Building A Business Plan For An E-Commerce Project
By Brian Walsh
If you're the manager of a proposed new e-commerce site, you have to take the good news
with the bad. The good news is that there's still lots of opportunity for growth. The bad news is that you have no room
While the e-commerce market is still in its infancy, if you're starting now, you're starting late. Your board of directors
knows the Dell and Amazon.com Web success stories, and the expectations are high. So are the stakes: The price
tag for a business site of even moderate complexity will easily outrun the cost of most luxury homes, and you'll still be
building it a year after you start. And for all that expense, developing an e-commerce site carries a fair share of risk.
Not all projects will be on time, on budget, deliver all promised features or reach all projected customers.
To give yourself the best shot at e-commerce success, you must create a solid business plan; successful sites just
don't spring up with borrowed talent and haphazard funding. For our purposes, an e-commerce business plan will
describe the fundamentals of your business--all Internet development activity must feed an overall business goal--as
well as provide guidance for staff and implementation, and forecast capital payback and profitability. The trick to
formulating your plan is to encourage flexibility and creativity, and to remember that the plan describes a project;
don't let it become an overwhelming project in itself.
Answering the Basic Questions
You may not realize it going in, but implementing an e-commerce site makes you an entrepreneur. Your site will turn
a profit, break even or lose money based on its cost versus revenue from goods sold. Management won't release
capital until it can see when, and under what conditions, its investment will pay off. Whether your site represents a
start-up company or a division of a larger corporation, there are several strategic questions you must answer: What is
our competitive model? What issues will we have with our channel? Which of our products does it make sense to
Once you have addressed the macro issues, a second level of questions arises: Who will we reach with this site? Is
our message aligned with corporate goals? When will this site make money? What tasks and technology will make it
a success? And where will we get the resources to bring it to fruition?
Your answers will be delivered in what is essentially a four-part plan: marketing, business, project and staffing. (A
discussion of the project segment could probably fill this magazine on its own, and is outside the scope of this
article.) Together, they match technology, external resources and your firm's strengths to market opportunities.
Marketing: Think "Outside the Box"