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Business planning and automation

CHECK 12
      Make a business plan

What is it?

A business plan is essentially a record that summarises everything about your business. The right plan helps business owners consider all aspects of running a successful and profitable business, such as management, sourcing, customer service, budgeting and finance, and growth. Creating an effective plan takes a lot of energy, commitment and time, but imagine building a house without a plan.

Three reasons to do it

Not having a business plan will lead to inefficiencies in your operations and may mean you lose sight of the big picture.

1 Set yourself clear targets so you can track your business's progress.
2 Create a written record of your business information, suppliers, inventory, staff and all other components of running your business.
3 Ensure you stay on top of all the administration involved in running a successful business.

Getting started

Before you begin, make sure you have all the relevant information within easy reach. It's sensible to create your plan on computer so you can easily update it, insert information when and as required, and complete any additional research via the internet. Allow yourself plenty of time and space — you will need to concentrate and complete the plan thoroughly.

Getting it done

It's important you complete as many sections of your business plan as possible. The document should evolve over time, and some information will need to be added at a later date. Remember to keep your business plan fresh — update it frequently and return to it often to ensure you are on track to meet your targets.

Check 12: Create a business plan

Conduct an internet search for ‘business plan template' and download the one that best suits your needs. Though not specific to online or eBay, the Australian government's free template at http://goo.gl/gsqVfV is recommended. Add sections to tailor any template to your business's needs. Complete the template and save it in a safe place on your computer. Set yourself a reminder to review your plan regularly.
Tip: It's a good idea to share your business plan with a mentor, a business adviser or someone you trust to give you sound professional advice. Save a second copy of your plan on a USB (or disk) and keep it in a safe place away from your computer.

Detailed costs and time for check 12

3 hours to 2 days to comprehensively complete your business plan. You can download a lot of business plan templates free from the internet.
1 to 2 hours every month to revisit, update and add to your plan.

Business impact

It may be harder for you to directly measure the impact a business plan has on your business but a good plan will lead to:

an increase in business efficiencies (sourcing, profit calculations, staffing, goal setting).

More information

Visit the Australian government's www. business.gov.au website for guides and business planning tools at http://goo.gl/iNhefl.

CHECK 13
      Create a profit and loss spreadsheet

What is it?

A profit and loss spreadsheet lists every single expense associated with running your business, and every single form of income. Tallying the two allows you to assess your gross income (total sales) and your net income (total sales minus total costs). Your profit margin is net income as a percentage of gross income.

Three reasons to do it

Without a comprehensive profit and loss spreadsheet you will have no idea exactly how much profit you are making and therefore how viable your business may be.

1 Easily keep track of all your expenses and income, which can help with tax returns and GST statements (if you complete them).
2 Gauge your profit margin at any given point in time so you can adjust expenses to ensure you maintain a set level of profit.
3 Keeping track of expenses makes it easier for you to compare different service providers to ensure you are always getting the best rates available.

Getting started

While you can create a profit and loss spreadsheet on a piece of paper, it's more sensible to use an accounting application such as Excel or Numbers, or within an existing accounting software package such as MYOB, which offers ‘live' or up-to-the-minute reporting. Other profit and loss templates are available for download from the internet.

Getting it done

It's important to be as comprehensive as possible and include every conceivable cost and source of income for your eBay business. Create a list for each month of the year, and tally months into quarterly statements (this will help if you need to create a quarterly business activity statement (BAS) for the tax office) and into each financial year (July 1 to June 30). For each entry, add columns for GST amount paid/received, capital or usual expense (essential for BAS — a capital expense is usually a piece of equipment that costs more than $1500), date and a notes column (to add specific details). Keep all related receipts in month and date order to assist with accurate and faster bookkeeping.

Check 13: Profit and loss report

You need to create two lists for a profit and loss report. Start with the costs of running your business, including (but not limited to):
  • eBay fees
  • PayPal fees
  • credit card processing fees
  • other costs, such as bank fees
  • cost of goods purchased
  • any taxes or duties paid on goods purchased
  • postage
  • packaging
  • stationery (thank you notes, letterheads, business cards and so on)
  • office supplies (paper, scissors, knives, tape dispensers, folders, filing systems, printer ink, pens, notepads and so on)
  • hardware, such as computer, printer, desk, chair
  • telephone/fax
  • internet service
  • third-party fees (designers, listing tools and so on)
  • accountant
  • lawyer/business adviser
  • software
  • electricity, gas, water
  • storage/warehousing organisation
  • additional resources (books, magazines, subscriptions and so on)
  • petrol/travel costs (trips to the post office, to meet suppliers and so on)
  • rent (including a portion of your mortgage relevant to the percentage of your home used in operating the business, if applicable)
  • insurance
  • cost of refunds, and replaced or damaged products
  • staff costs
  • GST/tax
  • advertising and marketing.
Next create a list of all income, including:
  • eBay sales
  • postage paid by buyers
  • additional fees paid by buyers (registered mail, extended warranty and so on)
  • additional sales
  • resale of any equipment or goods used in running your business.

Detailed costs and time for check 13

3 to 5 hours to create your monthly template and label all fields according to your business's needs.
3 to 5 hours per month to complete your spreadsheet, depending on the size of your business.

Business impact

An accurate and current profit and loss report will allow you to adjust costs to help you:

improve profit
reduce time spent on administrative tasks and completing monthly, quarterly and yearly reporting.

More information

Visit the Australian government's www.business.gov.au website for more information about profit and loss reports at http://goo.gl/e4qOAX.

CHECKS 14 AND 15
      Create business policies

What is it?

Business policies are an eBay shortcut that allow you to apply the same types of policies across all or similar types of your eBay listings. They include such things as returns policies, handling time, payments and postage policies. Opting into the program is gradual, and when you qualify you will see a notice within My eBay.

Three reasons to do it

More than anything else, using eBay's business policies will save you a lot of time, now and in the future.

1 Ensure consistency of policies across your listings so buyers know what to expect every time they buy from you.
2 Utilising business policies makes it easier for you to update all of your listings at once, instead of having to do them one at a time.
3 Mix and match your policies by different listing or product types to ensure you're offering the best possible service to your buyers.

Getting started

Before you begin arbitrarily applying your proposed set of business policies, it's vital to ensure that they are competitive within your category.

Check 14: Compare competitors' policies

Take a look at the policies offered by your main competitors and assess how you can offer the same, or perhaps better.

Getting it done

If you've created a comprehensive business plan, you should have a list of your products for sale. Within your business plan, or by creating a new list, group your products into similar types and assign your business policies against each product type.

Check 15: Create your policies

Using eBay's Business Policies functionality, assign your business policies against each product type. Complete instructions for how to update, amend and cancel your business policies can be found at http://goo.gl/Qu9ONf.

Detailed costs and time for checks 14 and 15

1 to 2 hours and free to assess the policies offered by your competitors.
1 to 4 hours and free to update your business policies using eBay's editing tool.

Business impact

To gauge potential impact, measure if there's:

a decrease in the number of questions asked by your buyers
an improvement in the ratings left by buyers.

More information

See eBay's business policies page at http://goo.gl/HFxDc7.

CHECK 16
      Automate feedback

What is it?

Every time one of your buyers pays for a product you should leave them professional, polite and branded feedback. Consider a message such as ‘Thank you for choosing to buy your [insert product type] from [insert your eBay name]'. Rather than manually leaving feedback for each transaction, you can choose to automatically leave random feedback comments for your buyers as soon as they have paid.

Three reasons to do it

Automating as much of your eBay business as possible means less time spent completing basic administration tasks.

1 Automation saves time and effort.
2 It ensures your buyers always receive feedback the moment their payment has been received, encouraging a positive trading relationship and creating a professional impression.
3 By carefully entering your list of random feedback comments you can be assured that they will be consistent, branded and error free, thereby creating a more professional brand image for your customers.

Getting started

A note about feedback. Feedback was originally utilised by eBay to help create a more transparent marketplace for buyers and sellers alike. Over the years the system has evolved considerably, including removal of the ability for sellers to leave their buyers negative feedback. It's important to concentrate on the bigger picture — yes, feedback is an indicator of your eBay reputation, but it's just one of many factors buyers assess before choosing who to purchase from. What's important is that you remain objective about your listings and ensure you have removed as many points of confusion or annoyance as possible. If you receive negative feedback, learn from your experience and adjust your business accordingly. Multiple negative ratings are an alert that you may need to make more systemic changes to the way you do business.

You need to ensure your feedback score is comparable to those of other sellers within your category, and remember that your overall seller reputation (feedback, detailed seller ratings, the number of disputes lodged against you by buyers) is just one factor for determining your listing's visibility on the search results page.

You will need to be subscribed to Selling Manager in order to automate your feedback preferences. To subscribe go to http://goo.gl/4o26fL.

Getting it done

Sellers who leave their buyers positive, professional and branded feedback as soon as they have paid are setting a positive tone for the transaction.

Check 16: Automate feedback

In My eBay under Selling Manager on the left, click Automation Preferences. Check the ‘Automatically leave the following positive feedback' box and choose your preferred option. Click Edit stored comments to update your random comments. Follow complete instructions at http://goo.gl/PIoQCJ.
Tip: Ask a colleague or friend to check it carefully, or cut and paste your comments into a spellchecker to ensure that you make no errors.

Detailed costs and time for check 16

$9.95 per month to subscribe to Selling Manager Pro (free if you subscribe to an eBay store).
30 to 60 minutes to create your feedback and set up automation.

Business impact

To gauge potential impact, measure if there's:

an increase in the number of positive feedback ratings left by your buyers.

More information

To read all about feedback go to http://goo.gl/o3fzXV.

CHECK 17
      Automate unpaid items

What is it?

From time to time, some customers may complete checkout on eBay but then fail to pay for the item. eBay needs to be made aware of when this occurs as it has policies for buyers who fail to pay for their purchase. More importantly, unless you advise eBay that your buyer has failed to pay, you will be charged final value fees on the transaction. Lodging an unpaid item claim is the only way to ensure eBay monitors buyers who consistently fail to pay, and the only way to secure a refund on your final value fees.

Three reasons to do it

Staying on top of unpaid items can be troublesome if you sell hundreds or thousands of items each week. You need to remind buyers to pay, but you also need to advise eBay when they fail to respond to the reminders. Automating the process means you never have to manually complete an unpaid item claim.

1 Save time on administration tasks.
2 Secure your final value fee refund on all unpaid items automatically.
3 Help keep the eBay marketplace safe and fair by ensuring that eBay is alerted to buyers who consistently fail to pay for their purchases.

Getting started

It's important to note that eBay has a policy against sellers who abuse the unpaid item process. This can lead to a reversal of credits or even suspension. Using the automated process means that only qualifying items will be included. For more information on abuse of the policy go to http://goo.gl/V0hXRe.

Getting it done

Once you've created the automated process, qualifying final value fees will automatically be credited to your eBay account.

Check 17: Automate unpaid items

In the Accounts tab within My eBay click Site Preferences, click Show to the right of Unpaid Item Assistant then click Edit. Select ‘Yes I want Unpaid Item Assistant to open and close cases on my behalf', then in the drop-down menu select the number of days you want Unpaid Item Assistant to wait before opening a case.

Detailed costs and time for check 17

5 to 10 minutes and free to set up automated Unpaid Item Assistant.

Business impact

To gauge potential impact, measure if there's:

a reduction of instances where final value fees are charged after the buyer has not paid for the item.

More information

Follow the complete instructions for Unpaid Item Assistant at http://goo.gl/TiXLhx.

CHECKS 18 AND 19
      Automated inventory management

What is it?

Once you have listed your inventory on eBay, it can take a lot of time to manually keep track of how many products you have listed, how many you have remaining for sale and how many you have left in your warehouse yet to be listed. Accurate and efficient inventory management is a critical component of running a successful eBay business.

Three reasons to do it

The less time you spend manually assessing your stock levels, the more time you will have to invest in other aspects of running your business, such as improving service levels or securing better deals from your suppliers.

1 Stay on top of reordering products by creating alerts when your stock levels are low.
2 Avoid listing more stock than you have available, which can lead to disappointing buyer experiences that may result in your receiving negative ratings.
3 Save time by carefully managing your inventory levels and maximising your cash flow so you reorder stock only when absolutely necessary.

Getting started

Subscribe to Selling Manager Pro to gain access to the inventory management tool. You can subscribe at http://goo.gl/4o26fL.

Check 18: Conduct a stocktake

Before you begin, it's a good idea to conduct a stocktake of all of your inventory so you can be sure that the numbers you enter into eBay are accurate. Your business plan should contain a list of all of your products for sale, and a well-organised warehouse means you should be able to count stock figures effectively. Update your Stock on Hand figures after you have completed your stocktake.

Getting it done

Now you have your updated stock figures, use Selling Manager Pro to update your Total on Hand numbers. This total is independent of how many transactions you have associated with pending, active or unsent. The inventory system will allow you to relist, create stock alerts when your levels are low, and make a record of other information such as cost price, supplier details and where they are located within your warehouse.

Check 19: Update eBay inventory

Within My eBay under Selling Manager Pro on the left, click Inventory then click the Create Product button. Complete the relevant product information then click Create Listing. Alternatively, for existing listings, click Active under Selling Manager Pro, check the box next to the relevant listing then use the drop-down next to Action to click Save to inventory. Complete the relevant product information then click Save to inventory.
Once you have created your products within your inventory, you can then update all of the specific information outlined above, including alerts. For complete instructions go to http://goo.gl/JPQo3j.
Tip: Third-party providers also supply inventory management systems that allow you to accurately assess your stock levels, set alerts and automate rules. The prices and types of service available vary. You can compare some of the services at http://goo.gl/qXaKV9.

Detailed costs and time for checks 18 and 19

1 to 6 hours to complete a product stocktake (longer for larger businesses).
5 to 15 minutes per product to create a new product template within Selling Manager Pro.
1 to 5 minutes per product to save active listings to your product inventory.
$9.95 per month to subscribe to Selling Manager Pro (free if you subscribe to an eBay store).

Business impact

To gauge potential impact, measure if there's:

a decrease in instances of your products being out of stock
increased efficiencies in ordering, calculating margins and maintaining supplier relations
a decrease in the time spent manually managing your inventory levels, eBay listings and relistings.

More information

A complete outline of Selling Manager Pro can be found at http://goo.gl/PJTwxL.

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