hi I'm patti scharf the co-founder of catching clouds and today we're going to
talk about how to make your e-commerce business profitable five tips for
knowing your numbers
a lot of ecommerce sellers forget that what they're doing is they're actually
running a business so if you're gonna run a business you need to run it like a
business and running a business is a lot like running a football team which
brings me to tip number one which is keep score keep score of the game you
don't see a lot of coaches who just turn their back to the field but
you'll see tons of people who will just gather up receipts and things like that
bring it to their tax preparer at the end of the year and even worse if
they've extended their tax return maybe it's in September so you've got a whole
year's worth of information on your business that is nine months stale by
the time you go get your taxes done that's not the way to run a business and
it's not the way to run a football game you know you don't find out the score of
the Super Bowl in October you know you you find out what's going on real time
so tip number one make sure that you're keeping score and that brings us to tip
number two how do you keep score if you don't know the rules of the game so what
you need to do is learn the basics learn the basics about business learn the
basics about anything that's going to affect your business so a lot of people
they just focus on the sales and marketing aspect how do you get more
clicks how do you convert your customers your convert people who are visiting
your site into actual customers but they completely neglect all of the
back-office stuff you still need to pay attention to finance to admin to HR to
accounting basically anything that any other business would need to be healthy
and operational is something that you're going to need as well so one of the
rules of the game is going to be score keeping score keeping is accounting and
the way you're going to be able to tell how you're doing financially is by
looking at your financial statements I know it's super painful I know it's
really boring but just trust me it's gonna get a lot less boring once you
understand how to read them you're going to want to pay attention to the income
statement balance sheet and statement of cash flows those three documents are
what makes up your financial statements and I'll have lots of other videos
talking about what those all mean and to read them and things like that but
it's enough for you to know that these are things that you should be paying
attention to because these are the things that are telling you how your
business is doing which brings us to tip number three keep non-players off the
field you don't want the football players' kids and cheerleaders and random
people cluttering up the works don't run your personal money and your business
money through the same accounts you want to keep that stuff separate a couple of
months ago as talking to somebody who was saying they didn't want to outsource
their bookkeeping they always had problems with it because how would the
bookkeepers know if they are going out to dinner if that was a personal expense
or a business expense and I started talking about how well you know once you
get to know your bookkeepers they kind of know and start asking
questions and if they're confused they'll ask you about it
or whatever and then I stopped and went wait a second why do you have personal
expenses running through your business don't do that that's not good and if you
talk to any attorney any CPA they will tell you exactly the same thing when you
set up your business if you set it up as an LLC or S corp or something like that
and you're running personal expenses through there it's called piercing the
corporate veil and when you pierce the corporate veil that means that that
legal protection that you thought you had that you had set up this separate
entity for is pretty much obliterated because they're seeing that you're using
the company funds like a piggy bank so keep it clean keep it separate and keep
non-players off the field tip number four build the right team okay so when
you're looking at a football game you don't just have one person out there
running around and nobody else is involved
you've got quarterbacks and running backs and linebackers and blah blah blah
and off on the side of the field you've got you've got offensive coordinators
defensive coordinators you've got people who are selling tickets and beer you
know there's a lot that goes into running a business make sure that you
have the right team even if you have a really small business and it's
just you wearing 18 billion hats make sure that the tools that you're
using are meeting your needs that are serving its purpose to give you the
information you need to make good decisions all right so when I'm talking
about building a great team I'm talking about employees I'm talking about
independent contractors I'm talking about tools that you're using that are
helping you leverage the work that you would otherwise have to do by hand so
anything that will help you do more with less is what you're looking for and you
want to build a set of core tools or core people who are really just knocking
it out of the park because if you can do more with less
that's going to have a direct impact on your bottom line
so that's what you want to really focus on and you're going to want to find the
right people and then treat them well so that they want to stick around because
if you have high rapid turnover it becomes a real drain on your business so
take care of your team and work together as a team and you will have great
results so that's why tip number four is building a great team and that brings us
to tip number five keep working out this is an ongoing process you don't just get
in shape run a game and be done you've got another game coming up pretty soon
so just work out get in shape learn everything you need to learn so that you
can run your business and especially in e-commerce the field is... the game's
always changing we've tons of tools that are changing all the
time when you're trying to get data it switches around and you think you want
this tool but ooh! a new a new tool came that you can play with and you know it's
it's just a very quickly evolving industry so so if you're just starting
out in business here are a few books that I would recommend financial
intelligence for entrepreneurs is one my husband and partner Scott loves this
book gives it to everybody that he can think of because he is not an accountant
you just kind of plays one on TV I'm really the CPA and this helped him
really understand the financial aspects of what's going on another book that I
just read I really like is simple numbers straight talk big profits I'm
going to be doing another YouTube video too circling back to this one so I can
talk about a few things there are a couple of things I didn't agree with but
the vast majority and definitely the main premise I'm a huge fan so if you
haven't read this go check it out and then the other one I want to recommend
was profit first I think we loaned out our copy so I can't hold it up for you
but I'll put the information down in the description so that you can link to it
and again I'm going to do another YouTube video talking about that one the
it's a pretty interesting case and I want to chat about it and then those are
some great business development financial books that can kind of get you
started if you are in a time crunch and you want to hit the ground running we
have a couple of courses one is accounting for Shopify and one is
accounting for Amazon which you can link to down below in the description and
that should show you beginning to end kind of how to handle the accounting for
these complex channels and if you have not subscribed yet please subscribe to
my youtube channel we've got lots more business development topics coming up as
well as e-commerce and accounting so if any of that is of interest to you
please subscribe so you can be notified when we've gotten new videos which come
out every Tuesday and Saturday thanks bye