How to Build a Seed to Series A Business Plan for your Disruptive E-commerce

Samaipata Ventures’ early-stage business plan template

By Álvaro González San Pedro, Associate at Samaipata Ventures

After the great feedback we got from our internal 3 step/5 min cohort analysis template, we thought it could be useful to share other internal templates that can come in handy. Today we bring an especially useful one for disruptive e-commerce models (we call them dis-commerce). So if you have a marketplace hold on, we’ll share one for you pretty soon!

But first, let’s start by explaining what we understand by disruptive e-commerce (dis-commerce), since this term might be new for you. A dis-commcerce is an evolution of the business model that characterizes e-commerces together with new trends in consumption. They have an innovative and revolutionary nature, disrupting traditional models. Innovation is introduced in their business models in various ways, but the most important ones usually are: (1) in the purchasing process: by simplifying the purchasing process for the customer or reinventing it — examples like Dollar Shave Club and Blueapron, as international references; or (2) by vertically integrating operations and/or implementing disruptive technology — such as Hawkers, Pompeii in Spain or our portfolio company Foodchéri in France. Dis-commerce are business models whose core asset is their brand (Digitally Native Vertical Brands or DNVB, which are generally linked to costumer experience and costumer identity) or have a high degree of vertical integration (v-commerce).

So if you think your startup fits any of these profiles, or if you have a great idea and want to create a disruptive e-commerce project, but you are struggling with analysis and data to predict and measure the performance of your business, you might find our template very useful. Here it comes!

When you have a startup in seed or pre-series A stage, an internal control of KPIs and financials is essential for you and your investors. Besides, at this stage your business needs to operate fast, and managing millions of documents hinders your performance. We recommend keeping it simple but comprehensive, with total control of your business at all levels. Why not merging KPIs, business model and cohorts analysis all in one document? The model attached aims to serve as a basis for all the data that a dis-commerce should start recording to have a clear picture of everything that is going on in the business. Are my growth forecasts realistic? Am I spending enough on marketing to sustain this expected growth? What could I do if not? Are the current stocks levels sustainable? These are just a few of the questions this model aims to answer.

As investors, we would not expect a pre-seed or seed startup to have this template fulfilled from day one. But having it up and running by the time of your serie A will ensure you work-saving and rigorous control of your business.

Who can this model be useful for? Dis-commerces, like DNVB and v-commerce brands, which have already gone through a pre-seed/seed round and are expecting to top a seed/series A. Generally, these models buy and sell something as part of a transaction that is registered in their Balance sheet. The ideal is to start implementing this model right after the seed round and have it polished by the time you’re ready for Series A.

What for? This model will be key for your internal reporting, and of course, to report externally. But the really important thing is to master reporting internally, in a way that is efficient and useful for decision-making. Of course you’ll need to report externally as well to your Board, but to avoid duplicating efforts make sure you find a model that fits both and use it interchangeably.

When do I use them? For dis-commerces with debt, stocks etc., it becomes even more important to make monthly closings, the first 10 days of each month, in our view. This is the only way to take decisions, at times very important ones, on time, not once they are practically irreversible. We’ve already seen too many examples of this and trust us, it makes you really wish you had spend a bit more time on internal controlling and reporting.

What can you learn from this model?

• The Balance sheet becomes sacred: When you deal with stocks, there is even more complexity below EBITDA. Although the model takes into account all stages, it does emphasize numbers below: stock level, stock rotation, payment days, financial debt, etc. Much attention should be paid to these numbers.
• Run a reality check on your forecasts: Once you make forecasts (year-on-year, YoY, to avoid seasonality) make sure they are realistic. Test them against your other numbers to ensure yourself that with your current user recurrence (cohorts), total marketing expenditure and customer acquistion cost (CAC) to see if your forecasts are realistic. If not, you can either adjust your forecast or stick with it as a goal and increase your efforts to retain or gain new users. In any case, it will surprise you how useful is this sanity check of your top-line forecasts, and you sill see that with a good understanding of your CAC and your cohorts you can estimate your potential demand quite precisely! In this regard, this template can be integrated with the cohorts analysis template we already shared with you.
• Bring all your numbers together — keeping it simple and comprehensive, all in one: one of the keys of this template is that it aims to be as comprehensive as possible bringing three sets of numbers together: operational KPIs, financial statements and business data.

This is how the template is organized:

1. KPIs tab to control how your activity is evolving: sales, cost of goods sold (COGS), logistics, delivery, etc.
2. Financials: profit & losses, cash flow and a Balance sheet.
3. Other data to support: corporate level assumptions, funding assumptions and a cohort analysis to run a reality check on your assumptions. Don’t worry if don’t manage to record all this data at the beginning, the idea is to gradually build a more robust database and have it completely under control by the time you’re ready to enter a series A round.

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‍At Samaipata, we are always looking for ways to improve. Do not hesitate to send us your thoughts. We strive to partner with early-stage founders and to support them in taking their business to the next level. Check out more ways in which we can help here or for all our other content here‍

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