A web site business plan mistakes

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business plans

You plan to launch a web site to make money, you have to make a business plan? Even at a minimum, the business plan will allow you to fit your project, to estimate the necessary investment and therefore to anticipate these investments. However, there are often mistakes in the business plan for e-commerce site. So, if you want your web site to be profitable, be careful to avoid these mistakes!

Overestimate the site traffic

When creating its web site, it is common to overestimate the number of visitors to the site. Indeed, whatever the theme of your site, there is a good chance that several competitors are already installed. A common mistake is to think that word of mouth or SEO will allow quickly to have the traffic. NO! No one wants to come on your traffic or talking spontaneously. As for SEO, it requires at least an investment in time, for long results and… random. This error in the estimation of the traffic has important consequences in financial modeling, especially regarding the assessment of the CA.

The drafting of the business plan for web site, several criteria to estimate the potential traffic of a web site. So are taken into account the treated theme, SEO efforts, the quality of the content or even the investment in marketing & communication.

It is also common to want to attract the largest audience possible, omitting the fact that often it's better visitors qualified in smaller numbers rather than a wide readership less interested and interesting. A classic mistake is to attract a maximum number of people on his blog. Which brings us to the next point.

Wrong to define the profile of customers.

"Look no customers for your product but are looking for a product for your customers ', we advise Guy Kawasaki, former evangelist from Apple. Thus, it is important to precisely define your customer segment. Too often, the objective is to target everyone, usually eventually touch anyone. By identifying the frustrations and motivations of your customer segment, you can avoid a classic mistake and expensive.

The planning of Adwords keyword tool allows you to draw some trends and determine customer needs. What once this step completed carefully, monetization strategy can be considered. Point of sales before you make sure that you actually meet the needs of visitors.
In having well defined customer segment covered, it is easier to establish the strategy of communication and marketing. However, some errors persist at this level here.

Strategy marketing & hazardous communication

It is not enough to create a business to consider Facebook page have made a real marketing effort. The first visitors do not fall from the sky, and an abundant traffic is always the price of a marketing strategy and well-defined communication. More than a tool of customer recruitment, it is even the guarantor of the strategic coherence of your project.

Thus the planned investments are often inadequate in the business plan of the web because of a bad estimate of starting entrepreneurs. Among the costs, we have the costs of SEO, adwords, online advertising campaigns and offline etc.

The customer search also has a cost, which is often overlooked in the drafting of a business plan: the customer acquisition cost.

Neglect the customer acquisition cost

It is common to read or hear: 'if we sell such quantity of the product, we reach the million of turnover. But the real question to ask here is: how much did I have to invest to acquire each of these clients? If you invest € 60 communications to acquire a customer that will bring us €70, the real benefit is pretty thin, or even negative (because must take into account the margin on sales and no single CA).

Imagine that a company buys and sell shoes. It spends € 1,000 in advertising campaigns and € 500 for the publication of content on the site, whereby it sells 50 pairs of shoes. The customer acquisition cost of:
Budget communication/new customers = (1 000 + 5 000) / 50 = €30.
The customer acquisition cost is then €30. If each pair costs to purchase € 10 and is sold €20 so the company marge nothing.

Overestimate the rate of conversion

For an e-commerce site, the conversion rate is from the visitors who make a purchase at the end of their visit to the site. In a physical store, the conversion rate is much more high and easy to evaluate for an online business. For an e-commerce platform, we meet conversion rates generally ranging between 1% and 4%.

Under forecasts of turnover, it is very important to have an accurate estimate of the conversion rate. Beyond the professional income statement, cash flow plan is also affected. Special attention must be paid to the effect of seasonality, if there is one. It is recommended to launch a very low conversion rate, that will get better every month as the optimizations performed on the site and especially the gain notoriety (hence credibility) that will win your website.

Conclusion

If you pay attention to these errors, you will be able to better define your financing needs, your investments and thus be able to get the most from your site.

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