It’s almost Go Time for ecommerce businesses. Q3 is turning the corner into Q4, which means holiday sales and end-of-year crunch time is fast approaching. Before you put your head down and try to make it through, let’s do a quick check up on you and your business.
How is your gross margin?
Are you making at least 30 percent on your product sales? If not, it is likely that you are not making enough to keep cash flowing in your business. You may be having to borrow money to make your next inventory purchase or perhaps you’re not paying yourself. Sound familiar
For your business to be sustainable, you have to clear enough after you pay for products to be able to afford advertising, pay yourself, pay your taxes, and other operating expenses. Don’t go into Q4 with margins so thin that you are working for nothing or worse, working to pay down debt.
Take a few minutes now to understand where your margin issue is coming from and work to get that percentage up. Some typical responses that will improve your margin are: increase prices, reduce your costs, vary your product mix so that you no longer sell products that don’t meet the 30 percent target.
How is your time?
Are you stretched too thin? Just like thin margins, you can find yourself in a situation where there isn’t enough of you to go around. If that’s the case, make sure that your gross margins are adequate so you can afford to hire a team member to assist you. You can also look at your tasks and trash any that aren’t really critical to the business.
Another tactic is to identify three main areas of focus. Concentrate on these three areas and let other activities slide for the next three months. Too often we rob our businesses by doing mediocre work. We go around putting Band-Aids on things and never really making the improvement that is needed to move the business forward.
Rather than trying to do everything “just enough”, endeavor to do three things fully and with excellence. Then, next quarter, you can pick three new areas of focus. In one to two years, you will have really improved all of your systems and it will be time to refresh those that you started with.
How is your energy?
Do you leap out of bed looking forward to the day ahead? Or do you pull the covers over your head dreading the day and the issues that are going to be in your email inbox? We can’t manufacture time, but we can protect and stretch it. The way I do that is by ensuring that I’m working from a place that fills my soul.
For me, it’s gardening or painting abstract landscapes. I spend a few minutes every day doing the things I love and it gives me the energy and the inspiration to do the work that is hard. Being an entrepreneur is hard!
You must find things that allow you to connect with yourself and to blow off stress. Once you add those things into your life as if they were the most important “to do’s” (uh hum, they really are) then the time bends and your energy expands and the days just go smoother.
Time to Get Busy
Now you’re about to go into the busy season. What is your biggest resource issue? Money, time, energy? Pick one to focus on for the next quarter and let me know how you plan to improve it in the next three months. I’d love to hear about your plans and any area where you’re struggling. Reach out to me at email@example.com and I promise I’ll get back to you with some suggestions!
Interested in Profit First?
If your ecommerce business isn’t where you’d like it to be in terms of profitability, check out my book, Profit First for Ecommerce Sellers. It answers important questions about how to implement Profit First in an ecommerce business. Take control of your money and your business, and put Profit First to work for you!
You can also sign up for the Profit First for Ecommerce Sellers Online Course. As a Mastery Level, Certified Profit First Professional, I will teach you why Profit First works so well for ecommerce businesses and the particular challenges for businesses that have physical products requiring inventory management. You will learn how your behavior drives your money management habits for your business and how you can set up your business bank accounts to work with your habits.
Check out all our ecommerce accounting and profit advising services here!
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