the other sales channels going and direct customers to your website for their next purchase.

Getting stuck on a business plan is just an excuse for not starting today.
Enjoy!

This us certainly a case where actually doing it can preceed and contribute to the plan - unlike b & m business, where the plan really needs to come first

 

[antropy]

I'm working on a business plan to open an online store. Initial costs I can fathom out, so far so good, it's how on earth I attempt to work out projected sales that has thrown me.

There really is no way to know until you do it.

I'm intending on using Squarespace and will be using a mailing house for local storage/shipping, my area is really the marketing and promotion side of things.

It's a question I just can't answer myself - am I just going to have to give it a go and see? Doesn't seem to fit with all my other 'planning' going down that route... Huge thanks for your thoughts!

Our own online shops start slowly and then sales build up over the months as their SEO rankings improve.

Paul.

 

[Liz Rice]

Maybe 10 sales in month 1. Could double in month 2 and be back to zero in month 3.

Or you could be lucky and get one product that sells hundreds each week.

The numbers all depend on how good your marketing and unique and desirable the products.

Lifestyle and homeware is highly competitive, you could spend thousands and still not get decent sales.

Thanks for your reply. Having gone out to my own network on this query last night I see that really all I can do is work with people I know, strive for great reviews and then yes it's 100% marketing in whatever form that takes. I'll work on my local market first, my usps - small business etc etc. I do see that the market is highly competitive, which tells me there is a desire for the products so I've got to work out how to get mine out there without spending thousands - as I don't have that. I'm thinking about starting up a blog about my journey into this business, to basically start gathering interest and customers before I launch...will help with market research on product selections too. A lot to do - Thanks for your reply, really appreciated.

 

[Liz Rice]

Obviously sales an d marketing plan are closely tied in - it will be a mix of suck-it-and-see and research. (the mix is up to you!)

For cashflow planning purposes my usual advice is - round 1, just chuck figures in boxes and see what happens. Each subsequent round you challenge and adjust the figures. There should be a lot of subsequent rounds!

Hi Mark, Thanks for replying. I like this approach! I had chucked some quite bold figures into boxes which I am now looking at streamlining - down..... but I think you are right, that can be the only way until I actually see what comes in - what works and what doesn't. Thanks.

 

[Liz Rice]

A business plan like any budget is about achieving an objective. Set your objective and then determine the incomes and expenditures necessary to achieve it. It will be iterative as you may find certain goals not attainable given available resources and therefore may have to revise the objective or find the resources.

For your sales identify as many metrics and drivers that will influence it as possible. If comparative data is available then use it. What do you know about supply and demand for your product and services? Question all your assumptions.

Your plan as well as giving a profit and loss statement must include the balance sheet which will then give further credibility to it identifying any cash flow issues. The business plan isn’t just financial. When you understand your objectives and what you have to do to achieve it, in my view you have a better chance of achieving it. Good luck.

Hello, Thanks for replying to my long question. I do have a specific objective, which is a big figure to fund something specific in my retirement.... Frustratingly I have no metrics or drivers to work with, no other online business is going to chat to me about how they built their sales from scratch but I have lots of ideas on how to do this now which I'm going to flesh out before I step any further to see if I can actually achieve this. Really appreciate your reply - thank you.

 

[Liz Rice]

My advice is going to be a little different. Forget the business plan until you're going into business.

Buy some stock.
Create social media pages, Insta, Facebook, TikTok.
Create short videos of your products and take your own lifestyle photos.
Post multiple times a day on all channels.
Create an ebay profile and open an eBay store when you've sold enough items.
List your stock on FB Marketplace.
List your stock on Etsy.

None of this will cost you anything other than buying stock and selling fees if you sell.

Do this until you've proven you can buy, sell and make money.

Then complete your business plan and create your website. I'm sure you'll have a better idea of how much you can sell.

Keep the other sales channels going and direct customers to your website for their next purchase.

Getting stuck on a business plan is just an excuse for not starting today.
Enjoy!

Hello - Oh now this I like! I am stuck in 'Business Plan' mode and actually it is totally trapping me into lack of action..and a million reasons that it could all fall over - all very negative. I love this idea of just getting the stock in and giving it a go, but I'm nervous about how this could impact the whole 'brand' I'm going for e.g I dislike Ebay with a passion and wanted to do something much more slick. BUT having read your comments above I will look at Etsy and see if I can give it a go. Further question for you specifically, approaching suppliers re goods I was planning on going to the forthcming summer trade shows to see products and meet people - what do you think? Worth doing? Thanks so much, Liz.

 

[fisicx]

Nobody really cares about your brand. All they care about are the products not the supplier. Once you are established customers might return because of the range you offer. But right now, focus on sales not the brand.

 

[Liz Rice]

Nobody really cares about your brand. All they care about are the products not the supplier. Once you are established customers might return because of the range you offer. But right now, focus on sales not the brand.

OMG - this is a bit of a shock to my system, in fact a painful one - but I am listening....coming from a Comms & Marketing background this actually hurts, but I understand - product is everything. Thanks so much.

 

[fisicx]

Think about how you buy things. If you want a green cushion what do you do? Many will look on Google images, eBay Amazon, etsy, not on the high street or even Facebook.

On any of these people may see your name and recall a previous purchase but it’s not a major buying signal.

The huge number of online sellers has diluted the strength of retail brands.

 

[Shopclicks]

Further question for you specifically, approaching suppliers re goods I was planning on going to the forthcming summer trade shows to see products and meet people - what do you think? Worth doing?

Yes absolutely. Meet as many people as you can. Relationships with suppliers can make or break a business and will determine what is offered to you down the road. Do as much research as you can about suppliers before you meet with them.
It would be wise to stay niche to start. So, for example if handbags were on your list for the big picture store, just start with a small range of handbags. You're going to have minimum order quantities, so staying niche will help with that.

I'm thinking about starting up a blog about my journey into this business, to basically start gathering interest and customers before I launch...will help with market research on product selections too.

Brilliant! Use snippets as social post content and link to the blog. Start today!

 

[Liz Rice]

Yes absolutely. Meet as many people as you can. Relationships with suppliers can make or break a business and will determine what is offered to you down the road. Do as much research as you can about suppliers before you meet with them.
It would be wise to stay niche to start. So, for example if handbags were on your list for the big picture store, just start with a small range of handbags. You're going to have minimum order quantities, so staying niche will help with that.


Brilliant! Use snippets as social post content and link to the blog. Start today!

Thank you - I'm going to get on to it all .

 

[Liz Rice]

Think about how you buy things. If you want a green cushion what do you do? Many will look on Google images, eBay Amazon, etsy, not on the high street or even Facebook.

On any of these people may see your name and recall a previous purchase but it’s not a major buying signal.

The huge number of online sellers has diluted the strength of retail brands.

OK so from what you are saying photography is going to be everything here. Thanks so much.

 

[Daybooks]

Hello - Oh now this I like! I am stuck in 'Business Plan' mode and actually it is totally trapping me into lack of action..and a million reasons that it could all fall over - all very negative. I love this idea of just getting the stock in and giving it a go, but I'm nervous about how this could impact the whole 'brand' I'm going for e.g I dislike Ebay with a passion and wanted to do something much more slick. BUT having read your comments above I will look at Etsy and see if I can give it a go. Further question for you specifically, approaching suppliers re goods I was planning on going to the forthcming summer trade shows to see products and meet people - what do you think? Worth doing? Thanks so much, Liz.

Sounds like your Business Plan isn't trapping you in to lack of action but rather delivering a dose of reality. I believe the quote from Benjamin Franklin is appropriate "If you fail to plan, you are planning to fail." Had a client who never understood budgets and always preferred the mystery tour. When the business was sold it came with a lucrative earnout clause. Everything that previously was not understood about budgets suddenly was.

If you ditch the planning because you don't like what it says and go ahead anyway you are more likely to underachieve on that! The good news of course is that it is your choice. Good luck.

 

[Shopclicks]

If you ditch the planning because you don't like what it says and go ahead anyway

Nobody suggested ditching the plan. Just do it at a time when there are some facts and experience to include.

 

[Daybooks]

Ditching or delaying amounts to the samething. Reading between the lines the OP’s Business Plan thus far suggest a rocky road ahead and therefore a possible rethink of objectives, resources and /or timings. Build the plan later after having spent an unknown amount of money or do it now when you both know how much is at stake and importantly can make some informed decisions about what might be needed to make it a success based on the information learned from the plan.

Remember whilst you are not doing business planning your successful competition probably are. You pay your money; you make your choice.

 

[Shopclicks]

OK so from what you are saying photography is going to be everything here. Thanks so much.

@fisicx mentioned - eBay Amazon, etsy, not on the high street or even Facebook.

Look at their customer journey and implement the best of it. They have brandnames and reputations for a reason (even if we don't like them). You can't always compete on price but you can always win on customer experience. Customers will remember an experience far longer than the price.

 

[Shopclicks]

Remember whilst you are not doing business planning your successful competition probably are. You pay your money; you make your choice.

"The opposite of a good idea can also be a good idea."
Rory Sutherland

 

[Daybooks]

"The opposite of a good idea can also be a good idea."
Rory Sutherland

With a plan you can prove both or otherwise; or of course leave it to guesswork.

 

[Shopclicks]

With a plan you can prove both or otherwise; or of course leave it to guesswork.

I would have thought sales projections pulled out of thin air, without sales, marketing efforts or plausible prices & margins, would somewhat skew the plan and render a guess.

 

[Daybooks]

I would have thought sales projections pulled out of thin air, without sales, marketing efforts or plausible prices & margins, would somewhat skew the plan and render a guess.

May I refer you to my original posting in its entirety.

 

[Shopclicks]

May I refer you to my original posting in its entirety.

I've read it again and it's still not going to help the OP. It's like filling in the blanks with more blanks.

What do you know about supply and demand for your product and services?

That would be zero at this stage.

 

[Mark T Jones]

Hello - Oh now this I like! I am stuck in 'Business Plan' mode and actually it is totally trapping me into lack of action..and a million reasons that it could all fall over - all very negative. I love this idea of just getting the stock in and giving it a go, but I'm nervous about how this could impact the whole 'brand' I'm going for e.g I dislike Ebay with a passion and wanted to do something much more slick. BUT having read your comments above I will look at Etsy and see if I can give it a go. Further question for you specifically, approaching suppliers re goods I was planning on going to the forthcming summer trade shows to see products and meet people - what do you think? Worth doing? Thanks so much, Liz.

I get the sense that you might be falling into the business plan trap of trying to create an impressive, glossy sales prospectus, rather than a simple plan of how the business will operate and where it is going.


Also, it isn't a finite documents, it is a continuous work in progress. Legend has it that Mercedes Benz still use the same business plan that they wrote on 1901 - except every bit of it has changed.

Conclusion - keep working on the figures and plan - let the ongoing activity contribute to it.

 

[Mark T Jones]

OMG - this is a bit of a shock to my system, in fact a painful one - but I am listening....coming from a Comms & Marketing background this actually hurts, but I understand - product is everything. Thanks so much.

There is value in brand, but it typically comes either from established commitment or from huge amounts of time & money positioning yourself.

I know which online retailers I prefer for bike bits - based on both recommendation and experence.

On the other hand, Not On The High Street have invested heavily to convince me they are a great place for quirky gifts.

I don't know lots about marketing, but I do know one thing - It's all about understanding who your customer is.

 

[TPC_UK]

Hello - First time post...

I'm working on a business plan to open an online store. Initial costs I can fathom out, so far so good, it's how on earth I attempt to work out projected sales that has thrown me.

If I go ahead, I'll be selling accessories, lifestyle & homewear (think Oliver Bonas but on an initially much smaller scale with less stock and more personal touches) - no clothes, liquids or electronics.

I know that the sales (which I intend to push heavily through social media) will be slow to start with and it's all about time put into SEO/keywords & marketing and the response to my social media/brand, but how to put any guess in for how many actual sales (not even figures) I'll make in month 1/2/3 based on this? Can anyone advise me at all if they worked out any kind of a plan?

I'm intending on using Squarespace and will be using a mailing house for local storage/shipping, my area is really the marketing and promotion side of things.

It's a question I just can't answer myself - am I just going to have to give it a go and see? Doesn't seem to fit with all my other 'planning' going down that route... Huge thanks for your thoughts!

Hi, I'm a digital consultant and I've launched a couple of start ups over the years. Firstly I'd highly recommend you look at either Shopify or WordPress/WooCommerce over SquareSpace or Wix - both are much more mature platforms, and are better for SEO for a whole multitude of reasons which I can elaborate on should you wish. I used to get a lot of work migrating people AWAY from those platforms due to poor performance, especially on SEO (FWIR the crux of the issue comes down to shared IP addresses used for SquareSpace and Wix).

This is definitely a give it a go and see situation - if you know there's demand and you have clients/customer base in mind just go for it. Just be mindful of tasks you have to carry out as things like standard operating procedures will evolve over time as your business grows and will be invaluable when you employ staff. Re. the actual business plan, start with a loose framework, double check there's demand for what you want to sell, set milestones and set and measure KPI.

Branding and your core message is key, try to define a niche and tie it in with a trending topic (eg for interiors, sustainability, natural materials, interior design trends etc) and that it is clearly defined on your website. A cheaper route to market could be to work with established brands that already have demand, trying to establish a new product requires significant energy and investment in marketing - you could use an existing products demand to gain traction for your own in the future. I imagine drop shipping is also very viable in your niche, given the size of some of the products (furniture etc).

As a new business you'll also be lacking in social proof, so try to get friends and family to engage with you and your business across social channels and share content. Guest blogging, video interviews, use platforms like HARO to share your expertise in interiors to help promote your brand. Loads you can do on that front.

My wife launched a children's toy boutique store on WooCommerce which for the first 3 months sold in very small volumes almost exclusively to friends and family. Once SEO gained traction and we had accumulated enough sales to be able to afford paid marketing, to offer discounts and free gifts to influencers, and we bagan collaborating with bloggers in our niche (PR) we saw significant growth to the point we had to migrate to a 3PL to keep up with demand. It's success was mainly down to the brand message and her eye for trending product. Sadly that business was killed due to brexit / covid perfect storm situation that lead to supplychain collapse and being unable to claim VAT back as one of our main suppliers were based from Denmark.

Hope some of this is useful to you!

 

[Will_Authentic_Style]

My advice for a new business like this would be to get something up and running website wise, along with a couple of social media channels ASAP.

Every day of inaction is a day your website ranking on Google could have been improving and your DR (domain rating) growing.

I think you can plan and plan but you'll never know until you get stuck in.

Once your website is up and running and you're being consistent on social media, you can start to learn how people are finding it, how they are interacting with it and then make adjustments accordingly.

A website will never be perfect... See it as something that is always evolving.