The creation of an e-commerce clothing store inspires many entrepreneurs. Indeed, suppose you build an e-commerce platform whose navigation is simple and optimized for conversion, rank it well in search engines, and offer clothes that appeal to the targeted audience. In that case, your ready-to-wear online store can generate an interesting turnover.
However, before opening an e-commerce clothing store, know that you need to build a solid business plan.
Indeed, in addition to its usefulness when applying for financing, the business plan is the document that contains the entire development strategy of your online clothing store.
What is the content of a good business plan for an e-commerce clothing store?
How to estimate the income of your clothing e-shop?
How to establish the provisional budget to be allocated to it?
Where is the break-even point for an e-commerce clothing store?
What financial tables are found in the business plan for selling clothes online?
Our team answers you today.
To optimize your chances of success, you can also rely on our business plan designed for an online clothing store.
Finally, note that our team of experts constantly monitors the online clothing sales market. It collects data, analyzes it, and formats it. All the fruit of his labor can be found in the documents of the complete package for an online clothing store.
THE COMPOSITION OF THE BUSINESS PLAN FOR THE SALE OF CLOTHING ON THE INTERNET
SHOULD YOU DEVELOP A BUSINESS PLAN WHEN PREPARING TO CREATE AN E-COMMERCE CLOTHING STORE?
Yes, writing a business plan before opening your fashion e-commerce store will give you the opportunity to:
- identify the market figures for the sale of clothing on the internet
- understand the behavior of customers in this market
- list the criteria that allow an e-commerce clothing store to succeed
- segment your target customers to meet their needs better
- inform you about the strengths and weaknesses of competing clothing stores
- arm your online clothing store with competitive advantages
- design a 3-year plan to generate maximum profits
- define the right marketing strategy to sell clothes successfully online
- think about the potential risks
- prove to an investor that your online clothing store represents a promising project
WHAT ARE THE ELEMENTS OF THE BUSINESS PLAN TO SELL CLOTHES ON THE INTERNET?
A business plan contains many figures, data, studies, and analyses. Therefore, it is imperative to structure and categorize these elements properly.
The first part is the one that refers to the "Market Opportunity." It allows you to present the online clothing market, the new trends in the sector, and the success factors for an e-commerce clothing store.
The next part is the "Presentation of the Company," which will allow us to obtain a description of the field of action of an e-commerce clothing store. This part also presents the value proposition of your online store. Finally, it introduces the person responsible for managing this store (probably yourself!).
Then comes the "Market Research" part, which will identify the market segments of your online clothing store and the competing clothing shops. This part also contains a SWOT analysis, a tool used to synthesize the strengths and weaknesses of your online clothing store while identifying the opportunities and threats that concern it.
The "Strategy" part will allow us to present an action plan containing the steps to follow to become profitable. In particular, it offers a marketing strategy to convert the first users who browse your online clothing store.
Finally, this business plan introduces a "Finances" section, which reveals the financial strategy of your e-commerce clothing store.
HOW TO SET UP THE EXECUTIVE SUMMARY OF AN E-COMMERCE CLOTHING STORE?
To build a good Executive Summary, you must take up the business plan's essential points to sell clothes online.
Note that the Executive Summary of an e-commerce clothing store is a document that should be kept short.
"Executive Summary" and "business plan" are terms that sometimes create confusion. However, they are not synonyms.
These two documents are part of the complete package for an e-commerce clothing store. The Executive Summary is the document that will resume, in a synthetic way, certain points mentioned in the business plan. It is, therefore, a kind of introduction to the business plan of your online clothing store.
HOW TO BUILD THE MARKET STUDY OF A CLOTHING E-SHOP?
First, be careful not to confuse market research with a business plan and vice versa.
The business plan includes some elements of the market study, but it is a different document.
Use our market research template designed for an e-commerce clothing store to succeed in your market research.
This document, the business plan, the financial forecast, and the executive summary can also be found in the complete pack for an e-commerce clothing store.
In the "Market Research" part of our business plan for an e-commerce clothing store, we find in particular:
- recent data on the market for the sale of clothing via the internet
- the latest trends in the online clothing sector
- the market segments of an e-commerce clothing store
- the corresponding SWOT matrix
- the analysis of competing clothing stores
- examples of competitive advantages
These elements are essential for developing the strategy of your clothing e-shop.
THE BASICS OF A BUSINESS PLAN FOR SELLING CLOTHES ON THE INTERNET
HOW TO DEFINE THE BUSINESS MODEL OF AN E-COMMERCE CLOTHING STORE?
The economic model of an e-commerce clothing store corresponds to selling clothing items via the internet, to be procured via a delivery model.
We also note that the necessary information leading to the purchase action is available on the website.
On this platform, we must find images that are faithful to the actual appearance of each item, often worn by models, for a better impact on customer decisions. Also, we can access information regarding the availability of items in stock, sizes, colors, etc.
The Business Model Canvas is the tool used to present the business model of your online clothing store.
WHO IS THE TARGET AUDIENCE FOR YOUR ONLINE CLOTHING STORE?
You must precisely identify the profile of your future customers. Examples are: "young mothers looking for baby clothes," "men who wish to maintain their wardrobe in clothes for work," or "sports lovers wishing to practice in ever more comfortable outfits."
HOW TO CARRY OUT THE STUDY OF THE COMPETITION FOR AN ONLINE CLOTHING STORE?
Competitors will always exist whatever strategy you choose to sell clothes online. You will therefore have to identify them according to your prices, your positioning, and the type of clothing you offer.
In addition, you will have to present their strengths, then compare your e-commerce offer to theirs.
It doesn't stop there: your e-commerce clothing store must stand out from its competitors.
This is where the competitive advantages come in.
A competitive advantage is anything that can help your online clothing store gain market share.
How to spot competitive advantages for your clothing e-shop? To do this, identify the weaknesses of competing stores by conducting competitive benchmarking, which involves monitoring their platforms.
What gaps can you spot? It can be a complicated online store to navigate, with a limited choice of clothes, high shipping costs, poor after-sales service, etc.
These weaknesses mean that part of the market remains unsatisfied. So it's up to you to offer something better: an unbeatable user experience, no shipping costs, never out of stock, regular promotions, unique pieces, etc. These are ideas of competitive advantages for your online clothing store.
Finally, identify the opportunities and threats present in the competitive environment in the SWOT matrix of your online clothing store. This tool also allows you to summarize the strengths and weaknesses of your e-shop.
WHAT MARKETING PLAN TO DEVELOP FOR AN E-COMMERCE CLOTHING STORE?
Show that you have a long-term vision: draw up a development plan over several years.
What should you do to prevent your online clothing store income from stagnating?
How are you going to keep ahead of your competitors?
How will you attract more customers and convert them to your e-commerce platform?
Here is what you can put in place to increase your clothing sales on the internet:
- study your conversion funnel using Google Analytics and improve the design of the different pages according to the results of your analyzes
- open pop-up stores during holiday periods, with the objective, in addition to sales, of improving traffic to your online clothing store
- collaborate with influencers who represent the values of your store and your clothes
- expand your offer to other markets, such as shoes, bracelets, bags, etc.
- use the strength of Facebook Ads to make your shop with new customers
- study customer feedback on your offer to expand it or make the necessary corrections (on, for example, items that have proven to have a hidden defect)
- launch a range of eco-certified clothing responsible, especially with brands that claim it in the patterns displayed on their clothes
THE FINANCIAL BUSINESS PLAN OF AN E-COMMERCE CLOTHING STORE
HOW TO CALCULATE THE FORECAST TURNOVER OF YOUR CLOTHING E-SHOP?
For your type of activity, the average basket will depend above all on the clothing ranges you offer.
Note, however, that in selling clothes on the internet, the average basket of expenses rarely exceeds one hundred euros (except for luxury).
You will also need to estimate your traffic, your conversion rate, and the number of sales you will register on your platform.
Favor a classic approach during the first months: acquiring traffic on your online store takes some time.
However, as you work on your SEO, invest in online advertising, and optimize your conversion funnel, the number of customers should increase: highlight this hypothesis in your business plan.
Get consistent and personalized revenue forecasts without going through calculations, thanks to the financial estimates we built for an e-commerce clothing store.
In this financial model, your online clothing store's turnover and other financial ratios are calculated automatically after entering assumptions. In addition, the model tells you, from the outset, the corrections to be made to obtain relevant forecasts.
HOW TO SUCCEED IN THE PROFITABILITY STUDY OF AN E-COMMERCE CLOTHING STORE?
THE STUDY OF THE BREAK-EVEN POINT OF YOUR ONLINE CLOTHING STORE
The break-even point indicates the level of turnover (excluding taxes) that your e-commerce clothing store must achieve to be profitable.
What is the break-even point of your online clothing store? What day of the year does your online clothing store break even? Our financial model for an e-commerce clothing store will help you answer these questions.
To develop a profitable e-commerce clothing store, there are two elements to consider: the turnover generated by your online clothing store and the expenses it will require.
HOW TO INCREASE THE TURNOVER OF A CLOTHING E-SHOP?
It would help if you had a solid marketing strategy to attract customers and successfully sell your merchandise.
The marketing strategy brings together all the initiatives that will help your online clothing store convert its traffic. We discussed some of these points in the previous section.
HOW DO YOU REDUCE THE EXPENSES OF AN ONLINE CLOTHING STORE?
You also have to control expenses for your clothing e-shop to be profitable.
For example, choosing not to surround yourself with professionals for the legal aspect of starting an e-commerce clothing store is not a good idea.
For optimal management, look instead at the current expenses of your online clothing store.
Be careful not to exceed 4-5% of your turnover in transaction costs: choose the best platform solution to host your online store. For example, companies like Shopify or Stripe charge between 1 and 2% on each transaction.
You must identify the cost of production per unit (if you produce your brand) or the cost of purchasing your garments.
Note that taxes can sometimes seriously hamper the profitability of an e-commerce clothing store.
WHAT ELEMENTS SHOULD BE INCLUDED IN THE FINANCIAL PART OF THE BUSINESS PLAN TO SELL CLOTHES ONLINE?
If you wish to present a serious financial analysis to a potential financial partner, here is what should be found in the business plan of your online clothing store:
- income forecasts - a forecast income
statement - a forecast
balance sheet
- a cash flow plan
- performance indicators (intermediate management balances)
- details of the working capital requirement
- the financing plan
- the list of initial investments
- graphs and financial ratios
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