Once you have finished your market research and worked out the effect a Web site will have on your business, you then need to plan its future. This means having a strategy for how you will create your Web site and what you will do with it once it is online.
You can use a basic business plan as your foundation to create your plan or your “e-strategy”. It is not strictly necessary to create a business plan to put your business online, unless you are going to need additional funding to finance this expansion.
However, if you want the transition to be smooth, it is a wise move. You can also incorporate your finance information into this plan so you don’t have to create two separate business plans.
Business plans include:
An executive summary
Current business information
Market analysis
A SWOT analysis
An action plan
Financial details and budgets.
Executive Summary
In a business plan, the executive summary is a brief, informative overview of the whole plan, outlining your business operations, its capabilities, the goals and objectives and how to help achieve them.
This draws together all the major points of the plan and is considered the most important part. It should be written as if this might be the only section that is read.
For your e-strategy, write down what you want to achieve. It will help you to outline your future direction. This will provide a focus for your whole planning program and will ultimately help to shape your site.
The executive summary must also draw attention to your business’ important features. It should briefly outline the business structure, as well as emphasise any special characteristics. It should include current financial information and outline the financial requirements for going online, describing what supporting collateral is available.
The first part of the summary should contain the mission statement and should answer these questions:
What your business is about
What products or services you provide
Your goals and objectives for achieving success.
To be credible, this statement must give achievable and quantifiable goals and objectives. If your Web site is to be another facet of your business, providing the same products and services through another medium, your mission statement might essentially remain the same as the one created for your last business plan.
You may just need to add a couple of words to the effect that you also provide your products and services online. Should your Web site, however, herald a definite change or departure from your current business operations, you will have to reflect this.
Current business information
This section outlines the structure and organisation of your business. This is the section, therefore, where you include details of who is responsible for the different aspects of your online venture, whether you plan to take on dedicated IT personnel or a Web manager and whether you plan to use contractors or consultants.
You will also have to show here how your online venture will integrate with the rest of your business. If you have a reasonably sized business, include an organisational chart. This will indicate who is in charge of which sections of your business and show the chain of command and relationships between the sections.
Market analysis
Market analysis essentially involves taking a careful look at your products and/or services, your competition, your customers, and identifying factors that will affect all of these. In other words:
Finding out how the products and/or services you want to offer are being handled by others
Analysing the current online market in your particular field
Identifying your target customers
Determining how going online will affect your existing business.
In addition to this, analysis of your competitors is a key factor in your e-strategy. This includes not only your offline competitors but also your online competitors, even if they may be half a world away. You will also have to show your current and anticipated market share, explain whether you service a niche market and emphasise any unique selling points.
A SWOT analysis will help you outline exactly where your business is in relation to your competitors and what you can do to improve your business’ standing.
Your SWOT analysis
This outlines the strengths and weaknesses you see within your own business and an assessment of external opportunities and threats.
Your strengths can include any factor that can help you deal with your current and your online market better than your competitors. These could include:
Your skilled workforce
A strong reputation in the market
Quality of service
A specific product that serves a niche market
The fact that you can include an online section to your business with little or no disruption to your existing operations.
A clear understanding of your weaknesses will help you identify realistic measures to overcome them. These weaknesses could include:
Outdated technology
Poor technological know-how
No specific ‘niche’ product
Inefficient communication systems.
Opportunities are those factors you have identified which can be turned to your advantage. These include:
Identification of un-met needs
Development of new products or services
Changing customer needs
New technologies
Weak competition.
Likewise, the threats you should acknowledge, and provide strategies to counteract, could include:
Actions taken by competitors, such as discounts, special offers, promotions, strategic alliances and product enhancement
Security risks from hackers, fraud
Ongoing taxation and legal changes
Government regulations.
Planning to take advantage of factors that can be turned to your benefit or to accommodate factors that could prove troublesome is an essential management practice. It is often the unexpected factor that proves to be the downfall of what could have been a very successful enterprise.
Action planning
Your action plan ties everything together. This is the template for when you aim to have each aspect of your e-strategy completed, as well as what you hope to have achieved at the end of each period. Included in this will be your:
Deadline for going online
Immediate, mid-term, and long-term goals
Ongoing evaluation and assessment dates
Strategies to handle major risks and problems.
Your deadline for going online will include anticipated periods for designing the site, the actual building time and testing the Web site. Finally, it will state the date you want to have your actual site working on the Internet.
Your different goals will include defining what you want to achieve in each time period, whether it is something which needs to be completed immediately or can be left to the long term. This will outline when you will be ready to move to another phase of your Web site.
For example, your Web site may initially be another communications tool for your business, which provides information about your “bricks and mortar” business and details for your customers to contact you by e-mail, fax or phone. Any orders or enquiries would be followed up by one of your sales staff. This would be your immediate or primary goal for your Web site.
However, if sales from your Web site start to increase, you could decide to develop your site further to incorporate an e-commerce store which will handle secure online credit card payments. This would then become the second phase of your Web site and would be part of your medium to long-term goals.
Other incremental developments could be adding extra products and services to your online offerings or perhaps setting up a dedicated delivery system.
You will also need to plan dates for ongoing assessment. Like all aspects of your business, it is important to keep in touch with what is happening online as well as offline.
The Internet is a very dynamic medium, with changes taking place very quickly. This is why it is important to have the future directions of your business worked out in advance, at least tentatively. You really don’t want to be left behind if things are going well, and more importantly, you don’t want to lose money if you have made a wrong choice.
It is important to have contingency plans in place, so you are prepared if it is necessary to change or increase the products you offer, your delivery procedures, and so on. Or even, if the worst comes to the worst, plans for how to close down this aspect of your business.
Current and projected financial reports
Your up-to-date financial statements reveal the exact current financial position of your business. This financial report should include a profit and loss statement and a balance sheet.
These will be looked at to determine if your current business can support your proposed changes and if it will, in fact, benefit from these changes. You need to include comprehensive budgets, or projections, to indicate your anticipated operating results.
These should consist of your cash flow and profit and loss forecasts. A cash flow forecast will identify when major expenses will occur, as well as anticipate any temporary cash shortages. Your profit and loss forecast will outline the expected business performance for the next year. It should include the revenue, or amount your business is expected to earn during the period, your anticipated costs and other general expenses.
This is the critical part of your budget since it provides the focus of your anticipated net profit and the cash flow that results.
Working out your budget
Working out your budget is a very important aspect of planning to go online, and may well influence your whole online strategy. As with any new aspect you introduce into your business, you need to thoroughly research and consider the different costs involved.
There are various ways of costing your Web site. Initially, you should create three budgets – minimum, optimum and ideal. How you structure your costings will depend on your particular circumstances.
You may, for example, plan on using an off-the-shelf product to build your Web site and pay someone to fine-tune it to your needs. In this case, you will need to budget for the software and the time spent by the Web site developer. In addition, you will need to budget for other related costs such as any new technology required, registering your Web site and ongoing maintenance fees such as Web site hosting costs.
On the other hand, you may decide to employ a Web developer to design and maintain your site, in which case you will again have to pay for technology as well as budget for an additional full-time staff member.
Other budget variations should take into account the proposed complexity of your Web information and customer facilities. For example:
An initial budget for using your site as an additional advertising arm
A budget for further development such as online purchasing and a shopping cart.
A budget for further expansion such as additional staff to handle deliveries and extra storage facilities.
You should make sure you budget for all possible outcomes. This includes your worst case scenario, your anticipated scenario and your “optimum” scenario.
If you understand the implications of any developments, you will be able to take the appropriate action. This obviously applies to when your business is doing better than expected, as well as when it is not performing.
Your budgets will also have to reflect any other changes that take place in your business as a result of going online. This includes taking on additional staff to deal with enquiries resulting from your Web site. You will also need to take into account any other additional costs such as advertising, stationery, delivery, stock and promotional materials.
Obviously, different Web sites could result in vastly differing costs, and what you can afford to spend will depend entirely on your business and what you want to achieve by going online. This is, after all, one of the major reasons it is necessary to create an e-strategy.
