Online business is much like the traditional brick and mortar business. You start out with an idea, knowledge, or a service and you build on it. However, the mistake that all too many online businesses make is to think they can charge in without a solid business plan.
Perhaps this error is encouraged because it takes little in the way of investment to start up some online businesses. However, in order to encourage their growth, most will require investments in time and sometimes in capital. For instance although you could have an online store selling baby clothes, designer diaper bags, and newborn baby clothes, you would need inventory, or a drop shipper, a web designer and developer to provide the website and search capabilities needed, an SEO specialist to get the business noticed and of course web hosting.
These are just part of the expenses and if the business is to be your full time occupation, you must include this in the business plan. After all, you must live for the amount of time projected to make your business profitable; this is an expense that needs to be considered.
When you sit down and write a detailed realistic business plan you are setting down goals, expectations as well as forecasting expenses. For most businesses this is not just a few hours writing and work, it is a detailed plan of action with realistic and measurable steps. You may want to engage an expert in writing business plans to polish your document if you plan on securing financing with your plan.
A presentation differs from a business plan in several crucial aspects. The presentation, which is, usually what potential investors see first; is a sales tool. It piques interest; it doesn’t go into detail but instead works to show what the business will eventually become. However, before most investors will hand over cash, there must be a financial document showing the viability of the business.
Every detail, expense and contingency plan should be laid out clearly in the plan. This should also include where investment funds will go, how they will be used. Marketing analysis, growth potential and then feasibility are all tested in the business plan. If you can’t make dollars and sense of it on paper, the chances are it won’t make it in reality.
Once your business plan is written, it’s not finished. Businesses change to keep up with the market and with consumer trends. If a business starts out selling baby clothes and the plan works and they are ready to expand, the business plan might expand also to include the market forecasts and expenses involved in securing a line of designer diaper bags or the hottest new line of newborn baby clothes. This can keep the businessperson from making a business error based on opinion, and not solid facts and figures. For instance, while doing the market analysis it might turn out that designer car seats are what are selling and the expansion plans could be changed saving the business money.