Setting Up for Profitable Success with Tyler Jefcoat, Ep. #160

Speaker A: Foreign.

Speaker B: You are listening to the Maximizing E Commerce podcast, helping you build an E Commerce business you can be proud of. And now your host, Kevin Sanderson.

Speaker C: All right, so as, uh, we are starting a new year, closing out a year, it's important, important to understand the financials of where are you and where are you going? And so to talk about some tips to make sure that there is much money in your pocket left over after all of that, uh, I'm excited to bring on Tyler Jeffcoat from Seller Accountant. So Tyler, thank you for joining us on the Maximizing E Commerce podcast.

Speaker A: Kevin. It is great to be here, buddy. I hope, uh, the end of your year has been awesome, getting into 2023 here.

Speaker C: Yeah. So as we were recording this, it's the end of 2022. It's not yet Christmas, although this will come out when it's, uh, not yet New Year's. So depending on when people are, uh, watching or listening to this, well, I guess really not have much of a bearing on what they're really going to take out of this conversation. But I do think it's always important to kind of have an understanding of where are we now, where have we been and where are we going? So let's just start off with real quick for, uh, those maybe who heard when you were on this show before, maybe they've heard your background before. But those who are not familiar, uh, tell us a little bit about yourself, Tyler.

Speaker A: Yeah, thanks, Kevin. So I own an accounting firm that just helps E Commerce brands called Seller Accountant. I sold a seven, uh, figure health care business and then started this one. And I lead a kind of an elite Mastermind for there's 14 of us now in the group that are e commerce CEOs that are seven and eight figures. And so I guess my primary job, kind of day to day day job, is that I'm the CFO for a big pile of brands. And then my team does a lot of bookkeeping. And so I think in terms of like kind of where we are, um, I mean it has just been a tough year. I was meeting with some CEOs this morning, Kevin, and there's just kind of a collective like, oh man, this has just been challenging. And, uh, we had some bullish years in 2020 and 2021. And the kind of mounting pressure on all sides from our suppliers and Amazon fees and then the increased PPC cost have just left a lot of sellers really weary here at the end of 2022, kind of coming into the beginning of 2023. And so I just empathize because actually I don't. I'm sure this is true for you. I know you're a seller, Kevin, but you also have a, an agency business. Like, we feel this too, by the way. Like, this has been just a whoa kind of year and so kind of time to get to kind of etch a sketch a little bit and get refocused going into 2023.

Speaker C: Yeah. And I, um, I, you know, as you said, I'm a seller and I help people expand into international markets and do, um, training and learning events. And so I, I hear a lot of, and I see it myself, a lot of the concerns people have with life and business. And you know, the reality is, as we all know, is sometimes we all get caught up in today's minutia and we forget about how bad we complained about things two, three years ago and we have sometimes fonder memories than we should of the past. And you know, the reality is, you know, people have been complaining about selling on Amazon for this since they've been selling on Amazon. And one thing I will say is pick whatever insurance company you watch commercials for. I don't want to say names because, you know, they have big lawyer budgets. Um, but pick, pick whatever. I guarantee you if you start looking up like people who sell X brand of insurance, they all have complaints about it. If you pick fast food restaurants, the franchisees of those fast food restaurants all have super complaints about that. And MLM Network marketing, they all have complaints about the company they work for. Everyone has complaints when they're downstream of someone else, but some of it is also warranted. But you can't really complain your way out of a problem. You got to figure out what is the issue and then how to fix it. So what are the issues you're seeing today and you're hearing from people in the Amazon ecosystem?

Speaker A: Well, I think there's the, there are small issues and big issues. So the kind of little eye issues are things like, wow, inbound freight is getting more expensive, uh, especially in the fourth quarter because Amazon sellers, especially some of the larger ones, used to be able to just send all of their goods to one fulfillment center and Amazon would kind of foot the bill of then spreading it out across the nation. And we're starting to see increased pushback from Amazon on that. So that's a, that's, I mean, that's a couple of points on someone's P L that Amazon is now making you increase your shipping cost in, uh, another little eye problem. I think anytime you have any Any amount of recessionary pressure, you just pay more in advertising because there's more ad dollars competing for the same buyers. Right. And so unless you're really savvy, it's easier to waste ad dollars now than I think it was two years ago or, uh, for sure four years ago. And so then I think there's like the bigger I issue, which is do I really know how profitable my brand is? Like, do I really know? Or do I go to like the conference in whatever city I go to the conference in? And I love talking about the sales. Had a seven figure year, Kevin. But then you start talking about profit.

Speaker C: Right. I had an eight figure cost.

Speaker A: People get really quiet. Right. And so I think that's the bigger issue is, okay, you know what, to your point, it's time to be an adult in the way we run our business. And great news. I have great news for anyone that's listening to this. Almost all meaningful wealth transfer happens in a recession. In other words, every CEO makes money in a bull market. They couldn't screw it up, you know, if you had a product that was favored by the pandemic. But the best execution CEOs have a real competitive advantage in a bear market because others are going to quit and not everyone's going to get on board and execute well. And so I think that's where I'm with you in that. Okay, we got the issues, they're big. We need to understand what our business is actually doing, have a real plan for moving forward, and then obsess over executing because we have a chance to actually win right now during the market. While it's kind of weird. Yeah.

Speaker C: And I always had heard the story about Conrad Hilton, the founder of Hilton Hotels. The reason you still know of Hilton Hotels was because, what, 90 years ago during the Great Depression, he was savvy about doing things a little differently in the hotel business than what everyone else was doing. And he just started eating up other hotels and buying them out and running them a little bit differently than what everyone else was saying was the standard way of doing things. So sometimes you have to zig when others are zagging. And I, I've had an interesting couple years. I sell a lot of giftable products and I was finding during COVID when everyone else was buying, you know, home improvement stuff and kitchen stuff because they're at home, more, uh, giftable items, it's like their friends were out of sight, out of mind. So. So my sales were not doing well and they've been doing better now. I've Also launched a lot of new SKUs. But oddly enough, I have found that I am less aggressive than I've been in PPC in the past. I'm actually doing better acos wise. So not to get too deep in the leads on specifics, but I do think if we just think about things differently than maybe we had before, we can get better results. Maybe even that we've had before.

Speaker A: Well, just to dig in, because, uh, again, we're touching on your expertise here. We had this debate in my Mastermind meeting this morning about, uh, the question would be kind of this. Oh, I'm like, I'm organically ranked really high for product A, and I really feel like I need to keep the pedal on the metal with my PPC to protect that ranking. And so that was maybe half of the room. And the other half of the room, Kevin, was like, what you just said, which is, wait a minute, guys, the rules of the game are changing a little bit. Um, we may have to retrench and not do more, but do do less better. And I'm just curious, like, is like, what. Like, would you kind of talk more about that shift in your mindset or what tactically you did to kind of navigate that? Because I feel like that's more. That's the problem that all of our clients have that I'm a little bit less of an expert at than really you are.

Speaker C: Really. When we break it down in any business, you're putting dollars in and you're hoping to get more dollars out on the other side. And so the way I've been trying to look at it is we've been conditioning ourselves so much about hero products over the years, but at the end of the day, sometimes I've just been going wider, and this is counterintuitive to what everyone else is doing, whereas how can I take maybe similar product? An example I've used sometimes is I've got two signs here in my office. Now, these, I couldn't sell these because this is intellectual property owned by Walt Disney company. But I bought these at Disney. And they're basically the same sign or the same sign holder, the same shape, which is a different message and different design on two sides. I'm not selling signs, I'm not selling tumblers. But I'm holding a Tumblr here, too, that says world or says, uh, best dad ever. Because it's true, I am the best dad ever. And Tyler's number two. No. Uh, but there we go. There's. You know, if I was selling tumblers, I could make different designs on tumblers and sell them, for example. And finding ways that you could start just repurposing the same product as a different listing that serves a different audience is kind of where I'm getting at. And I think doing more things like that than trying to rank number one for a product that sells, you know, 40, 50 units a day because everyone else is going for that. And I think the, what's helped people over the years is as the platform has grown there's been more opportunities for those type of products. But as growth starts to slow down, there's less of those available and there's more and more savvy sellers going after those. And so that's, that's my two cents.

Speaker A: I love it. And I think that's extremely well said Kevin and I. Just to our, our listeners or watchers, I just want to encourage you like uh, again there, there is a valid, there could be a valid business case made for. I know I'm going to maybe break even or lose money in the short run to get a product to a certain level or to maintain a certain ranking. I'm not saying that there isn't potentially a business case for that.

Speaker C: Sure.

Speaker A: I think what Kevin and I are saying is make sure that you measure ROI like this. That's what you're talking M about. Like M inputs in, we want outputs to come out. And if I'm going to say, let's say for instance that my projected advertising strategy is going to cost me 100 grand over the next year, let's just say like for round numbers, I need to be convinced that I can get what I believe is a reasonable return. Again this is to your simple illustration. If I put money in, I want resources to come out. And so the. I feel like the definition of insanity for an Amazon seller right now is to lose that hundred grand because you're hoping and praying that things will somehow get better in the future without actually having a plan and something to think about creatively. Here is if it turns and make sure you made my point is look at all your plans. So plan A could be PPC on my hero. Plan B could be influencers or trying to figure out TikTok or trying to get more of a direct to consumer or expanding internationally. Mhm. And the point is, is that we need to weigh all of our potential investments and treat that 100 grand as an investment which means we have to hold it accountable for giving us some benefit even if it's a little bit later. And so I think as long as our listeners out there, take the time to think, okay, you know what? No, no, I'm doing this on purpose. I'm going to burn that 100k because I know it's going to get me where I want to go. But here's how I exactly define that. It's going to get me an extra $600,000 in revenue, and it's going to put me in this position. And so if you get more specific, then you can set yourself triggers. And what I mean by that is that you could check in in 90 days and say, hey, am I on track for this to give me the ROI I want it to give me. And if the answer is no, it might be time to pivot. And so you don't lose all of that $100,000, you can redeploy those assets somewhere else. And so I think this is just a time to be really intentional. Like you said, I want to be really focused and intentional with my investments.

Speaker C: Yeah, exactly. It's your point, like, there are, there is a season at times to lose a little bit of money on the front end, and that's been in business for the longest time. You know, somebody opens a, uh, a store down the street, you know, they're discounting, they're running ads in the newspaper pre Internet days. You know, they're doing all these things to try to get people in the door to try to get their flywheel going. But at a certain point, you have to make the decision like, okay, do I continue doing the same thing over and over again? And I remember one time someone saying to me, you know, I have a really important keyword. And I've just learned that you're supposed to just keep spending money on an important keyword, but It's a, uh, 300% ACOS. I'm like, well, you need to stop spending money on that keyword because that, that's not working. You know, we have to remember, too, that sometimes it's not about what we think is relevant, but what customers are voting with their wallets. Because at the end of the day, it's, you have money coming in, money going out, and if you have less money coming in, then you have money going out, you have a problem. And then you also want to manage that you can maximize how much money you have left over after paying the money going out out. And so that becomes kind of a big equation, right?

Speaker A: It does. And, and that's like such a beautiful natural pivot to one of the next topics we were going to talk about, which is Do I know how profitable my business is or was in 2022? And guys, I just want to give you some another quick word of encouragement. Okay? Right now, as we enter the beginning of 2023 is probably not a great time to sell most Amazon businesses to investors. The markets are a little harder. But the good news is that means right now is the right time to make the right improvements in my business so that in a year or in two years, I can really capture maximum value. And one of those crucial investments that I need to make is I need to be able to put a, an amount. I need to know how much profit I made last month. I need to know how much profit I made last year. I need to have my kind of records tight. And so this is kind of a strategic time year to talk about this, Kevin, because your tax guy is going to start knocking on your door here pretty soon being like, hey bro, we need you to get us your stuff. Don't wait till the last minute, get it to us. And so, you know, make sure that you are doing your accounting correctly. Do a little bit more effort now and we can dig into this if you want to, Kevin. So that when it is time to sell in two years, your stuff is in such great shape that, okay, taxes are done, but more importantly, you can capture that maximum value when you sell the business.

Speaker C: Yeah, exactly. And one of the things too is when you're running a business, there's, we can get more into the weeds on this. There's so many more components that you're looking at than you are with your personal finances. A lot of times we come into this like, oh, okay, I have, you know, a job. I make this, my rent or mortgage is this car payments, this insurance is this food, is this clothes, whatever. And you got a budget and you have money left over. It's good challenge with a business is it's less cash even, even if you're using. I don't want to get too deep in the weeds. The technical cash basis versus accrual basis. But essentially, you know, you, it's a very cash basis way of accounting for personal finances and meaning, you know, you have money coming in and then you start spending the money. Whereas with your business you're spending money to make money later. Like, here we are, it's December and I'm going to be getting money back from Amazon. My biggest, uh, whatchamacallit, disbursement of the year will come soon. And that is for investments I made like over the summer, like in inventory and whatnot. So cash flow is a much different thing. So can you just quickly describe for folks the difference, because it's hard to conceptualize, even when you've been doing this for a while, how much different profit and loss is from cash flow. From an accounting standpoint, can you describe the difference?

Speaker A: Yeah, so there's like two concepts that are so important that you just mentioned, and one of them is I really, from an accounting standpoint, I really want to change my mindset to do my bookkeeping, my accounting correctly, which is called accrual accounting instead of cash basis. And it's funny, you're talking about, I made short term investments so I can get a bigger benefit later. I would rather pay a tiny bit more in taxes this year and get a 3x multiple on my exit two years from now. So you can't think about that. Would I rather save 30 cents today, or would I rather make $2 and 30 cents in two years on the same investment? Well, I maybe would rather prioritize my, um, my profitability in my books so that I can get a maximum exit. But then. So that's one thing I just want to. I want you guys to internalize that. This is not just about. It's not as simple as your CPA telling you, hey, great news, Kevin. You can save $1,000 on taxes this year. It's not that simple. You're having to juggle the value of my asset, my business, with that second thing you mentioned, Kevin, which is cash flow. Okay, but guess what, Tyler? I hear what you're saying. This is really cool. In three years, I get $2 and 30 cents. But what if I'm dead in two months because I run out of cash? Right? And so. So you're kind of juggling those two incentives to really try to prioritize profitability and clean books so that I could have an investor. Or by the way, even if you're not sell, SBA lenders are so picky right now. And so having your affairs in order and having them be clean really helps you get through due diligence, even for a loan. But to your point, I also need to make sure I have a clear handle on my cash cycle. Like you mentioned, your, your, um, Q4 hero products, you're gonna get a big disbursement from Amazon here in the next maybe week or so. Well, boy, you had to part with that money. You had to place that bet back in summer.

Speaker C: Damn.

Speaker A: And so I guess there's two parts of this. One is, guys, if we're in the Amazon selling Business or product? Business. We are in a capital heavy business like um, it's kind of sucks sometimes, but we have to buy the inventory in advance. And what I want to tell you is that your suppliers, you need to develop relationships with them so that you can try to get an extra week or two before you have to pay them. You got to find ways to stretch your dollar as far as you possibly can. And your job as a CEO of your company is to not neglect that. And I want to give you two practical things you could do. So two to do's for yourself is your New Year's resolutions, if you will. One, take at least one hour per month and invest in the relationship with your suppliers. M talk to them, don't wait until you're desperate for cash flow. Talk to them, get to know them now. Get to know what their needs are, understand what's driving their business so that if you had to ask them for an extra 30 days to pay them, they're going to give you the thumbs up and say totally cool. Got your back. Pay us when you can. And the second thing I want you to do, or maybe to resolve to do here is spend one hour a month investing in your banker relationships. Same kind of thing. The time to know your local banker is not when I'm out of cash tomorrow and Amazon lending just fell through and I can't get a loan. The time to know your local banker is today. So, so that you can cultivate that relationship and get that SBA loan or whatever lending is. And so if you guys are looking for a simple to do that, I guarantee you will unlock value for your business. One hour a month with my suppliers, you could probably do more than that. But one hour a month for my bankers and you are going to need cash, especially if the market continues to be bearish. And so Kevin, to your point, I don't want to run out of cash, but I need to be profitable and I need both. It's a both end and I'm going to have to really be intentional as a leader to make sure I've got the cash flow I need and that I'm making plenty of money so that I can stay upload.

Speaker C: Right, exactly. Because when you put the cash out and you don't get paid till later, that cycle can be what kills people. As Tony Robbins says, you know, you can grow yourself into bankruptcy, which is so true because if you just are spending all this money on, you know, more product and more whatever, you gotta be cognizant, uh, of okay, what's what's coming in or when you're making that decision. How aggressive do I keep spending on PPC on a particular keyword that's not making it for me. You also have to think about. It's not just, you know, hey, but I'm at the top of page one right now and I want to stay at Organic Rank. But is that preventing you from other opportunities because you're spending so much money on a keyword? And we don't have black and white answers here. That's the thing, is it's numbers. And a lot of this sounds like it'd be black and white, but it's a lot of gray. So it's really having a good understanding of how all these pieces of the puzzle fit one another. That to your point. You have a great point. Yeah, sorry, go ahead.

Speaker A: No, I was gonna say, like, you really make a good point there. That again, this is kind of back to your Should I fight to lower my ACOS or my tacos number or should I always have pedal to the metal, even if it's 300%, you know, ACOs or whatever?

Speaker C: Mhm.

Speaker A: And I think one of the most important exercises that a seller can go through as we kind of launch into 2023 is, is here's the question I have how much can I afford to grow without taking any additional debt on? And here's how you calculate this. My business makes some amount of profit.

Speaker C: Mhm.

Speaker A: But I've got to pay my suppliers. You know, mama's got to get paid. I need some money for the family and whatever. And I'm going to have some taxes and whatever's left in that projected cash flow generated from my business operations. Let's say that's a hundred thousand dollars per year. That gives me a hundred thousand dollars of free cash that I could potentially put into new inventory. So if my, if my, if my inventory, uh, amount right now is like, let's say it's like 100,000, that hundred thousand would give me the leash to double my inventory. Okay. That means I could afford to potentially double my business without having to get a loan. Right. And so my point is that if you do this exercise and you try to forecast out how much cash I'm going to have and the math doesn't work, you're like, oh, no, no, Tyler. I went to my mastermind and I told them I'm going to double in 2023. And I also promised that I'm not going to take any debt on because my spouse told me not to take Debt on. But, okay, that's great, Kevin. But when we look at your analysis here, it looks like you're going to need an extra 200 grand in working capital to pull this off. Just take the time to think through the numbers. And sometimes, Kevin, to your point, it actually might be more beneficial to take the foot off the accelerator a little bit, slow down that growth so that you can grow in a healthy way instead of in a stressful way.

Speaker C: Exactly, exactly. And if you have that understanding of what you need, then you can also start looking into, okay, debt is an option, but what are some of those other creative options, like you mentioned, like your suppliers? It's kind of an invisible debt. If you said to your supplier, hey, can I have net 30 terms or whatever, instead of paying when the, the boat leaves or something like that? Um, you know, that opens up some cash flow. Or if you're able to figure out a way to, you know, if your sales are down 20% on a product year over year, don't just keep ordering the same amount that you've been ordering in the past. Maybe start lessening. Because if you can carry less inventory, that's cash. Uh, the value of what's in a warehouse right now is cash. And so if you can take cash off the shelf without having to replenish the same amount, then you're. You're freeing up cash flow.

Speaker A: Bingo. That's a really important mindset shift you're talking about kind of focusing on cash flow is friends, just remember that every dollar you don't have stuck in your supply chain and deposits in transit inventory, and then the finished goods that are sitting in your warehouse, every dollar that you free up. And you can free it up in two different ways. Kevin just mentioned both of them. One is, I can get my supplier to let me pay him later. Or two, I can just have better inventory visibility where I carry less inventory. And if I accomplish either, or maybe some of both of those two, hey, buddy, can I pay you a month later? Also can I understand my top sellers and just order a little bit less if I can afford to do that? That's. Guys, you'd be shocked at how quickly that can improve the health of your business because now you've got that cash where you're not having to borrow it to do your PPC or you're not stressed out. Every entrepreneur in the world, Kevin, has had that, like 2:00am um, fetal position, cold sweats. Am I going to make payroll? Am I going to be able to pay that po. That stress anxiety, you know, Cortisone stress hormone goes down if I capture more of that cash and keep it in my business instead of it being stuck in inventory.

Speaker C: Yeah, absolutely, absolutely. And also, sometimes we also got to look at, like, can we change our model up a little bit? And so I'll use an example I've done. So I'm in a, uh, warehouse. It's not huge, but I've got, you know, offices in the front and, you know, warehouse in the back. Well, that freed up for me to not spend as much time with a 3PL. So I don't have a 3PL anymore. So what they were charging me to do some prep for products. Now I can do in house for much less expensive. I don't have to carry as much inventory because every prep center I've ever talked to says, oh, yeah, our turnaround time is two days and it's always two weeks. Now, somebody probably is listening to this and they know a prep center that's not like that or whatever. You know, I don't want to make, you know, blanket statements like that, but I have more control now. You know, I also, if I want to launch a new product using my model I was kind of mentioning earlier, I could theoretically say on Monday, I want to launch a new product and send it in that week to Amazon, you know, because I just take components, mix them up or whatever, change designs, and I can send it in quickly. So if you have ways of controlling more of the process and that eliminates some of your carrying costs for, you know, I just have to have more inventory because if it's in a 3 PL, I'm adding more days to that cycle of turning it around. Um, if I can lower the number of days it takes to turn around, that frees up some of what I need. So just think through everything in your supply chain. Where, where can you free some of that up? And even if it's going to take away some of the laptop, laptop lifestyle, maybe it's beneficial for some folks.

Speaker A: But that's a. You bring up a really good point there because I think, um, one of the mantras of Amazon sellers has been simple, simple laptop lifestyle. I want to not have any employees. I don't want to be encumbered. And the nice thing is that Amazon has made that really easy, especially with our agent supply partners. You could have a container arrive at the port and it either goes straight to Amazon or it goes to 3 PL for two weeks and then goes to Amazon. And I think to your point, there's a cost to outsourcing Just don't forget that you're having to pay to outsource those functions. And that if you can imagine, like a value chain of my raw materials to someone's manufacturing, to someone shipping it, someone storing it. And one potential creative idea, if the market's getting harder for you, is to pick. You don't want to pick five, but pick one or two of the little rings in that value chain and instead of paying to outsource it in house it, which is what you just described, Kevin. And so my advice is don't do like four or five of those. But maybe, you know, we talk a lot about traction here, Kevin. Pick one. Pick a rock, Pick one focus for the first half of the year and say, you know what? It looks like there's some cheap real estate in my little tiny town in rural Georgia, which is kind of where I live. Let me see if I could warehouse it more cheaply. There are now some baby boomer retirees that are looking to work 10 hours a week. I might be able to generate this value cheaper than Amazon's storage fees are now, or I might be able to do some kidding and add a value add where I can charge more for the product to capture m more margin. And so just don't bite off the entire elephant. But if you're feeling stressed because of margins, try to almost take a whiteboard and envision where is the value being generated for my customer and how much am I paying my various outsourced partners, from my PPC guy to Amazon themselves, to my warehouses, to my shipping people, and just see if there might be a creative way that you can grab some of that margin back and in house it, if you have the capacity to do that.

Speaker C: Exactly. And sometimes some of these ideas you can get from listening to other business owners that are in a similar industry, that are, if they're in a different, maybe similar type industry where they're putting dollars in and getting dollars out. You know, talk to them, see what they're doing. Because if, uh, if you're 100% listening to Amazon podcasts or e commerce podcasts, you're hearing a lot of the same ideas. And if you start hearing things of maybe how someone who has a dry cleaner runs things, you might say suddenly get an idea like it's not going to be exactly the same, but maybe there's something they're doing that I can employ in my business, you know, and people might think this is going to be weird, but maybe join your local chamber of commerce and just network with people to See, what are other business owners doing? The challenges that we have might be unique to Amazon, but they're not really that unique of challenges. Most businesses have a lot of the exact same, same issues, just dressed up a little differently.

Speaker A: Such a great idea. And even the point we made a minute ago about investing in your banker relationships, you may be able to kill two birds of one stone. Like, I feel like we've gotten a little anxious as a society because of the pandemic. And if things are feeling now, by the way, if you made 20% net profit in 2022 and your products are crushing it, you keep doing what you're doing, like, right. I mean, but Kevin and I are talking to, like, if 2022 is an unusually challenging year for you, one of the things that may seem a little counterintuitive in a digital world, with digital online sales, is just to go analog and go grab a cup of coffee with someone in your community that may have other experience. I gotta tell you, I hired a coach who's become my mentor, and he's just a guy that he actually, um, owned a, uh, small car dealership and a collision repair shop in Athens, where I live, Athens, Georgia. And the guy is just so, so wise. He had an incredible exit. He doesn't need my money, for sure, but his wisdom related to just how to execute on a business plan. Guys, I'm an accountant, and he called me out on my budget last week. And he was right. Like, I was being unrealistic because I didn't have outside eyes to see what I was forecasting. And I'm a doggone accountant slash cfo, right? And so I think just having those outside eyes and cultivating those relationships, um, it's just such a good idea. Kevin, I really appreciate you mentioning.

Speaker C: Well, I mean, just think about what you just mentioned there. The guy used to own a car dealership. You want to talk about it? Very cash intensive. Put money up front to get a little bit later. I like, you know, we think about, like, like, you know, if you have an E Commerce business, you're squeaking out maybe 10 to 20% margins or whatever. I mean, in the car business, you know, you sell a car for $50,000, you. You're not making 10 grand on that. You know, they're making hundreds of dollars if they're lucky. And some of that is just, uh, in hopes that you come back to the service department later is where a lot of that model is. So when you start asking ideas from other business owners, you're going to, you know, hear similar issues and they can relate to what you're saying, but they might have different solutions than what you're used to hearing.

Speaker A: Totally agree.

Speaker C: Awesome. What are some other things folks can do going into the year just to make sure that they've got, you know, the reporting and books in order?

Speaker A: Yes. I mean, your, your tax and seller accountant doesn't do taxes. So we're the bookkeeping and CFO side of this. But your tax guy is going to want you to have your profit and loss statement and your balance sheet done. And just remember, guys, once you file

Speaker C: your tax, we didn't talk. We talked about statement of cash flows, but we didn't talk about balance sheet. Just for those who are not familiar. Familiar. What is the quick, uh, equation there?

Speaker A: Yeah, so balance sheet is a list of everything you own, which is called assets. So I have cash, I have inventory, which. And then we. And then Amazon owes us money, maybe account receivable. And it's a list of everything we owe, which is all of our credit cards and, uh, our loans. And then what's left is what's called owner's equity, which is what, if you think about your house, if my house is worth, you know, half a million dollars and I have a $300,000 mortgage, then my net worth on the house or my equity in the house is the difference. Right. And so it's the same in a business. And so the beauty of a balance sheet is that it should balance. If I go in my accounting system and I pull up a, like, December 31st balance sheet, and like, let's say I have a Bank of America checking account, like when I pull up my bank statement, it ought to be the same number. Right. And so I think that's the beauty of a balance sheet is you can't ever trust your P L until you can trust your balance sheet. And so each of those lines, like if you were, if you and I were going through due diligence to sell your business, we would be wanting to be able to prove that each of those numbers on your balance sheet were the actual balances. Because the nice thing is you could actually log into your online banking and say, hey, actually, on 1231, this was my bank balance. See, I wasn't lying. It's here. And actually, I can go on Amazon. I can see that the, the reserved balance on 1231 was actually this amount they actually owed me. And so I think a good exercise to go through as we're starting the new year here is let's make sure our balance Sheets, balance. And by the way, if you look at your balance sheet because you've been neglecting it, because we all are, you're not alone. By the way, if you've been neglecting it, if you see a bunch of negative numbers or numbers that haven't changed all year long in your balance sheet, it's probably a red flag that your bookkeeping needs some attention. And you would be able to trust your financials a lot more if you had a pro take a deeper dive and take a look at what's going on.

Speaker C: Okay. Yeah. So if somebody wanted to have a pro, uh, take a look at it and do a deeper dive, where would they go?

Speaker A: Yeah, so thank you Kevin. That's like, I feel like I'm like, like T ball here, just teed it up and so seller account. So uh, so if you go to Seller accountant. Com, uh, one is that you can just reach out to us. We'd love to meet with you, take a look at what you have going on and if we can help you, we can. We also have a do it yourself course. So if it's not in the budget to hire someone on a recurring basis for just a few hundred dollars, we can train you how to do it right. And maybe train your VA or whatever. And so whether your budget is a thousand dollars a month and you're a scaled business and this really makes sense, or whether you need to make a one time $500 investment and just get it done, we can be a resource for you. So you can, you can find that information@selleraccountant.com Awesome.

Speaker C: I appreciate this. Definitely, uh, recommend check out seller accountant.com and you also have a podcast. If people wanted to learn more too, where would they go to listen to that?

Speaker A: Yeah, so you can find it on the website, but it's just return on podcast. So get it. I'm a cfo. Return on investment but now it's return on podcast. I'm about as clever as an accountant can get there. But no, you can find us on all the podcasts. Also my name Jeffcoat with one F. I think if you pretty much just Google me. Tyler Jeffcoat. Kevin, uh, will have us in the show notes here.

Speaker C: Mhm.

Speaker A: They're just who misspells a last name? JeffCoat only has one F. That's weird. If you look for it, I'm the only guy on Google. So you can find all the podcasts that I'm on including the show I did with Kevin about nine months ago. Right. So we can, you can always find our episodes.

Speaker C: Well, awesome. Well, I appreciate having you on. This was an interesting conversation about really, I think for folks is what everyone should take away from this is at the end of the day, you always have options and there's always something you can do. You might have to think about things a little differently than what you've done before, but there's always a way to get yourself into a stronger position.

Speaker A: Absolutely.

Speaker C: I appreciate you coming on and sharing your, uh, expertise on that. Thanks, Tyler.

Speaker A: Kevin, thanks for having me, buddy. Take care.

Speaker B: Thank you for listening to the Maximizing E Commerce podcast. If you found this episode helpful, you can get more episodes by subscribing on itunes or wherever you enjoy listening to podcasts.