Fundamentals of e-Business Planning

Most lessons in this e-Business Plan Tutorial are about how to write an e-business plan. This lesson is different -- in this lesson you will learn what is a business plan and why do business planning. Other topics include a definition of a business case and how does an e-business plan differ from a traditional, "non e-business" plan. Also, you may recognize that portions of this lesson are an extended version of section 14.2 in Electronic Commerce 2006.

The lesson outline is:
Introduction to e-Business Planning
  • What is a business plan?
  • Why write a business plan?
  • When do a business plan?
  • The "e-difference" in e-Business Planning

    Introduction to e-Business Planning

    What is a business plan? One way to think of a business plan is as a road map for the development and operation of your e-business. You wouldn't think about setting off on a trip without a destination, a plan how to get there, and a road map to be sure you don't get lost. A business plan does these things for your company, and more. Other strategists call the plan a blueprint of your company, an outline of your business idea, or a document that describes how your business will be profitable.

    Formally, we define a business plan as a written document that identifies a company's goals and outlines how the company intends to achieve those goals. A business plan is almost always written for the creation of a new company in the marketplace and it is written for external audiences such as investors, potential business partners, or prospective managers. A special type of business plan is a business case, as defined in Business Case Box 1.

    Business Case Box 1
    A business case is a business plan that explains a new initiative or project inside an existing company. Its purpose is to justify a specific investment of funds and the audience is the company's board of directors and senior management.

    As a special case of a business plan it has similar content as a business plan, but a business case contains more operational detail and it fits the project within the organizational context (e.g., justifies the initiative on the basis of the firm's mission and goals).

    Throughout this tutorial these business case boxes explain the differences between writing a business plan and a business case.

    Why write a business plan? A skeptic might answer this question "because I have to," meaning that a bank or venture capitalist wants to see a business plan before providing funds to the business. However, there are many other reasons why a business plan is a business requirement:

    When do a business plan? First, the classic case of the need to write a business plan is when a new business proposition needs to be shared with others.

    Second, a business plan may need to be done in conjunction with a strategic planning process. If, as part of its electronic commerce strategy, a company is planning to create a separate company, reengineer or restructure the existing company, or launch the company into a new direction, then a business plan, or business case, is required.

    Third, a business plan is required when the previous plan has reached its use-by date. If the original business plan set forth a three-year plan and the business just celebrated its second birthday, it is time to write a new plan.

    However a business plan is never done. Business planning must be seen as a continuing process without an end point. Rather, at some points the process becomes more formal and receives more attention from management, partners, and other stakeholders.

    The "e-difference" in e-Business Planning

    How is an e-business plan different from any other business plan? First, it must be said that there are far more similarities than differences. A business is a business and a plan is a plan, so most of what you expect to see in a business plan will also be in an e-business plan. Beyond adding an "e" to the title, what are some of the differences that make writing an e-business plan different from writing a business plan?

    In all these ways, and more, writing a business plan for an e-business is different, new, exciting, and difficult. In the lessons ahead, this tutorial will continue to point out the "e-difference" in e-business planning.

    Navigation Guide for the e-Business Plan Tutorial
    Introduction to the E-Business Plan Tutorial
    --Top Ten Resources for Writing an e-Business Plan
    Fundamentals of e-Business Planning
    Writing a "Read Right" Plan
    Executive Summary
    Business Description
    --Mission Statement
    --Business Goals
    --Project Objectives
    --Business Model
    Market Analysis
    Competitor Analysis
    Operations
    Financial Statements
    Making an Effective Business Plan Presentation
    Appendix: e-Business Plan Tutorial Assignments

    This e-Business Plan lesson was last updated on June 7, 2005. Questions, comments, and suggestions for improvement can be sent to Dennis Viehland (d.viehland@massey.ac.nz).