1. Online Business Planning -Solid Business Plan
Whether you are creating a new business or you are expanding your existing business online, it’s a good idea to create a business plan as part of your development and preparation process. Just like a traditional business, your online business plan needs to provide details about your venture along with a list of goals and supplies you’ll need to get started.
Generally, a business plan is created to solicit capital for your project from potential investors. However, it does more than that. It forces you to thoroughly analyze how effective your business idea really is and makes you accountable to carry out the plan for developing it.
According to the SBA creating a business plan is one of the most important steps you will take because the plan serves as your road map for the early years of your business. A solid plan generally projects 3-5 years ahead and outlines the route the business intends to take to reach its yearly milestones, including revenue projections.
As you are creating your online business plan there are a number of sections you need to put together to ensure you have a plan you can follow to keep your business on track towards success.
You may be surprised to learn that many business owners come up short during the planning stages, which often ends up in a non-starters or complete failure. Perhaps this because they are uncertain of what they want to achieve.
In addition to taking, the time to outline what your business will look like and how it will function, you also need to think about financing. Working capital is critical to your startup. Keep in mind that how much working capital you need will depend on your specific project.
Your business plan will help determine how much capital you already have, how much more you may need and what your operating costs will be. For instance if you are taking your existing business online you may only need a small amount to set up a website and cover related costs like domain hosting and processing fees. But, if you are starting a brand new business you may need special licenses and additional inventory on top of the basic costs associated with running an online business.
– Other Online Business Factors
Setting up and ecommerce website has its own set of challenges that aren’t usually seen in more traditional business models. You have to be at least a little tech savvy or be prepared to hire someone who is to get your website set up and ready for customers.
There are also additional resources needed to conduct business online. For example, payment systems, customer management, email and demographic tracking software.
Like any other business, you shouldn’t invest time and money unless you have done the proper research and understand the risks and rewards. You need to know or at least have a pretty good idea of what’s needed to develop the business to ensure a good return on your investment.
Here are some other important aspects of an online business to consider:
– The unique working environment of the internet.
– The advantages of doing business online.
– The disadvantages of doing business online.
– The cost of running your business online
– The potential profit and loss margins
– Understanding your audience online purchasing habits.
The SBA (Small Business Administration) has a wealth of free information about starting a business. You can check out all of the available resources here: https://www.sba.gov
2. Online Business Planning – Creating Strategic Outlook
When you have a business plan in place you are taking steps to make sure that your business is on a good path, and it can also be used to seek financial investors or other types of funding. It will also serve to keep your business on track to success.
As we also know, an online business is operated a little differently than a traditional business. The biggest difference is that the financial, management and marketing details should reflect a growing online market. Let’s quickly go over a few key points you must consider when you are writing a plan for an Internet based business.
– Write a business summary
If your business operates only online, you should take the time to describe all of your website’s aspects. Answer questions like who is going to run the business, maintain the site. How will customer support be handled? What will you offer, who is your target audience, etc.
– Create an outline of your marketing strategies
Include the different types of adverting you plan to use. Are you going to use online ads on networks like Google, Bing and FaceBook? Are you going to use social media? Do you plan to use methods that are more traditional; like print ads, press releases, radio or TV spots? You should also include thing like your pricing plan, payment options and checkout process as well customer management systems.
– Outline team roles
If you are planning to hire employees explain the roles of your team members. Their duties, how much they will be paid, benefits, etc. Make sure you provide enough detail for investors to understand why each planned position is necessary to the success of your business to help justify the wage expenditures.
– Create a good financial plan
This should include your startup capital, operating costs, and your profit forecast in various intervals such as 6 months, 12 months, 2 years, etc. This will help investors and lenders get a good idea of what their return on investment (ROI) will be. It will also help you gage the success of your business over time.
– Create a business schedule
Your schedule needs to include the present, near future and your long-term plan. This would include things like when your website will be complete. When you are going to take your business live online, which it typically referred to as a launch date. When hiring will take place, when employee or contactors will be paid. It should also include a plan for rolling out products, creating content or any other tasks that need to be completer on a regular basis to make the business run smoothly.
– Write an executive summary
Lastly you should write an in-depth executive summary that includes research as well as an easy to understand explanation of your business plan. Your summary should be broken down into sections and each should have its own title. This will help the information flow better for anyone who reads it and make it easier for you to follow as you move forward.
3. Online Business Planning – Planning Tools
You’ve done your research, you’ve crunched some numbers and you’re ready to start writing your plan. Did you know that there are tools that can help make the process a breeze?
Writing a business plan can be challenging to say the least. Especially if it is your first attempt. However, thanks to online and software options it doesn’t have to be. You can quickly and easily create a sophisticated business plan that’s ready to follow or use to present your idea to investors or a bank.
A good tool can do most of the hard work for you. Most of them have an easy systematic process, which allows you to simply fill in the blanks and it will do the rest. They are a very effective way to put a business plan together. Of course, you still need to have all the information available about your business.
– Choosing the right tool
When shopping for the right tool to suit your needs you should look for one that allows you to add custom charts and graphs that will make information available at a glance. They will not only help you plan easier to read they are a great way to grab the interest of lenders and potential investors.
You also want to choose a tool that can generate financial forecasts based on the information that you provide. Most applications will generate a Balance Sheet, Cash Flow and Income Statement, also called a Profit and Loss statement.
It is important to pay close attention to the reliability of the tool. While price matters especially when you are on a budget you don’t want to base your choice on price alone or you may end up wasting your time on a tool that can’t get the job done.
Take time to research you options and do some comparison-shopping. Look for reviews and find out what other people are saying. Does it come with support and training? Will there be someone available to answer your questions if you are stuck? What is the refund policy? These are all important factors to consider before you invest your time and money.
Here is a quick list of a few business plan tools you can help get you started:
Business Plan Pro – Is great if it’s your first time creating a business plan.
http://www.businessplanpro.com
Plan Magic – This software enables you to create a business plan, financial plan, marketing plan and media plan that is easy to follow and implement. http://planmagic.com
LivePlan – This top rated software takes you through the process to create investor-ready business plans that you can take to the bank
http://www.liveplan.com
Plan Write for Business – This software comes with 100’s of detailed examples and guided support that will help you create an effective business plan.
http://www.brs-inc.com/pwb.asp
Bottom line the right planning tool can make is almost easy for anyone to create a solid plan for their online business so why not make the process as easy as possible.
4. Online Business Planning – Revenue Source Calculation
You are working on getting your online business off the ground and as we have been discussing putting together your business plan is part of that is. While every business plan shares some commonalities, an online business is unique and therefore it may look a bit different from one for a traditional business.
We also know that it is important to include a section in your plan that lists your planned revenue sources. This presents a unique opportunity that offline business don’t have which is to generate revenue through multiple sources.
Let’s look at a few:
– Contextual Ads
Showing contextual based ads on your website is a common source of additional income that many online businesses can quickly add to their revenue stream. When your visitor clicks on an ad, you receive a predetermined amount of revenue. The most popular form of this is displaying Google AdSense ads. If you’re planning to include this type of advertising on your own website be sure to include it as a source on your plan.
It is a good idea to include some actual calculations to base your projections on and make sure to thoroughly explain how it generates income because many people (lenders) don’t have a full understanding of this type of income works.
For example, a website that has 4,000 page views per day and the effective CPM (cost per thousand) is $28.75 it has the potential to generate an annual revenue of $42,000. It’s important to focus on the average CPM for your industry. Don’t worry if you don’t understand this at first there is a lot of free information and even free calculators that can help you gather the data online all you have to is search for CPM.
– Amazon
In addition to your products and services, you might decide to sell products from the Amazon site as an affiliate, which means you will sell relevant products from the Amazon site on your website and be paid a commission for doing so. It’s a good way to supplement your income, but if you are going to use this method, you will also need to define and explain this revenue in your business plan.
– Affiliate Programs
Another good option similar to promoting Amazon products is promoting affiliate programs. Many online business owners offer generous commissions of up to 50% or more. Keep in mind that commissions do vary. You will need to decide what types of (non-competing) affiliate offers you plan to promote, then do a forecast of how many units you believe you can sell and include that number in your projected revenue.
You can also offer your own affiliate program, which will allow others to promote your products and services in exchange for a commission. It is a great way to reach more customer without additional expenditures. However, it is better to include this under the advertising section of your plan.
Bottom line, your business plan needs to include all revenue sources that you are considering so that investors can have a ‘real’ picture of what your projected income looks like. The more data you can provide the better.
5. Online Business Planning – Traffic Generation Methods (Free & Paid)
Another important aspect of your online business plan is understanding the different methods of traffic generation available and deciding which ones to include in your plan. Taking the time to map out how you plan to drive traffic to your website can mean the difference between success and failure. It is vital because without it there are no visitors or customers, which equals no revenue.
Let’s go over a few quick ways to generate traffic:
– Search Engine Optimization (SEO)
SEO means cultivating your website so that your webpages appear higher up the list of search engine results. There are many ways this can be achieved. Such as including keywords, meta tag, descriptions writing content and even layout. When used properly this SEO techniques can raise the ranking of your website and generate massive amounts of free traffic. Just be aware that it can be a very time consuming process with a big learning curve.
– Banner Advertising
Banner ads are image-based. The purpose of banner advertising is to promote your website and attract more visitors. This is method has been around for a while and some may tell you that it is no longer affective however when used correctly it can be a great way to advertise with a small investment. It requires a bit of effort and you must understand how to create visually appealing ads then track their effectiveness.
Most banner ad networks make this process easier by providing tracking software and split testing options that will allow you to determine which banners are effective and which aren’t. There are many banner ad networks to choose from including Google Adwords, which allows you to run multiple types of ads including banners.
– Pay Per Click Advertising (PPC)
PPC has the potential to generate a lot of targeted traffic very quickly. It allows you the advertiser to create ads that are displayed on other websites. When the ads is clicked, you pay a predetermined fee to the website owner. It’s like the reverse of the AdSense method we discussed in your last lesson. Just be aware that it has a big learning curve and can become very costly especially if you don’t know what you’re doing.
– Social media marketing
Social media sites can be categorized in two ways. There are social networking sites like Facebook Twitter, YouTube, and LinkedIn. Then there are social bookmarking sites, like Digg, StumbleUpon, Reddit, and Delicious. The most important aspect of using social media marketing as a traffic generation method is participation. You have to participate by posing regular content such as updates, photos, and videos. You also need to engage with followers through comments and social sharing.
– Email Marketing
In online business, it is very important to set up an opt-in page on your website and capture people’s email addresses. This type of permission-based marketing allows you to send them useful information along with enticement such as discounts, sales and special offers that will encourage them to visit again.
Before you begin using this method, make sure that you understand how it works and always make sure you’re familiar with the CAN-SPAM laws, because if you aren’t compliant with the regulations you can find yourself and your business in a lot of hot water.
– Packaging
As a retailer, you generally have many opportunities in your packaging to advertise your website address. Your product packaging, flyers, business cards, bags, etc. are all good places to share your web address. Previous customers might not know you have a website.
– Business Cards
Put a business card in every order, whether it’s a customer in the store or orders you ship, always throw in a business card that has your website address in it. Business cards are cheap to have printed and they provide a huge opportunity to promote your website.
– Presentations
If you do a presentation for your local Chamber of Commerce or at a trade show and plan to provide attendees with printed handouts, make sure that every single page has your website URL on it. You can also provide a list of your services and even a special offer for anyone who orders via your website.
– Print Material
Press releases, newspapers, magazines, direct mail brochures, flyers, and printable coupons are all forms of targeted print material that can work for you to promote your website online. Again, you can include a special offer or discount code that they can only access from your website.
All of these methods are very effective and can help generate traffic to your website. If you plan to use them or any other method, you will definitely want to include them in your online business plan.
Related Info Products:
Digital Success Network – Online Business Training Programs
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“Make Money Online” Resources/Tools – Product Review Site