Etsy Business Plan Template
If you want to start an Etsy business or expand your current Etsy business, you need a business plan.
Fortunately, you’re in the right place. Our team has helped develop over 100,000 business plans over the past 20 years, including thousands of Etsy business plans.
The following Etsy business plan template and example gives you the key elements you must include in your plan. In our experience speaking with lenders and investors, the template is organized in the precise format they want.
Etsy Business Plan Example
I. Executive Summary
Business Overview
[Company Name], is an e-commerce company that owns a shop under the Etsy platform. The Company retails high-quality handmade and vintage items, as well as craft supplies. The Company aims to become one of the highest-selling shops on the Etsy platform in the United States.
Products Served
[Company Name] will provide the following products:
- Jewelry
- Bags
- Clothing
- Home DĂ©cor
Customer Focus
[Company Name] will serve individuals who shop online. The Company will primarily offer its products to:
- Millennial Women
- Gen X Women
- Gen Z Women
Management Team
[Company Name] is led by [Founder’s Name], who has been crafting jewelry and décor for over [xx] years. While [Founder] has never sold her products on an ecommerce platform, she has a loyal and rapidly growing following. She will have the help and support of her business partner, [Insert Name], who will handle the marketing and admin tasks for the company.
Success Factors
[Company Name] is qualified to succeed due to the following reasons:
- There has been significant growth in general demand for unique, handcrafted jewelry and décor over the past few years. In addition, [Founder’s name] is a maker with some notoriety, and her clients have provided highly positive feedback pointing towards a national demand for her products.
- The management team has a track record of success in the e-commerce business.
- Easy access to the internet will be a major success factor for the company.
- The e-commerce business is a proven, successful business in the United States.
Financial Highlights
[Company Name] is currently seeking $200,000 to launch its shop on the Etsy platform. Specifically, these funds will be used as follows:
- Professional photography and listing service: $10,000
- Working capital: $190,000 to pay for marketing, salaries, equipment and supplies until [Company Name] reaches break-even.
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name], is an e-commerce company that owns a shop under the Etsy platform. The Company retails high-quality handmade and vintage items, as well as craft supplies. The Company’s primary product line includes jewelry, bags, clothing, and home dĂ©cor. The Company aims to become one of the highest-selling shops on the Etsy platform in the United States.
[Company Name]’s History
[Founder’s Name] is an entrepreneur with a passion for hand-crafting unique jewelry, accessories, and décor. [Company Name] will establish itself as a well-respected business on the Etsy platform.
Upon surveying her existing customer base and finding a potential location for ecommerce expansion, [Founder’s Name] incorporated [Company Name] as a jewelry and décor production company on [date of incorporation].
Since incorporation, the company has achieved the following milestones:
- Developed the company’s name, logo, and website
- Created the list of hand-crafted products
- Determined equipment and inventory requirements
- Began recruiting key employees with experience in ecommerce or in artisanal crafts.
[Company Name]’s Products/Services
[Company Name] will provide the following products:
- Jewelry
- Bags
- Clothing
- Home DĂ©cor
III. Industry Analysis
[Company Name] competes against small, individually owned brands in the industry and major regional or national chains. The coronavirus pandemic supercharged Etsy’s growth, from $818 million revenue to $1.72 billion over the past three years. Etsy also doubled active buyers in that time period. Last year, the number of active sellers on the Etsy.com platform stood at 4.3 million and the site had 81.9 million active buyers who had bought goods through the platform.
Going forward, the hand-crafted goods market is forecast to reach a value of $448.5 billion in the next five years, registering a CAGR of 10.8%. Moreover, North American hand-crafted goods market reached a value of around $242.4 Billion. With the emergence of online retailing and proliferation of various e-commerce websites, the accessibility to artisanal products has significantly increased. Consumers can now buy artisanal items with the click of their smartphones and have them shipped anywhere in the world. Moreover, social media and the internet have made it more convenient for craftsmen to directly access their target markets.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve individuals with an eye for unique, artisanal jewelry and décor, who shop online.
The precise demographics of individuals living in the U.S. are as follows:
| United States | |
|---|---|
| Total Population | 312,796,426 |
| Population Male | 49.00% |
| Population Female | 51.00% |
| Median Age | 37.5 |
| Target Population by Age | |
| Age 18 to 24 | 9.99% |
| Age 25 to 34 | 13.08% |
| Age 35 to 44 | 12.94% |
| Age 45 to 54 | 14.64% |
| Age 55 to 64 | 12.43% |
| Median Household Income | $57,639 |
| Households w/disposable income | |
| Income $50,000 to $74,999 | 18.03% |
| Income $75,000 to $99,999 | 12.97% |
| Income $100,000 to $124,999 | 8.65% |
| Income $125,000 to $149,999 | 5.40% |
| Income $150,000 to $199,999 | 5.12% |
| Income $200,000 and Over | 5.34% |
Customer Segmentation
The Company will primarily target the following customer segments:
- Millennial Women – this demographic comprises the most significant market for [company name]. These women are comfortable making ecommerce purchases, and are established in their careers, which gives them disposable income.
- Gen X Women – this demographic is more likely to purchase higher-end products online, as their incomes are typically higher than the other target demographics for this industry.
- Gen Z Women – these women are digital natives, and are the most comfortable buying products online. While their disposable incomes are typically lower, the volume of purchases made by this age group make them a significant market.
V. Competitive Analysis
Direct & Indirect Competitors
Competitor 1
The most widely recognized eCommerce platform around the world, Competitor 1 is accepted as the gold standard for corporate brands and small business owners alike. With Competitor 1, one can take advantage of an eCommerce platform that offers a website builder with hundreds of templates, all of which can be customized with the brand’s specific logos, images, videos, and text. With vast customization control and strong analytics, Competitor 1 offers the most powerful eCommerce functionality on the company’s list while also being user-friendly enough for most beginners to manage.
Competitor 2
Competitor 2 is an online marketplace that deals in artistic products of all kinds developed by independent experts. It not only provides a personalized platform for sellers to display their handmade goods but also helps them in creating a unique website/online gallery for the same. Competitor 2 provides a wide range of templates that can be modified with a simple bit of training. It accepts sellers of authentic artistic items on their platform for displaying their products, which they then allow the customers to buy. Competitor 2 ideally makes money through commissions from sales, but it also has paid plans for sellers wishing to utilize more resources on their platform.
Competitor 3
Competitor 3 is an online marketplace for artists that supports only US-based entrepreneurs. The seller needs to have US citizenship to sell on the platform, but the buyer ideally can be from anywhere in the world. Essentially, this C2C company focuses on promoting handmade products made by Americans for everyone! Competitor 3 provides a unique website for its customers. Its website builder is so easy to understand that even a novice can readily navigate through its technicalities.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Management: The Company’s management team has xx years of business and marketing experience that allows them to market and serve customers in an improved and sophisticated manner than the competitors.
- Relationships: Having lived in the community for xx years, [Founder’s Name] knows all of the local community, media, and other influencers. Furthermore, she will be able to draw from her existing personal and professional relationships to grow her client base.
- Great service at an affordable price: The array of hand-crafted products offered by [Company Name] nearly equals the most premium positioned competitor, [Competitor Name]. However, [Company Name] will offer these products at a much more affordable price.
VI. Marketing Plan
The [Company Name] Brand
[Company name] seeks to position itself as an upper-middle-market competitor on the Etsy platform. Customers can expect to receive premium-quality, authentic, hand-crafted items.
The [Company Name] brand will focus on the company’s unique value proposition:
- Offering a unique range of products
- Good packaging, which can enhance the safety of the products
- Affordable prices
- Providing excellent customer service and support.
Promotions Strategy
[Company Name]’s promotions strategy to reach the audience includes:
Pre-Opening Events
Before opening a shop under Etsy platform, [Company Name] will organize pre-opening events designed for prospective customers, local merchants and press contacts. These events will create buzz, and awareness for [Company Name] in the area.
Advertisement
Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The Company will advertise its products in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.
Local Publications
[Company name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. It will run regular advertisements to maintain exposure to relevant markets.
Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content in terms of different handmade products and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.
Word of Mouth Marketing
[Company name] will encourage word-of-mouth marketing from loyal and satisfied clients. The Company will use recommendations and word-of-mouth marketing to grow the customer base through the network of its existing customers. The Company will be incentivizing its existing customer base to encourage their friends to come and try their unique, hand-crafted products.
Special Offers
Offers and incentives are an excellent approach to assisting businesses in replenishing the inevitable customer churn each year. The Company will introduce special offers to attract new consumers and encourage repeat purchases, which will be quite advantageous in the long run.
Pricing Strategy
[Company Name]’s pricing will be moderate, so customers feel they receive great value when purchasing products listed in the Etsy shop. The customers can expect to receive quality products at a more affordable price than what they pay on a luxury e-commerce platform.
VII. Operations Plan
Functional Roles
To execute on [Company Name]’s business model, the company needs to perform several functions, including the following:
Service & Administrative Functions
- Product creation
- Logistics and Operations Manager
- Sales manager
- Customer service
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Inventory management
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name], an entrepreneur with a life-long passion for hand-crafting unique jewelry, accessories, and décor. She has been crafting jewelry and décor for over [xx] years. While [Founder] has never sold her products on an ecommerce platform, but she has a loyal and rapidly growing following.
[Founder] graduated from the University of ABC where she majored in art. She has also earned an MBA in Sales and Retail Management from XYZ University.
Hiring Plan
[Founder] will serve as the Chief Executive Officer. In order to launch its shop on the Etsy platform, the company will need to hire the following personnel:
- Accountant
- Inventory and Quality Assurance Manager
- Sales and Marketing Manager
- Shipping and Logistics manager
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sale of products on the Etsy platform. The major costs for the company will be production and shipping costs, and salaries of the staff. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $200,000 to launch its shop under Etsy platform. Specifically, these funds will be used as follows:
- Design and build-out: $10,000
- Working capital: $190,000 to pay for marketing, salaries, equipment and supplies until [Company Name] reaches break-even.
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of customers per day | |
|---|---|
| Year 1 | 40 |
| Year 2 | 60 |
| Year 3 | 80 |
| Year 4 | 100 |
| Year 5 | 120 |
| Average order price | $32 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
