When an entrepreneur decides to buy a website, populate it with interesting products and/or content, and attempt to sell items or services from it, they never go into at less than 100% enthusiasm. Unfortunately, because entrepreneurs are merely human, that 100% enthusiasm can sometimes wane. The important thing is to be open to new ideas, research ways to help yourself succeed, and always remember why you got into the game to begin with – it could be for the fun of it, to be able to work for yourself someday, you have a passion for the niche, or you simply want an additional way to bring in income. Whatever the reason, there are five things to remember that most entrepreneurs will learn through experience, but because you fell upon this blog post, you’ll learn them right up front.
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Financial management may not be the most attractive aspect of operating an eCommerce business, but it’s absolutely essential.
One reason why it’s so necessary: because as eCommerce companies grow and get more successful, their finances become more complex. Suddenly you’re dealing with a host of issues that include:
That’s a lot of money movements that not only need to be properly managed but also reported to tax authorities. That’s why all eCommerce companies need a strong accounting system in place. Otherwise, your financial data can leave you feeling overwhelmed.
eCommerce accounting is crucial to your long-term success, and this aspect of financial management is different from bookkeeping.
Bookkeeping is a baseline accounting practice where companies maintain clean records dealing with their financial documents and sales/business transactions. Bookkeeping tasks include invoicing, preparing balance sheets, payroll management and accounts payable.
Accounting involves analyzing the financial records prepared by the bookkeeper, which are used to create financial reports, business models, and sales forecasts. This kind of financial management is about not just your current finances, but your plans and projections for the future. The goal is to help you make smarter business decisions.
There are two main types of accounting for eCommerce companies. One of the most popular is Cash Basis accounting, meaning you add a new record whenever the cash is transferred to your bank account, and when it exits your bank account as an expense. All transactional data then gets stored across your payment methods and bank accounts.
This is often the preferred accounting method for starter businesses and smaller eCommerce companies since it’s a simple system to maintain. The only thing you need to do is report on all money movements once they happen. You know much cash is at your disposal. This is a popular option for small eCommerce shops, products-on-demand stores, Amazon FBA stores, and DropShipping operations.
For larger eCommerce companies, Accrual Accounting may be the preferred method. Here you record each sale or expense that takes place, regardless of when the money comes in and out of your bank account.
Considered the more traditional accounting method, this is the system most financial institutions use. That includes:
Smaller businesses may find this approach more confusing since it involves listing money you haven’t earned yet (for account receivables) and subtracting costs you haven’t yet been charged with (account payables).
However, larger companies believe this method gives them a more realistic representation of their business income on a monthly basis and helps them make more accurate financial projections.
It’s been said we now operate in a “distraction economy,” where businesses are bombarded daily by emails, text messages, social media responses, and so on. This has made it harder than ever for entrepreneurs operating eCommerce shops to set their daily priorities. The flood of “urgent” messages and notifications seems never-ending.
What many business owners are turning to today is Time management templates to establish some smart order to their daily routines. Establishing time management strategies enables you to focus on the tasks most relevant to your long-term success.
So, what is time management?
Time management is about:
A key factor in time management is establishing some boundaries between work and personal time. It’s about getting your most important tasks done first and identifying the work that can be done later. This is going to reduce stress and keep you from feeling like all you do is put out fires all day. It can help prevent burnout.
So, consider implementing a goal-oriented time management strategy, starting with breaking down large tasks into smaller ones.
Anyone who runs an eCommerce shop knows they’re operating in a highly competitive market. That’s no revelation.
But you still have the challenge of setting your business apart from competitors. Challenging, perhaps, but there are ways to successfully market your business in a competitive market.
A good place to start is by creating a USP.
Your unique selling proposition is the model for helping your company stand out. It highlights the benefits customers get from shopping at your store that isn’t available from your competitors. It plays up your company’s strengths and how your business is fully aware of what its customers cares about.
Next, do a Competitive analysis, which will assist you in finding ways to stand out among your customer demographics. The analysis can also give you a sharper sense of what gaps there may be in the market that you can fill.
The competitive analysis should include:
Your direct competitors offer roughly the same types of products and services that you do, and operate in the same niche space. It’s important to know who they are and how they operate, which is why you should be evaluating their products, marketing tactics, and pricing.
As you make comparisons between their business model and yours, identify what differentiates your company and what gaps in the market your competitors have.
Additional ways to manage market competition, include:
Entrepreneurs have a lot of challenges and hurdles to overcome. One of their main tasks turns into becoming a problem solver, and even having the ability to anticipate problems that could arise. It’s never easy.
Still, even the most successful entrepreneurs have faced their share of challenges – and overcome them.
The most important thing you’ve ever done is take that first leap by starting your own business. Whether you launched your own website or purchased an existing online company for sale, you made that all-crucial first step and now can chart your own financial destiny. Congratulations.
It’s important to keep in mind that some of the most successful billion-dollar startups were launched during very turbulent economic times, including recessions. The old saying that timing is everything isn’t always accurate. Sometimes it’s more about the effort you put into making the business succeed.
Top of Form
Bottom of Form
StillStillStill, overnight success is rare and it’s far more likely that it will take some time to build up your sales more gradually. But knowing the challenges that entrepreneurs often face is a good place to start. Most entrepreneurs quit long before their business picks up, but you don’t have to be one of them.
One of the most common challenges entrepreneurs face is a cash flow shortage. New business failures are often related to cash flow management.
There’s always the risk that without proper planning for your cash flow, a new business can go broke in the first month. You may have ordered too much inventory that doesn’t sell or have accepted a large number of orders that you can’t fulfill, or have expenses that you can’t cover.
Start by recognizing your cash flow needs and projections, and ensure you have financial reserves on hand or an emergency line of credit. Start with more funding than you think you’ll need.
Time management is another key challenge. Solo entrepreneurs end up wearing a lot of hats and can take on more tasks than they ever imagined. Figure out how best to manage your time, and which tasks are most urgent.
Additional familiar challenges that entrepreneurs face include:
Even if you have a successful product, that’s not a guarantee that your company will survive. Studies indicate that 80% of companies still fail despite initially having successful products.
That’s why you constantly need to focus on scaling your business. That means having the right strategy in place to attract new customers, promote upsells, and send profits higher.
Successful scaling involves a long-term, sustainable strategy regardless of the size of your company. How can you scale a business? Top methods include:
It’s important to remember there’s a difference between growing your business and scaling it. They are similar, but not interchangeable, terms.
When you grow your business, you’re increasing revenue as your business adds resources (new employees, new technology, expanded capital). Scaling is about identifying ways to grow more efficiently. That’s why scaling a business requires strategic planning, and why you need to be setting goals to accomplish this task.
You want to start by defining what you want to accomplish, establishing the criteria for measuring its process, and setting attainable goals.
With so much responsibility when it comes to managing your own online business, a lot of entrepreneurs feel like work has taken over your lives. It can be exhausting, physically and mentally.
But there are proven ways to boost your work-life balance, which is crucial to your long-term success.
You could find yourself facing an excessive workload, which can lead to difficulty disconnecting from work after hours as you shift into your personal time. That’s why it’s important to focus on achieving a work-life balance.
Work-life balance means the balancing act between your professional responsibilities and things you do after hours. It means finding ways to fulfill the obligations of your business but still prioritize your health and family needs.
Otherwise, you’re a good candidate for burnout.
To avoid this, you should consider:
Find the balance that works for you when it comes to the number of hours you spend on your job vs the number of hours you spend doing something you truly enjoy. Both are important.
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