The internet is a pretty amazing thing, isn’t it? It’s an [almost] endless source of entertainment, education, databases, tools, rabbit holes, conspiracy theories, and more. In addition, the birth of the world wide web eventually brought another huge opportunity to almost everyone with access to it – the ability to start an online business.
The way we bought things before the internet exploded into existence was very different (and much less convenient) compared to now. For the things we couldn’t shop for in-store, we called a 1-800 number or a local business and ordered. Fast-forward a few decades, and a study from 2020 found that in the U.S., “traditional retail businesses located in a physical location saw their sales grow by 6.9% between 2019 and 2020. Ecommerce sales grew by 14% in the same time.” From 2020 to 2022, ecommerce sales grew even more.
Unfortunately, finding success isn’t usually as simple as creating an online store and opening it up to the public. In fact, according to a recent study, “About half of all businesses fail within the first five years. Every month in the U.S., nearly 550,000 new companies take flight. Around 80% of them survive about 12 months — 70% last 24 months or more. Roughly 50% of businesses make it half a decade, and approximately a third survive ten years.”
These numbers are not meant to discourage you, but instead to make you think about why so many businesses fail. Failure can stem from all sorts of things, but companies that do succeed tend to have one thing in common — a great business plan.
Creating a business plan, also sometimes referred to as an “executive summary,” forces you to sit down and really think about your business as a whole, the resources you need to be successful, a roadmap of clear goals to propel your business forward, and the viability of your company. Whether you’re just testing the waters for a possible business venture, or you’ve been selling for a while, creating a business plan is a vital step in your journey to success.
Get To Know Your Business (Your Book)
The goal of this portion of your plan is to give a synopsis of your business and formulate a mission statement. Try answering the following questions as you write:
- What am I selling?
- Who is my audience?
- What is my brand’s voice?
- What values do I want to uphold?
- Who are my competitors?
Take time to reflect on the audience you are targeting and the voice you want your brand to have. Establishing your brand’s voice early on will help you create a consistent brand and ultimately build a loyal audience. More than likely, you’ll think of things you haven’t thought of yet, and this might even help you clarify ideas you’ve already had. If you are having trouble with how to get started, try visiting the About Us or About the Author section of some of your favorite websites for inspiration.
Observing the competition is another way to get to know your business. Instead of feeling intimidated or losing confidence in your business, use it to your favor instead. Keep an objective eye on your competition, observe what they are doing well, and make note of their strengths and weaknesses. A simple yet effective way to do this is by following their social media channels or signing up to receive their marketing emails.
Identify Business Resources
When you visit an ecommerce website or walk into a store, there are several things you expect to see: items to purchase, a way to pay for them, and usually someone to help you while you are browsing or checking out. If you are in a store or on a website you particularly enjoy, you probably don’t even notice what keeps everything running smoothly; instead, it’s just an enjoyable shopping experience.
If you have ever worked in retail, you know how hectic it can be—especially during peak shopping times like Black Friday, Cyber Monday, or Mother’s Day.
What customers don’t usually see are the backrooms or the behind-the-scenes. This is where you can find half-filled (figurative or literal) boxes of inventory waiting to restock shelves, employee schedules and customer support training, graphic designers creating banners and signs for promotions, and more. Needless to say, there are a lot of working parts that go into making a business successful, regardless of the scale.
This next portion of your business plan can be divided into three different sections:
1. Physical Resources
This is partially figuring out what you are selling and where your products are coming from, but it also includes other items necessary for a business to run smoothly. Breaking it down into the following categories can help you figure out exactly what you need:
Products and Inventory – Are you making items yourself, or are you outsourcing them from another company? Are you storing inventory at your home or office, or do you plan to use dropshipping?
Equipment – This includes items other than what you are selling, such as a computer, a camera, packaging materials, a printer, printer paper, ink, and anything else you expect you’ll need for your day-to-day.
2. Financial Resources
You could have the most brilliant business idea in the world, but when it all comes down to it, the financial health of a business is almost always what dictates whether it survives or closes up shop. In this portion of your business plan, you will need to compile your expected business expenses and decide how you plan to fund them. Almost all legitimate businesses will need some kind of monetary investment, and whether this comes in the form of a loan from a bank, a fundraiser or Kickstarter campaign, or an investor, you will need to find a way to fund your business as you get it off the ground.
Because financial resources are one of the most crucial parts of starting a business, I strongly encourage you to speak with a financial advisor. At the very least, downloading a helpful spreadsheet to track your business finances can help you keep your funds organized.
3. Operational Resources
This is where you will need to decide whether you want to do this alone, or if you need to hire some help. Running a business by yourself will mean that you are your own accountant, customer service representative, inventory manager, website administrator, product tester, and any other role you fill in your day-to-day. If you decide to go this route, mapping out the organizational structure in your business plan can help you decide if and when to hire additional team members. Everything in your business plan can change at any time—it’s yours, after all—so don’t stress out too much if you aren’t sure how much help you will need in the beginning.
Find Vendors That Align with Your Values
More and more people are spending their dollars with companies that uphold the same values as them. In fact, 70% of worldwide consumers prefer to buy from companies that share in their values. While this adds to the list of things to consider as you put together your business plan, that statistic is difficult to ignore.
Sourcing products from partners whose values align with yours will help create a stronger business, because it will allow your customers to see worth in your company beyond just the products you’re selling. By partnering with vendors that share your values, you’re staying authentic and true to your brand, which will help you build a loyal customer base.
For Lulu, our mission is to make the world a better place, one book at a time. Working with partners that share those values motivated us to become B Corp certified, which means we are part of a group of businesses that do amazing and impactful work for communities and the planet. What does this mean for Lulu users? All of our products are printed on acid-free, FSC-accredited paper, which means the paper is made from trees grown in forests that are run in a sustainable way. Regardless of the product you are selling, consider the bigger picture (and ultimately, what your customers want) when figuring out where your resources are coming from.
Set Business Goals And Develop A Marketing Plan
Your next steps in developing long-term, sustainable results in your business are to set goals and develop a marketing plan. This will help you accelerate your business’s growth and prepare for challenges ahead.
1. Set Goals
Where do you see your business in one year, five years, or even ten years? Ten years can feel like a long time from now, but it’s important to set both short-term and long-term goals for yourself to avoid business failure within the first decade.
Short-term goals can be independent of your long-term goals, but they can also be intermittent steps as you work towards a long-term goal. For example, a few short-term goals you set for yourself may be to research and refine your niche market, create a product page, and run a sale or promotion. This could all lead to a long-term goal of launching your new book.
While setting goals, it is important to not only think about your marketing and sales goals, but your financial, operations, and overall business goals as well. Be sure to consider current profits versus projected profits, and adjust your goals accordingly.
2. Put together a marketing plan.
I could write an entire blog post on this topic alone, but I will keep it brief. The goal of creating a marketing plan is to provide a roadmap of your marketing strategies for your business. You should include the channels you plan to utilize to reach your target audience, your budget, promotions you intend to run, market research, and more. Set yourself up for success by strategizing ways to drive traffic to your website and convert visitors into customers. Some effective ways to market to your customers could include email marketing, social media promotion, or search engine optimization (SEO).
Get To Work!
Reviewing your business as a whole, identifying key resources, setting short- and long-term goals, and creating a marketing plan are vital steps in your journey towards operating a successful business. Developing a business plan is difficult, but success awaits those willing to put in the effort. Now that you know how to create one, the rest is in your hands, so get to work!
Do you have questions about creating a business plan, or have you already written one that works for your company? Let us know in the comments!
Kristen is an Ecommerce Specialist at Lulu. Her role focuses on helping clients utilize Lulu's direct-to-consumer tools to grow their businesses. She is passionate about giving everyone the opportunity to have their voices heard and believes self-publishing presents the perfect opportunity to do just that. When she's not at the office, Kristen is likely chasing her toddler or working on a DIY project in her garage.