As you bring your business online, you need a well-written business plan, the same way you would have one for an offline business. An online business plan will guide you in determining your target audience, your competition, your competitive advantage, your market as well as the cost of marketing and promoting your website. Here are some steps to take in creating your online business plan:
Developing Your Unique Selling Points (USP)
To become successful in the highly saturated and competitive online business world, you need to identify your USP (unique selling points) or your competitive advantage. It is important that you determine what business you are in and the attributes that differentiate you from your online competitors.
To identify your USPs start by assessing the abilities, interests and strengths of your business. If you are an entire company, consider you areas of excellence and competence.
These may include your customer service, your turnaround, or any expertise that your team may possess that sets you apart from the competitors. If you are a single-person online business, take into consideration your professional expertise and experience. These are what you will offer your potential customers.
To identify your own USPs and competencies, you may look to what the competition is offering and their areas of competitive advantage. This will help you craft ways of leveraging your expertise to thrive in a competitive marketplace. Remember that your ideas, products and services can be reproduced easily. Find ways to always stay ahead of your competition.
Setting And Clarifying Goals
Clear goals will give you a direction as to where you want to take your online business. It is very easy to get side tracked when you establish an online presence – there are plenty of opportunities, platforms and solutions that will catch your attention. Nevertheless, let your online business plan reflect your goals so that you will stay on course. Establish financial and non-financial goals that take into consideration your marketing plan. An example of a non-financial goal can be to reach to a certain population (say the Chinese market) in the next 5 years. A financial goal would be something like to increase your business sales revenues from $2 million to $5 million annually. Remember that as your business progresses, the goals set will continue to change as well. This means that your business plan will require revisions as you go along.
Your business plan needs to show the type of customers you are targeting. Do not fall into trap of wanting to sell to everybody! Instead, identify a niche market that will be willing to spend money on the products and service that you offer. Your niche market can be large or small, and this depends on what you are offering. Customers can be individuals, groups or businesses.
Take note that business-to-business customers and transactions are different from business to customer transactions. Thus, you need to be clear whether you will be dealing with business customers, individual customers or both.
As you move online, the attributes of your usual customers will change because people from all over the world will now find your business. Some things to consider when defining your customers include their geographical location, cultural and ethnic dispensation, age, gender, economic conditions and lifestyles. If you are doing business-to-business transactions, consider the size of the companies that you are targeting, the decision-making level of the customers and their buying capacity.
Customer value can be defined as how much a customer is to your business in relation to profits, sales and buying capacity. According to the well-known business guru Jay Abrahams, you can only know how much time and resources to spend on a customer, when you know the combined profits that they will bring to your business. If you are a start-up, determining customer value will largely be experimental or work on approximation to determine the type of customer that you are looking for. However as you get to attract more clients you should begin to identify the most valuable. To calculate customer value:
1. Calculate the average profit for each sale i.e. the total revenues minus marketing, advertising and expenses from fulfilling a service or delivering a product, and then divide the results with the quantity of sales.
2. Next, establish the number of times a customer will buy your offerings over a period of two years or a year. Compute the profits that you are likely to make over the course of that one-year or two.
This should give a rough estimation of what the most profitable customer will look to you.