People often don’t realize that the lifecycle of a business involves so much more than deciding on a product, selling it, and then repeating. In reality, your business will go through a handful of phases from start to finish. You will have to make decisions in each phase, big and small. For this reason, it’s easy to understand why business owners quickly feel overwhelmed as their business progresses.
Over the next several weeks, we will be writing a new bookskeep blog series we’re calling SmartCFO. It’s designed to relieve some of the confusion and stress that comes with making business decisions, from the beginning to the end. In the SmartCFO series, each phase of the business lifecycle will be covered so you are prepared when it’s time for your business to progress to the next level. SmartCFO will walk you through the basic business setup, creating a strong foundation, growing into your success, and then even making your exit, when the time is right.
We have mapped out four stages of the business cycle, from just starting out to selling a business. For this reason, SmartCFO will have something for everyone, no matter what stage you find your business to be in. Each week in this series, we will go over a phase of the lifecycle and important components you should consider in each.
Here’s a sneak peek of what you can expect-
Initial Business Setup
When first starting out, it’s important to set your business up for success from the beginning. In this stage we will discuss:
Business Structure & Taxes – Understanding state requirements, deciding on a corporate structure, and setting up sales tax
Sales & Expenses – Setting up sales channels and payment processing, understanding financing and scheduling details, and deciding on a fulfillment method
Tools & Systems – Inventory tracking and accounting systems, password management, and payroll decisions
Team Members – Choosing an accountant/CPA, contractors, and investors
Getting the Wheels Turning
After your initial setup is complete, it’s time to start laying the foundation for future success. Here, we’ll talk about:
Financial Data & Cash Management – Understanding margins and long-term debt options, financial statements, and bill pay support
People & Process – Upgrading software systems, choosing software integrations, hiring employees, and payroll
Inventory – Negotiating with suppliers, understanding portfolio margin and mix, and dealing with returns
Growing the Business
Now that you’re on the right track and gaining momentum, it’s time to invest in areas that need to expand. In this stage, we’ll break down:
People – More delegation, creating a business plan, discussing mission values, and time management
Process – Payroll and personal benefits, building out systems and documentation, and upgrading inventory management
Finances – Budgeting, cash flow forecasting, understanding ad cost and performance, and portfolio/product margin analysis plans
Planning – benchmarking within the industry, implementing metrics dashboards, and having impartial advisors
Selling the Business
When you are ready to take your exit after building your success, there are several things to be considered. Here, we will explain:
Prepare – Understanding market trends, understanding when to sell, how to structure books for sale, and legal advice
Explore – Sales price evaluation, tax and debt coverage from sales proceeds, and presenting to prospective buyers
The Sale – Employee/contractor transitions, ownership transfer, and system/software transitions
Wherever you are in the business lifecycle, SmartCFO will be able to help! Stay tuned for the first blog of the series next week on starting the business setup process, where we’ll discuss in depth all the moving pieces and decisions to make when starting your business.
As always, we would love to help you. If you need Profit First coaching, help with the books, or just have questions, reach out to our wonderful bookskeep team today!
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!