Welcome back to the eCommerce Maven Podcast! I am so excited to talk about all things ecommerce inventory and finances with Alyssa Lang. Alyssa is the owner and founder of Magnetic Bookkeeping and Consulting, as well as Workflow Queen where she helps accountants and bookkeepers break down tech and automation to run their business with ease. You’ll learn valuable lessons about inventory, cashflow, when to hire a bookkeeper, and how to stay on top of your business’s finances.
Listen below, or find the episode on Apple Podcasts or Spotify.
Introduction
- Business documentation and information is key
- Having records of everything can help tackle inventory
- When starting a business, immediately separate personal and business finances
Cash Flow and Inventory Strategies
- Don't over buy
- If inventory is sitting on your shelf for over 90 days, take the time to reevaluate, including profitability of your business, why customers come to you, and if you are over purchasing
- Using features in platforms like Shopify or Etsy can help entrepreneurs track their inventory, as well as a simple spreadsheet to frequently track inventory especially when selling products across various platforms
Establishing the Sweet Spot in Pricing
- Understand your gross profit margins: You need to have a healthy profit margin or your business will tank
- For every $1.00 that you spend, Alyssa recommends that you set aside at least 50% of it
- Consider time tracking in labor and see what products are being worked on and how much time they’re taking
- Understand how you can be more cost effective
- Cutting down on marketing, elements that may not always be necessary, and taking a look at other shipping options can ultimately help you save you money
When Entrepreneurs Should Consider Hiring a Bookkeeper
- The most standard benchmark in the industry is 100K in a year, immediately consider getting a bookkeeper (since eCommerce has a lot of moving parts, it may be a bit different)
- Consider having someone maintain the connections between softwares and ensuring that data is being pulled correctly into your accounting systems prior to hiring a bookkeeper
- Whoever you choose to work with as a bookkeeper is dependent on the stage of your business
- A full team of bookkeepers can ensure there’s always someone taking care of your finances
Techniques for Managing your Cash Flow
- Looking at the costs coming in expense wise and what's coming out is called the balance sheet
- When looking at a glance at your bank account, you're not seeing the future projected expenses, whether they're variable or they're fixed expenses
- There are various tech tools that can automate this process, but manual overviews and tracking is also key
Key Takeaways
- Create separate bank accounts for personal and business finances
- For every $1.00 you bring in, make sure that you're allocating a certain percentage of that into your business account
- Read Profit First by Mike McCallum and implement the strategies
- Peel back the most important part of your business which is the health of your business financially before anything else otherwise you are not keeping your business alive
- Invest in elements to keep the business alive and healthy and hire the right experts who understand
Got any questions about what we covered in this episode? DM me on Instagram at @kristisoomer or tag me in a story and I'll get back to you with suggestions!
Tune in next time for more tips and strategies to grow your eCommerce business and make sure you’re following the eCommerce Maven Podcast on your favourite podcast platform.
Don't forget to subscribe-rate-review. It's super easy and helps me to reach MORE eCommerce mavens just like you.
Where to find Alyssa:
- @magneticbookkeeping
- www.magneticbookkeeping.com (book a FREE consult call here)
- @workflowqueen
- www.workflowqueen.com (book a FREE diagnostic review of your books here)
Let’s stay in touch:
- Connect with me on Twitter, YouTube, LinkedIn, Pinterest, and Instagram.
- Learn more about my story on my website.
- What's holding YOU back from $25k months in your online store? Take my FREE quiz and find out.
- Take my online courses and let’s grow your impact and income.
- Join our FREE Facebook group for eCommerce store owners.
- Get on my bi-weekly newsletter for updates, new events and workshops