Scott Scharf 28:01
Yeah, so start now, even if you’re not planning on selling for two or three years, okay, work on your financials, make sure your business is as structured and efficient. So all the great decisions to make you profit out of the business are the same. So those same decisions are there. And then talk to a broker now talk to a broker now talk to them once a year, every six months, so that you understand what those buyers are looking at, and that you can make some adjustments, not major ones, but minor ones to what you’re doing so that you understand I’m a big believer in having a hit by a bus and doing anything possible to deal with Murphy, having insurance and the other pieces. But that same hit by a bus if something happened to me, I got sick, which lots of people are getting sick this year. What would I do? How do I preserve all this time and effort and equity and capital that I’ve thrown into this business? How do I make sure that that something positive happens with that if something happens to you that you could sell the business and that you’ve already got a plan and at least a business card for your founder, your partners or your spouse or whoever to sell your viable business versus it just imploding when you’re not there. So it’s it’s more planning those things and taking that step back of really evaluating where you are working on you’re hit by a bus, but go talk to a broker and understand if that makes
James Thomson 29:21
a priority? How long does it take to get your numbers in order and start doing some of these little course corrections? You talked about, you know, 18, 24 months? Realistically, if that is gonna apply to most companies that well, that’s been taken accounting as a, I’m sure it’s got.
Scott Scharf 29:38
Sorry, me too. Sorry. So that’s kind of how long your timeline for selling is. So in general, if we’re experts, we onboard multiple clients. Every month, we hold our accounting data and clean all the time I talked to somebody, it’s about 90 days. So our onboarding is about a month but there’s a decision and back and forth and whatever else. So our onboarding takes About four weeks to clean up a year on multiple camping. And we rerun it all from scratch, almost nobody systems are clean enough for us to use their existing zero file or and we don’t use QBO, we convert people off QBO. So you’re looking at it, it’s probably, if you’re outsourcing it probably a 90 day project, if you decide to do it internally, it’s probably a six month project until you have all the processes and learn the basics to the point where you’re like, Oh, this is really working. You know, in an outsourced model and provide outsourced services, there’s kind of a peak right at the beginning for the first week or two for the owners, and then they get a ton of time back. And then after whatever timeframe now make it clear, they’re 100% responsible for the success of an outsourcing relationship, or converting your accounting or working with, you know, firebox experts or whoever else, that they have to stay plugged in as the owner project lead, overseeing what’s going on, but they sure don’t have to do all the work, they don’t have to become an accounting expert then have to learn zero or QBO. There are people who can hire whether it’s companies like ours, or virtual assistants, or hire local staff, if you want somebody that you can, you know, see in person which doesn’t happen which is less of a key thing today. Those are really the key things to work on.
James Thomson 31:19
It’s fun listening to talk about the stuff, Scott because it rolls right off your tongue. I mean, you’ve seen you’ve seen these stories play out over and over and over again. Tell me a little bit about was there a turning point for you when you realized I’m good at working with brands and helping them think through? Not just the accounting portion? But what to make of the numbers and how to help them think about growth? By leveraging the data? Was it there? Was there a moment where you said, Yeah, you know, I have a business, but I think I think this was fun. I think I’m gonna keep doing this.
Scott Scharf 31:53
Yeah. So I mean, you can’t be as lucky as I am and marry an accountant. So I knew some about accounting, I had looked at financials I had been responsible for, you know, the EBIT up for different things that I had done and whatever else over time, but there’s a really big difference in the fact that we run our business. So you know, Patty’s, our CEO, and CFO and presents me the financials, not only for our business, but also personally in Xero. And the same thing. That our first client in January of 2012, was an Amazon seller. Okay. And so, if we looked and I went, Wow, this is really complex. There’s a lot of data, it’s dynamically changing. Now, I still think and I don’t know what your number is, but I think it’s at least 10 or 20 times harder to sell on Amazon than it was way back then. You know, for the people that caught on and realize they could do it, you know, they really did really well, for a number of years, they’re sure, they’ll do well on it now. And so we looked at it. And at the beginning, we took on a few clients, that local Chamber of Commerce and other stuff, but we always knew we’d pick a niche. And when we decided to be 100%, about a year and a half in 100%, e-commerce, it just freed us up to focus, like, Look, this is what we do. These are the sellers, we talked to enough to talk to a restaurant or a nonprofit or anybody else is that focus. And then the big learning piece for me is you just do the same thing, no matter whether it’s boring or not. It’s you having the same conversation, you did your presentation at the beginning of this and you say that all the time. And that’s the exact same thing you’ve probably said for years. And that’s where the real value is. And then it turns out that you can start to get those benefits where it’s easier on you, it’s easier to remember you can be more focused on your marketing, your communication, and the value you provide. And then you have less to deal with as an entrepreneur and you can, you know, take a break and read a book and know that you don’t have 5 million things to do, just 2 million because you’re an entrepreneur. So I mean that it was really that focusing on the niche and there’s riches in the niches Same thing for e-commerce sellers, you know, trying to do the scattered shotgun approach on 20 different categories of products and whatever else is distracting the more you narrow things down even though it’s scary for most people, the better off you’ll be.
James Thomson 34:10
Let me let me wrap up our conversation by asking you a very open ended question. What advice gathered from all of your experience working with all the types of e-commerce brands you work with? What advice would you give to an online brand that’s looking to build a successful Amazon business?
Scott Scharf 34:33
Try not to repeat what I’ve already said. He
James Thomson 34:36
talked he talked extensively about know your cash flow,
Scott Scharf 34:38
I get that I mean it. So you got to focus on bills working on your business and yourself as an entrepreneur. So I’m a huge Simon Sinek fan. I’ve got The Infinite Game and you know, Leaders Eat Last and a bunch of other stuff that you have to make the time to focus on becoming a better leader, a better entrepreneur. newer and better understanding your business, Patti and I’ve been doing there’s a great book called Traction that’s part of EOS entrepreneurial operating system. So what I would say is most sellers haven’t run a business, or they worked in finance for a big company. But a bunch of other people did all the finance and accounting and bookkeeping. For they haven’t built and sold three or four businesses and gone through it, some of some e-commerce sellers are and they’ve done this over and over, and they’ve done the startup thing, but most haven’t. And things like the entrepreneurial operating system provides a structure to provide focus for somebody with the ideas and popping all over to really be able to focus on the business. And so we’re actually tuning up how we’re using EOS internally, to make us more efficient. And so that’s really, it’s that it’s making sure you don’t get like I said before sucked into the doing the work in the business, you have to make it because that’s the only way to make sure that the business is going where you want it to and you don’t open your eyes six months later and go, Oh, Hmm, what happened when we were selling whatever. And now we’re selling a completely different product, how that happened over the last six months, and it could be you pivoted because of COVID, you had products that didn’t sell in a lockdown. And now you do. But if you’re not paying attention, and that’s probably the biggest thing, it’s just really hard to take a step back and get perspective.
James Thomson 36:25
Let me push back just a little bit here. Having been a small business owner selling products on Amazon, one of the things that benefitted me the most was to actually get my hands dirty and understand all the day to day stuff. And once you’re in the dirt, and you’re dealing with all this stuff, how do you extract yourself so that you can work on the business, because the reality is, even if I hire somebody do this and that on terms of the day to day stuff I need, I need to continue to have some pulse of what’s happening day to day to be able to then extrapolate and look at the big picture.
Scott Scharf 37:00
That’s a great point. So I do think every seller, no matter what you like or dislike should wear every hat in the business, packaging, shipping accounting, bookkeeping, like you need to wear every hat long enough, even if you hate it, or you don’t have the skills for it, to have an understanding of what’s going on. And when I say pulling that out, you might only need it if you’re really efficient 5% of your time to work on the business. And you can spend the rest working in the business because what happens is most sellers and most entrepreneurs and hiring people to do the stuff they don’t like like accounting and sales tax, and maybe operations or shipping or whatever else. And then if they don’t like marketing, they hire a marketing company or a marketing person. And then they gravitate. The promise is when they spend 100% of their time doing that thing, whether it’s product design, or purchasing or you know, running their Amazon store or whatever else. But in general, I would say you probably need to stand if you’re not spending any time, you need to figure out how to get a third of your time available to work on the business, okay, and then then you can spend the rest of your time doing all those things where you have to jump in and help and you have a huge order and everybody all hands on deck, that’s great. And then as you get more efficient with your time, you can get that down to a quarter or 20%, or somewhere between five and 10% of the time has to be worked on the business. Or if you’re really efficient about hiring those outsourcers and you have ways to monitor what they’re doing, whether it’s an internal staff person or an app external efficiently, then you get more and more time and you can spend less time working in the business. And then you can just pick and choose and go this week, I’m going to do marketing. And you know, next month I’m going to do product design or design a product. But if you don’t block out and lock out that time to go for a walk and think and everything else, you can’t do it but it’s really hard to make that shift to go Wait, I don’t have a third of my time, that would be even less sleep. You know, start with 5% and then add another five and then another five and go look every morning from six to seven after my workout. I only work on the business and plans and then you throw yourself into the rest of the business but you have to make those calls.
James Thomson 39:11
Scott, I want to thank you for joining us today on our podcast. For those listeners interested in learning more about Scott’s organization, please visit catchingclouds.net. Thank you and we’ll see you again on the next podcast. And now to finish today’s podcast, I’d like to share some final thoughts. For third party sellers to be successful on Amazon, a critical level will be soliciting feedback from customers. We at Buy Box Experts are really big fans of the team at eComEngine and it’s tools that help Amazon sellers to simplify the process of messaging customers of Amazon orders. To learn more go to ecomengine.com. And with that, I want to thank you for listening today and I look forward to joining you next time on the Buy Box Experts Podcast.
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