So you have decided to create your own Online Store. What’s more you want to make it a luxury store. That’s incredible. But before launching, and although you think it is a dispensable step, you must create a business plan. In this article we are going to dive into the key elements that the business plan of an online luxury store should have, which, although it may not seem like it, is very different from a traditional business plan.
Why you should write a business plan
We know that creating your own e-commerce company is exciting and it may be tempting to skip the task of writing a business plan, but do not do it. If you have not poured your ideas, doubts and concerns into a paper, then you have not thought too much about your business model. Writing a business plan for your online store may seem like a lot of work, but it will save you a lot of time and money in the long term as it will prepare you for any challenge or opportunity that may arise. So, what can you get while writing a business plan from scratch?
- Knowledge – You will understand your business better and you will learn useful information about your industry.
- Means – The resources you will need to make your business successful (for example, money, partners, employees).
- Roadmap – You will set clear goals for your business from the beginning.
- Viability – Probably the most important thing. Once you write your business plan you will know the feasibility and opportunities of your idea.
Now that you know you need a custom written business plan for your online luxury store we will see the different sections that you should include.
Business plan structure
1. Your value proposition. Write this section as if you had a minute to explain your business to a potential investor or client. Then practice your pitch again and again until you feel confident enough to explain it to someone else. Once you have it you can also use it on your website as the description of your company.
2. Your business model. How are you going to make money? There are a number of ways to sell a product on the Internet and several different business models that you might consider. Depending on what you intend to sell, it is important to think about which business model makes the most sense for your product.
3. Market analysis. Where can you compete? This section is one of the most important of the entire business plan of your online luxury store. It will force you to understand your industry, to know your competition and to analyze and describe your target client. Before you start writing this section, you need to spend several hours researching the market. Here are some ways to create your own market research.
Google is your best friend. You can look for any recent report about your industry and market. This will give you a good idea of how much growth the industry is experiencing, why this growth is occurring and which are the largest customer segments. A good place to look for terms related to your industry and observe their interest is Google Trends. Besides combining Google Trends with the keyword planner you can know the number of searches that have some terms related to your products and services and the trend of interest over time.
Create an excel spreadsheet with information about all your competitors. This document must have the following columns:
- Name of the competitor.
- Product description.
- Key features.
Fairs or events
Are there fairs nearby that you can go related to your industry? If so, they are a great opportunity to talk with your competitors, meet the manufacturers and understand how things work in the luxury world. Once you finish researching the relevant industry, you should summarize your findings by answering the following questions:
- How big is the industry in general?
- How big is the specific sub-industry you want to enter?
- Where does most of the historical growth of the market come from?
- Why is this the right time to enter this market?
With these steps and information you should be able to take the luxury of your products and portray it in your business plan.