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How To Create A Marketplace Business Plan In 11 Steps: Full Guide

Both in the B2C and B2B industry, marketplaces have reshaped how we purchase online. They are flourishing in all verticals today, from large-scale consumer markets to B2B niche sectors. Whether you are raising capital or applying for a grant, you will need a solid business plan for your marketplace startup.

Whilst every marketplace is unique, we strongly recommend to follow in your business plan a clear structure vetted by dozens of high-profile VC firms globally. Having a powerful and clear business plan will maximise your chances of raising capital from potential investors.

In this article we walk you through the 11 sections you must have in your Marketplace business plan. Let’s dive in!

Note: If you are looking for a pitch deck instead, read our guide here. Although business plans and pitch decks are similar, they are also very different in their format. If you aren’t sure what is best for you, we recommend to read our article on the key differences between business plans and pitch decks.

Marketplace Business Plan: The Template

If you are creating a business plan for your marketplace startup, we recommend you follow the following structure:

  • Executive Summary
  • The Problem
  • The Solution
  • Market Opportunity
  • Competitive Landscape
  • Business Model
  • Intellectual Property
  • Marketing Strategy
  • Team
  • Roadmap
  • Financial Plan
team working on a business plan for a marketplace

1. Executive Summary

The executive summary is the introduction of your business plan. This is a section you should spend a lot of time on as it’s the first impression investors will have when looking at your business plan.

The executive summary should fit in 2 pages maximum. Make it to the point, concise, and make sure to answer the following questions:

  • What is the problem you want to solve?
  • What is your solution?
  • Who are the co-founders behind the project?
  • Do you have early traction?
  • What are you asking for (capital from investors, government grant application, etc.)?

2. The Problem

This is the “why” of your business. Explain in this section what is the problem you are trying to solve.

The greatest businesses are solving big problems, yet they aren’t necessarily obvious. For instance, your marketplace might be in a niche B2B market and digitalising a legacy industry (health supplies for private clinics for instance). As such, you are solving an important problem for private clinics: the lack of product information, choice and unfavourable bargaining power from large suppliers.

Ideally you would list the 2/3 friction points you aim to fix. For instance, digitalisation usually fixes multiple problems at once: it is fast, seamless and accessible (vs. slow, prone to errors and non-readily available / accessible solutions).

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3. The Solution

Your startup builds and commercialises a product and/or a service which solves the problem explained earlier.

This section should not explain in detail your product nor how it works. Instead, it should focus on the benefits for your customers.

Ideally, you should compare the pain points explained on section 2 (the Problem) to the benefits your solution brings to your customers. That way, it is crystal clear to investors your solution really adds value to potential customers.

Following our marketplace example above, the benefits could be:

  • Availability of products and comparability: clinics can choose exactly the product they are looking for, easily comparing features vs. alternatives
  • Price competition ensuring best price-quality ratio

4. Market Opportunity

Here, you need to clearly identify 2 very important metrics:

  1. Market size: how big is your market?
  2. Market growth: how fast does your market grow?

If you are operating in a niche market, chances are that you will face some challenges: the information might not be publicly available. In any case, you should be able to make a high-level estimation of your market. Read our article on market sizing and how to estimate TAM, SAM and SOM for your startup.

When looking for these metrics, you have multiple sources of information: public reports, specialised press, etc. Even public companies publish press releases and annual reports including some of their proprietary market estimates so be sure to look there too.

market section of a marketplace business plan

5. Competitive Landscape

How fragmented is your market?

Are there 3 big players sharing 90% market share or thousands of small players? Here, refer to public market reports and your own understanding of the competitive landscape.

A few questions you could ask yourself, among others:

  • Who are your competitors?
  • Are they local, regional, national or global?
  • Are there any marketplace already in your industry or suppliers only?
  • What’s the bargaining power of suppliers vs. buyers?

Where do you position yourself vs. competition?

Is your solution a game changer other competitors don’t have (yet)? Do you have competitors with similar products/services?

Ideally, you would create a small table with, for each type of competitors (e.g. wholesalers, marketplaces, direct suppliers, etc.) the main characteristics they share or not. For instance, do they all a global presence? Do they cover all the products you offer? Are they selling multiple brands / suppliers products? What is their relative price positioning (expensive vs. accessible)?

6. Business Model

This section is very important. Now that we have clearly identified the problem you are solving and the benefits of your solution, let’s have a closer look at your product.

This is where you clearly explain 2 key things:

Which products/services do you offer?

Marketplaces typically act as intermediary between sellers and buyers for specific products and/or services. Unfortunately, the global marketplaces like Amazon are exception to the rule here.

Here you will need to explain clearly what is your product offering: what services/products are you focusing on? Ideally, you would show a breakdown in terms of orders or revenues (pie chart for instance). Indeed, using our health supplies B2B marketplace example above, you might only focus on disposable health supplies (and not heavy medical equipments) for instance.

Another key information to add here is the average order value: what is the average value of the products? Are products transacting on your marketplace $50 piece second-hand clothing or $20,000 specialised industry rental machinery?

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Pricing model

Marketplace are generating revenues from a number of sources, usually there are 3 main sources:

  • Commission revenue: the main source of marketplaces. Marketplaces generate commissions revenues from 2 sources: either percentage of order value (for instance 10% of all transactions’ value) or a fixed fee instead (for instance $20 per transaction)

Note: the sum of commission revenues as a percentage of total transaction value (gross merchandise value) is usually referred to as “rake” or “take rate”. For a refresher on the 10 most important marketplace metrics, read our article here.

  • Subscription revenue: you offer a tiered system, freemium or not (free plan) users need to pay for (monthly or annual billing cycle). You can charge either sellers or buyers (or both) for accessing the marketplace
  • Additional revenues: marketplaces can sell add-on services such as promotion & content (e.g. promoted ads), white-label products, marketing and branding services, etc.

7. Intellectual Property

This section is optional: only include it if you already have a MVP. If so, you have a strong argument for product-driven investors which will give a lot of credit to your tech.

Be careful not to go into too many specifics though: investors aren’t always engineer by training. Do not put things like the programming language you have chosen (e.g. React, Python) or the database provider (PostgreSQL, MongoDB).

Instead, include things such as:

  • whether you have a white-labelled solution or a proprietary back-end / database
  • how many full time front/back-end engineers you have
  • how much you invested already in your tech
piece of code within a marketplace business plan

8. Marketing Strategy

This section explains how you acquire sellers and buyers respectively.

Depending on the type of customers you have, acquisition will likely be different. For instance, large suppliers (sellers) are usually acquired via outbound acquisition (Sales representatives). Instead, consumers (buyers) are acquired purely through traffic (paid or organic).

The different sources of acquisitions for marketplaces are:

  • Paid marketing: any paid digital marketing campaigns (pay-per-click or per-impressions), whether it is search to your landing page (e.g. Google Ads), social media (e.g. Facebook Ads) or referrals. Paid marketing is mostly used to acquire sellers and buyers. As explained above, whilst buyers can be acquired exclusively through paid marketing or organic growth (see below), sellers can also require sales team effort (see below)
  • Organic growth: you acquire sellers and buyers without paying for it. Organic growth is typically driven by investment in content (SEO, social media)
  • Outbound acquisition: you acquire sellers (or rarely buyers) thanks to your sales team who contact potential customers via phone, emailing or in-person sales efforts. This is especially true for marketplaces who connect a few large suppliers to potential buyers.

Once you have clearly explained your acquisition strategy and what tools you are using (e.g. Google Ads for paid search, social media and content for organic growth), ideally you can show, among others:

  • Your average Customer Acquisition Cost
  • Conversion rates and its components (add-to-cart rate, cart abandonment rate)
  • Your monthly paid ads budget
  • The number of followers you have on social media
  • Your newsletter count

Note: for a refresher on the 10 most important marketplace metrics, read our article here.

mobile app business plan

9. Roadmap

The roadmap tells investors where you are going and how is product going to evolve in the future. You can either keep it high-level (e.g. your long-term strategy) or more detailed (e.g. the pipeline of the near-future product features).

Investors do not just invest in your product as it is today. For example, you might only have developed a MVP with limited features for early-adopters while your product could be tweaked and serve a much larger customer base in the future.

Also, you might be broadening the type of products you offer in the future. Or you might introduce premium services such as a subscription, or premium listing fees. All of these additional features are very important to add in your investment deck.

Note: if you choose to include your product pipeline, keep it very simple. Your marketplace business plan isn’t your product manager’s presentation to engineers. Instead of features, focus on the additional benefits and customer segments you might target as such.

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10. Team

In this section you should focus on the people behind the company. Unlike in the executive summary, the team section of your business plan should not be limited to the cofounding or management team.

Instead, you should explain the current organisational structure of your company, the different teams, who they report to and their relative size.

For the people, keep it short. Keep biography to a minimum and only to key people (cofounders and management team). As rule of thumb, 5 lines per team member are enough, 10 a maximum.

When it comes to biographies, only include what is relevant: name, position, years of experience and/or previous companies is more than enough.

What about advisors?

Do you have angel investors with significant experience who advise you on strategy? Do you have a PhD who acts as advisor to your marketplace startup (on regulation and market access matters for instance)?

Any advisor should also be included here, with the same level of detail as for the management team.

Demonstrating in your business plan that not only team members but also experts are advising and/or sitting on your board is a strong selling point.

Note: add a clickable link to the respective Linkedin profiles so investors can refer to a more exhaustive resume for your team members (if relevant)

11. Financial Plan

Along with your product and the team, this section is very important. Unfortunately, many startups overlook the importance of financial projections in their Marketplace business plan.

Think about your audience: investors (venture capital firms or angel investors) are financially literate individuals. As such, they invest in your business to generate returns. Logically, they care a lot about your financials and more especially, the expected financial performance of your business.

Do not expect investors to make up their own plan for your startup if you haven’t. As CEO, founder or entrepreneur alike, you should have a clear idea of where you are going.

As rule of thumb, the more advanced your startup is, the more granularity you should include here. Pre-seed startups might keep it short (2/3 pages maximum) yet we recommend seed and Series A+ startups to include 4/5 pages at least instead.

Common marketplace metrics you should include in your financial plan slide are:

  • Gross Merchandise Value (GMV)
  • Average Order Value (AOV)
  • Seller / Buyer Ratio
  • Repeat Orders Rate
  • Take Rate
  • Customer Acquisition Cost (CAC)
  • Customer Lifetime Value (CLV or LTV)

For a complete list of the 10 most important metrics for marketplace businesses, refer to our article here.

Need a Marketplace financial model?