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8-Figure EXITpreneur Shares His Journey
Nathan Hirsch is the CEO at EcomBalance, a bookkeeping service for e-commerce businesses, and the Co-founder of Outsource School, an education platform for businesses. With over 10 years of e-commerce experience, Nathan has always had a passion for running his own businesses and being an entrepreneur. He recently built and sold his e-commerce business, FreeUp.net, for eight figures.
Here’s a glimpse of what you’ll learn:
- [01:40] Nathan Hirsch talks about his entrepreneurial origins
- [6:04] The importance of good financials for the due diligence process
- [08:10] How to get the most profit from your add backs (hint: it starts with great accounting software)
- [12:42] Nathan describes the motivation behind Outsource School and gives advice for new entrepreneurs
- [17:03] Why understanding your numbers is crucial for scaling and exiting your brand
- [24:55] Nathan explains the services offered at EcomBalance
- [29:49] What Nathan considers to be the keys to business success
In this episode…
Do you want to spend more time scaling your brand and less time bookkeeping? If so, Nathan Hirsch has the solution to ease the financial burden for you.
As an entrepreneur at heart, Nathan understands the intricate parts of running a brand — which is why he created his bookkeeping service, EcomBalance. Good financials are the building blocks of a successful e-commerce brand, and properly organized books can mean accurate add backs and a greater exit. So, how can you get organized to make more profitable decisions for your brand?
In this episode of the Quiet Light Podcast, Joe Valley sits down with Nathan Hirsch, CEO at EcomBalance, to discuss the importance of e-commerce bookkeeping for growing and exiting your brand. Nathan talks about his entrepreneurial roots, how to get the most profit from your add backs, and why you need clean and proper books as an entrepreneur. Stay tuned!
Resources mentioned in this episode:
- Nathan Hirsch on LinkedIn
- Outsource School
- Quiet Light
- Quiet Light on YouTube
- Joe Valley
- Mark Daoust
- Quiet Light Podcast email: [email protected]
- The EXITpreneur’s Playbook: How to Sell Your Online Business for Top Dollar by Reverse Engineering Your Pathway to Success by Joe Valley
- Connor Gillivan on LinkedIn
- Matt Howitt on LinkedIn
- Paul Andersen
Sponsor for this episode…
This episode is brought to you by Quiet Light, a brokerage firm that wants to help you successfully sell your online business.
There is no wrong reason for selling your business. However, there is a right time and a right way. The team of leading entrepreneurs at Quiet Light wants to help you discover the right time and strategy for selling your business. By providing trustworthy advice, effective strategies, and honest valuations, your Quiet Light advisor isn’t your every-day broker—they’re your partner and friend through every phase of the exit planning process.
If you’re new to the prospect of buying and selling, Quiet Light is here to support you. Their plethora of top-notch resources will provide everything you need to know about when and how to buy or sell an online business. Quiet Light offers high-quality videos, articles, podcasts, and guides to help you make the best decision for your online business.
Not sure what your business is really worth? No worries. Quiet Light offers a free valuation and marketplace-ready assessment on their website. That’s right—this quick, easy, and free valuation has no strings attached. Knowing the true value of your business has never been easier!
What are you waiting for? Quiet Light is offering the best experience, strategies, and advice to make your exit successful. To learn more, go to quietlight.com, email [email protected], or call 800.746.5034 today.
Hi folks. It’s the Quiet Light Podcast where we share relentlessly honest insights, actionable tips, and entrepreneurial stories that will help founders identify and reach their goals
Joe Valley 0:29
Hey folks, Joe Valley here, welcome to another episode of the Quiet Light Podcast today, we have a serial entrepreneur and exit for because he sold at least one of the three companies that we’re gonna chat about today. At the third one we’re gonna chat about the most, but he founded Free E Up which is free, and then a big letter E and then the word up. And that was a VA company focused on us VA s and then Outsource School after he sold the first one. And now he’s on to EcomBalance, which is a ecommerce and bookkeeping firm. Y’all know, I love those. So I had to have him on the podcast. Your name is Nathan Hirsch, welcome to the podcast Nate
Nathan Hirsch 1:13
Yeah. Thanks so much for having me. And thanks for a copy of your book. I actually just finished it a few weeks ago. Very informative.
Joe Valley 1:19
Well, you probably liked how many times I said hire a bookkeeper hire bookkeeper, hire a bookkeeper?
Nathan Hirsch 1:24
Yeah, every time I saw the word econ bookkeeper, I just took a quick picture and posted on
Joe Valley 1:28
social media. I did see some of those posts. Thank you for those. I appreciate it, of course. Alright, so I give a very brief background on you. Why don’t you go ahead and give the full full Spiel to everybody that doesn’t actually know who you are. Yeah, I’m
Nathan Hirsch 1:40
a longtime entrepreneur. I’ve never had a real job outside of some internships and summer jobs. When I was in college. I started an Amazon business back in 2008 2009, out of my college dorm room, started off just buying and selling people’s textbooks for some extra side money. Realize that you could sell more than just books on Amazon and started this drop shipping business that quickly expanded beyond my wildest dreams. If you can imagine me running a multimillion dollar Amazon drop shipping business out of my college frat house. That was my life for a few years. And as I hired college kids and and struggled to retain them, and motivate them and get them to actually do what I wanted. That led me into the virtual assistant space. I remember hiring my first virtual assistant Upwork. And kind of having that aha moment that if I could hire virtual assistants in the Philippines and around the world to work weekends, work nights, work, different hours, list products, fulfill orders, all that stuff that I could actually grow this business and I moved to Florida with my business partner, Connor, shortly after college, we had big ambitions to take down Amazon and be the next ecommerce giant, which didn’t exactly happen as Amazon got harder. And there was more competition and coaches and consultants and courses started to come out. But we saw the path forward with virtual assistants and freelancers. And we built what I think at the time, it was the first ecommerce marketplace for sellers to hire virtual assistants and freelancers and consultants for their business. And it really started off with me just offering that the VA that we already had on our business, a lot of which were seasonal, to different Amazon sellers who really liked that experience. And then we turned that into a full blown marketplace added software scaled after four years reached eight figures speeding ahead a little bit went through an exit, which I’m sure we’ll talk about a little bit and since then trying to figure out what I wanted to get into next, creating two companies Outsource School, which is our education platform to teach people our hiring processes that have helped us so much throughout the years. And EcomBalance, really focusing on the financials of businesses because that really helped us not only make great decisions as we scaled FreeUp and scale our Amazon business, but helped us pass due diligence and go through an exit and have a good experience there. So kind of dipping my toes in all things from an Amazon seller to a marketplace owner to outdoor school to now a bookkeeping firm.
Joe Valley 4:09
Well, having gone through the exit, being an eight figure seller, business owner and going through an exit, as you said, the good clean bookkeeping helps you get through due diligence, which is critical. You know, a lot of folks don’t understand the value of clean books until they get into well, actually, until they look for evaluation of their business. And they realize they’re not doing accrual accounting and the books are a mess. And then when they get into due diligence, and how important it is there because everything has to be and will be verified whether somebody’s stroking a check for 100,000 200,000 2 million, a 10 million. They’ve earned that money. And they’re going to dig deep in due diligence to make sure your numbers are right. And first thing is to have good clean books. The other thing I want to mention here is that on a personal level, you just took on a foster child, that’s a big change in their life as well.
Nathan Hirsch 4:59
Yeah, and My wife really opened me up to the whole fostering community at the time, I didn’t really know what the difference between adopting and fostering was. But it’s definitely a good way to give back. I mean, I am so fortunate not only just because I ended up selling a business, but just having great parents and having food on the table and a roof over my head, things that a lot of people take for granted. And everything I know about finances and saving money and investing. I learned from my parents and having really good mentors there. And not everyone has that experience. I know a lot of the training that we did on fostering these kids grow up in rough homes with different situation, whether it’s neglect or abuse, or whatever it is. And hopefully, it’s a good way that we can give back and, and make a difference in kids lives. We’re still early, we’re only two weeks in so we have a long way to go and a lot to learn. But it’s been a great experience so far.
Joe Valley 5:49
Well, as I said, before we hit record you going straight to heaven for it. My sister’s got she’s five or six now, six. Actually, I know the number. It’s six. And she’s probably gates all the way No question about it. It’s good. You’re given back in a lot of ways. But let’s jump into the numbers on the business that you sold. It was an eight figure business. Why were why was it so important in due diligence that you had the financial so buttoned up?
Nathan Hirsch 6:16
Yeah. So there’s really two sides of it. First, is that trust trust factor, which I know you talked a lot about in your book, we had some preliminary calls. And keep in mind, this was a client of ours, a free client that reached out to us saying, Hey, we own a bunch of businesses, they called the Hoffa, that’s their main one, but they own some side businesses there, too. We want to get into the freelance space. We don’t want to start from scratch, would you be interested in getting acquired and from there, they asked us a lot of questions. And we knew our numbers, everything from what we were billing every single week to our profit margin to how the revenue had grown over the past few months. And everything that we told them in those initial phone calls, appeared later on when we actually gave them the numbers and gating the book. So that led to a lot of trust. The other side of it is when you’re going through due diligence, and I can only speak for what our process was it was one big Google Doc that they would add 50 questions to an email it over to us and we would answer them and then they’d add another 50 questions, and then we’d answer them. But we would be able to respond to those so quickly, they would send over those questions at 9am. And we would just go through our numbers. 80% of it is all about numbers and financials and track record and stuff like that. And we’re just grabbing and plugging the question, go to the next one. So I think that there, there are people who Mark Hargrove, David Marr and great entrepreneurs, they’ve gone through a handful of purchases for companies. And they even told us that we were the fastest to respond to all their due diligence questions. Just because we have the numbers, we knew the numbers, we knew exactly what was going on with every single part of our business. So both the trust factor and be able to answer those questions quickly and accurately, really helped the process.
Joe Valley 7:52
Yeah, they bought a couple from Quiet Light over the years as well. And once we realized your transaction was sold, we knew who it was and knew you were in good hands. Let’s talk about you’ve read the book, the EXITpreneurs Playbook. You’ve been through this process prior to reading the book project when the book was published? Did you find that you did a full and complete add back schedule? Do you think you left money on the table?
Nathan Hirsch 8:17
I actually think we did a good job. They’re adding back I mean, stuff like like conferences like laptops and stuff that that we bought all that got added back, keep in mind, we ran a very lean business. This was a remote company with virtual assistants in the Philippines, no US employees outside of like travel and meals. And some laptops, there really wasn’t much on the books, we built our own software that was all all remote. We weren’t even the internal team, it was virtual systems in the Philippines. So I definitely learned a lot from the book. And there’s parts of it that, for example, like going out and kind of getting different buyers that that we didn’t really do. But we kind of had a method beat behind the reason that we wanted to kind of keep it secret,
Joe Valley 8:58
but you had a you had a strategic buyer. So in that case, they came to you and they you were comfortable with the value. And that’s the thing I have to say is, you know, people sell businesses for a value that’s right for them. And they offered a value that was right for you and your partners. So it doesn’t matter what anybody else would have said, You like them, they liked you. It was a good fit. It made sense. And the other thing is that, you know, the businesses like yours, where you have a partner are generally the cleanest, right? When it’s a solo printer. They run everything through the books to write off, but you can’t do that if you have a business partner. Because then you have to figure out okay, well I bought a laptop, you buy a laptop, I’m running my mobile phone through it, you run your mobile phones. I went out to dinner last night with my wife you need to do it doesn’t work. So the books are generally much much cleaner when it’s a partner business like yours. Were you using a QuickBooks or 040
Nathan Hirsch 9:53
which is kind of ironic now because we use QuickBooks mostly for the e-commerce for but so we hired an econ or a bookkeeper within the first month of starting FreeUp this awesome bookkeeper from the Philippines, named Maurice and his expertise was zero, which is why we started using XERO. To
Joe Valley 10:09
begin with, why did you switch to QuickBooks for EcomBalance?
Nathan Hirsch 10:14
So we’re compatible with both QuickBooks and Xero. Because our head bookkeeper is more familiar with QuickBooks, that’s kind of our default. If someone comes to us with with no books, and they want to know which one to use, we’ll put them towards QuickBooks. But we do have people who will say, Hey, I’m using XERO, and we’re not going to migrate them just for the sake of migrating them. Yeah,
Joe Valley 10:32
those people that are using XERO, I’m going to guess the majority of them will be New Zealand, Australian, or someone, someone over in the UK, that’s what I found over the years. Have you had that experience yet? Now, as you’re gonna ask why, why is that? I think Xero, do you know where it was initially founded? It wasn’t in the US, it’s a foreign company,
Nathan Hirsch 10:50
that’s gonna say, like Amsterdam or something, just remember,
Joe Valley 10:53
that’s the primary reason why it was it was not founded in the US. I don’t know if QuickBooks was either. But it’s so established here in the US, but zeros was established somewhere else and is growing overseas more rapidly, I think, than QuickBooks. So you don’t prefer one over the other for entrepreneurs, you’re good with whatever they are comfortable with?
Nathan Hirsch 11:14
Yeah, I think QuickBooks has more capabilities. I know with FreeUp, we actually connected Xero to what we call time clock, which was the the whole marketplace of billing clients paying freelancers. And we actually ran into some API issues of just quantity where Xero just couldn’t handle the amount of transactions that we were pushing through every single weekend. And they kept us and we had to spend a lot of money trying to take all these transactions and put them into the less API requests. So I don’t know if we would have had that same issue with QuickBooks. But I know our head bookkeepers prefer QuickBooks. And for now that that’s a good enough reason to stick with them.
Joe Valley 11:48
No, I agree. I use QuickBooks I Xero. The only complaint I have about Xero is that when someone goes to export, a p&l, that goes back three years, it’s not intuitive to do it. For all three years, you have to everybody thinks you can only do it for 12 months, and we’ve created a video that people can get access to this show the three year period. But that’s the only complaint I have about it. And the fact that I actually have to then reverse the columns, right? Because Zero has the latest month, first in the column, and QuickBooks has the latest month last in the car. But that’s the US usually doing things backwards. The rest of the world does it another way. It’s funny,
Nathan Hirsch 12:29
you mentioned that because we’re trying to figure out how to make QuickBooks swap those because we like it because you’re used
Joe Valley 12:33
to it. Yeah. You’re used to it. Yeah. Well, I don’t know if you can do within QuickBooks, but you can always do it in Excel afterwards. For sure. For sure. So what after you sold Free E Up, you started Outsource School, right, Outsource School, but what was outsourced all
Nathan Hirsch 12:49
about? It was funny, when you’re going through a sale or after a sale, you kind of find yourself in a unique position. I mean, we went through six months of due diligence. It wasn’t quick, it was exhausting. It was stressful. And then after that, well, you’re kind of sitting there, you’ve got money in the bank, but you don’t really have a source of income. And you’re you’re kind of thinking like, what’s my purpose? What do I do next? Do I want to take time off. And I think originally, I didn’t think I would see my business partner for the next year, he was going to travel the world and go explore and, and I was going to take time off. I wasn’t sure what yet. And then COVID hit on out of nowhere. So we were kind of stuck at home anyway, after going through this exit without really anything to work on. And people started reaching out to us asking us if we could teach them our hiring process. And that kind of gave us the idea of watching Outsource School because we weren’t sure what we want to do next, we weren’t sure what industry want to go into. It was kind of lowest hanging fruit. So we put in the time to create a bunch of courses and trainings on not only our hiring process, but how to hire specific people like customer service, lead generation, stuff like that. And it all kind of came together. And meanwhile, Connor and I are meeting every single week trying to brainstorm that next idea with a lot of bad ideas thrown out there. And a year and a half later, we eventually came up with the combat.
Joe Valley 14:07
Wow, that’s a It’s impressive that you are buddy from college was your first business partner and he’s still your business partner now. So that’s good for both of you. I think good for both of you. Let me ask you one piece of advice that you might give people that have gone through a sizable exit like yours. Is it to have a plan for your next adventure? Is it take a specific amount of time off looking back now that you’ve done it? And you’re sitting down with somebody that’s about to go through it? What would you share with them? So a big thing
Nathan Hirsch 14:38
that I tried to tweak even now is just my schedule and how much time I allow for personal time and family. I mean, my wife’s the same through the years of FreeUp. You could get a call on the weekend at some VA quit in a client. I might be getting calls at night you’re working 12 hour days, like a lot of startups I was doing. I remember one week I did podcast I did five podcasts a day. For five days in the week, so I did 25 podcasts in one week, and it was insane. And it takes a little bit away from you mentally, and you can’t put in the same time with your wife or kids or whatever it is. So the first thing I did was kind of make a list of things that I would never do, again, that was going on more than one podcast a week, we’re taking anything on that was gonna force me to work weekends or work past 5pm Every single night and making sure that I scheduled time for, for friends for family and kind of reevaluating my life there. So that’s kind of my advice. I think it’s tough to make post exit plans. I actually think one of the things we did really well at FreeUp as we were going through the exit process is every day Connor and I would remind each other this deal might fall through and to not count on an actually going through and we stayed focused, we were we’re not only working two to four hours a day talking to lawyers talking to Mark and David going through due diligence. We’re also putting in those eight hours working on FreeUp and the last full month that we ran FreeUp, which was October 2019. That was actually the best month that we had had in the four years of running FreeUp and and that was hard to do. I mean, there are days you lose focus, you’re you’re hoping the deal goes through, you wake up every day, and you’re like, hey, if today the day are they gonna? Are they gonna come to us and say, Hey, we’re out. Even the last day when Connor flew down to Florida, and we drove down to Tampa to the hawth headquarters. We could have gotten there. And they could have said, Hey, we changed our mind, nothing’s been signed. And that was it. So we wanted a strong business to go back to and, and not just pay attention only to the exit and go back to something that was falling apart. If
Joe Valley 16:36
it didn’t go through. Well, you built a great business and you kept running it as if you were gonna own it in the future. And it kept growing, which just sealed the deal even more for them that they wanted to buy. I’d say I’ve seen it many, many times. Let’s let’s take a leap forward to you know, EcomBalance. I know the answer. But what’s the big deal? Why do people need e-commerce, bookkeepers?
Nathan Hirsch 17:02
Yeah, and speaking from someone who ran an e-commerce business as a young 20 year old that had nothing to do with bookkeeping, that one nothing to do with bookkeeping. I mean, my routine was at the end of every year, right before tax season. So we’re filming this in late January. So right about now, I would put together all my statements for everything, and I throw it to my accountant. And he would take 60 days and put it all together the best he could and find my taxes. And then I wouldn’t touch my books again to the next year. Well, that really hurt decision making a lot of entrepreneurs, especially in e-commerce, they’re just looking at cash going into their business cash going through Amazon disbursements, they don’t really know what’s going on in their business, they don’t know profit margins, they don’t know if certain products are making more money than others, or whatever it is. And that really hurt us. And it’s one of a few different reasons that we didn’t have run a successful Amazon business after your four or five. And with three up knowing the the monthly books from day one, we hired a bookkeeper before we were even profitable, the month would end within 10 days of the month being over like clockwork, like clockwork, we would gather our income statement, we go through it together Connor, my business partner and I, we go through every single line item and be able to compare it to previous months. And that allowed us to make decisions that were in the best interest of the company based on real information we were getting, we weren’t waiting till the end of the year. So it’s really twofold. It’s understanding the numbers month in and month out so you can make good decisions. And then if you do get to the point of an exit, you have that trust factor that we talked about, you have all the numbers ready to go and really helping with that process.
Joe Valley 18:36
And I’ll just reiterate how important it is if you do decide that you want to get to the exit, you really can’t get out of the starting blocks without good financials. I’m not talking about crystal clear clean in you know, perfect financials. I’m talking about the ability to run a p&l export from QuickBooks or Xero. Ideally, with accrual accounting. And then with a monthly view going back to Inception or as far as you can with a business that’s the starting point of a real valuation, whether it’s working with an advisor, like someone a Quiet Light or doing it on your own, if a buyer approaches you, if it’s a strategic buyer or something like that, you’ve got to have those numbers. And it’s a challenge. I find nature the biggest challenge, an area where people generally fall apart on is the accrual accounting on cost of goods sold. How the heck do you set that up in QuickBooks?
Nathan Hirsch 19:34
That’s another question.
Joe Valley 19:35
Don’t don’t get too far into the weeds because I’m sure it’s a very complicated answer. Yeah, I mean it coming
Nathan Hirsch 19:41
from someone who’s not a bookkeeper myself. I mean, we hire bookkeepers that have ecommerce experience that have accrual and cash based experience. And that’s a common thing that comes up on every single one of our onboarding calls because like you call down in the book, you’ve got so many ecommerce sellers that are doing a cash basis and they’ll have these one inventory buys. Let’s once a quarter that will just show up as some huge gigantic expense on that on that month that they bought it without really showing that the true picture of what’s going on. And it’s impossible to make decisions for your business if you’re not doing it accrual based, unfortunately not that FreeUp was a little bit different and actually made sense for cash because we were receiving payments from the clients and paying the Freelancers within the same week. So if you look month a month, you actually got a very accurate description of what was coming in, there wasn’t like a 90 days accounts receivable or accounts payable, or anything like that. Um, the other thing that I’ll add is entrepreneurs should not be doing their own books and I kind of come through this day in and day out. First of all, entrepreneurs are not good at doing their books, most of the time, it’s just going to have to get redone anyway by a different bookkeeper, different accountant. And second of all, it’s just not a good use of your time, you should be focused on the sales, the marketing, the expansion, launching different brands, whatever it is, anytime you’re spending doing bookkeeping is complete waste your time even if you were a former bookkeeper, a former CPA if you’re running an e-commerce business that cannot be taking up your time outside of going through the numbers every single week, and like every single month, and like you said that accrual is so important you want to know doesn’t matter if you pay for an hour in 90 days, you want to know how much money you made off the products you’re selling every single month.
Joe Valley 21:19
I’m going to echo what you just said it doesn’t even if you’re a prior CPA or bookkeeper, you should outsource it anyway. One of my favorite clients and now an advisor here at Quiet Light is Paul Anderson. And he owned a brand called Amazing aces are amazing ACES is what it was pickleball pickleball business, Matt how it down in Austin who owns profound commerce now bought it. Paul’s a trained CPA, he was a CPA before he became a full time entrepreneur. And the first thing he did was hired an e-commerce bookkeeper, he outsourced it, because he knows he can be you know, more productive focused on other things. So it almost goes to the, you know, I heard somebody say, I was on a panel at one time and a owner of one of the other m&a firms like Quiet Light said, in response to Why use a broker, she said, Look, you know, a CEO of $100 million company is not going to say I got this and go ahead and be their own broker, when they sell the business, they’re gonna, they’re gonna hire the experts to help them. You should not say I got this, when it comes to profit loss statements and bookkeeping, just hire it out, go to EcomBalance.com and hire Nate’s firm. I want to share one quick story, Nate, and we’ll get in more questions for you. I was at a mastermind event, and the founder of the mastermind event was up on stage sharing his p&l, which he does every time we have an event. And he outsources it, right, he doesn’t do the numbers at all, but he sits down with his team every, you know, like at the 10th of every month, and reviews the financials, and they don’t scan it, they review it in detail, like he talked about with your business partner. Well, he kept noticing, you know, the cost of shipping creeping up, right. And he finally figured out what the issue was after two or three months. And then he extrapolated the potential cost if he had not seen that error. And it was an error by one of the people fulfilling the orders, it would have cost him in this is a very large business would have cost him over a million dollars in increased cost of goods sold and shipping every year. Now you can add or subtract zeros as you need to folks, but you know, that particular business was valued at eight times. So by paying attention to the books, because it was outsourced, spending, you know, a few hours a month on those details saved him $8 million when he sold his business. And if he’d missed that for three, four years, it would have been another three or $4 million. So that’s that’s where you win. That’s where you win. And also you win by taking the powers that you would spend trying to import it and do it properly and you wouldn’t do it properly. You spend that time on developing the next cue or looking at your competitors and doing more marketing. That’s the way to do it. My opinion. Alright, so Nate, you you launched the company, you are the marketing person behind the company. I take it correct.
Nathan Hirsch 24:13
Yeah, sales marketing, Connor counters, kind of behind the scenes SEO website. I’m more out there partnerships, podcasts, stuff like that.
Joe Valley 24:21
And what what kind of one on one service would I get if I was to hire EcomBalance?
Nathan Hirsch 24:29
Yeah, so right now keep in mind, our background is hiring and processes. So the first thing we did for 60 days is interview bookkeepers, and we found a great one her name’s Shalya. She was an e-commerce seller herself. She was the CFO of a local company here in Denver that we plucked her from and and she started to kind of set up the basis for systems and hiring other people. And since then, we’ve hired more US bookkeepers or some Filipino bookkeepers to support that the US team and it all starts with an onboarding call. We’re going to go through your business point by point we’ve got about eight Questions, it started off as nine, we started adding questions that to really understand people’s business and from there giving you a custom quote with different options because some people come to us and this happened this morning, they haven’t done their bookkeeping in two years, and they’re behind on taxes, and there’s a big clan cleanup mass we have to fix. Other people come to us and they let go of their last bookkeeper, but they don’t want to go backwards, they just want to go forwards or you come to us with immaculate books. So everyone’s kind of a little bit different. But we want to give you both a plan for catching up and cleaning up if necessary, but also a monthly fixed price that hopefully is fair and reasonable going forward, where we’ll charge you on the first of every month and get your books down by the 15th or earlier, every single month going forward like clockwork, and not only are we going to get to understand your business, but every single month, we’re going to provide you findings and recommendations. And you made a really good point on tracking that the shipping costs going up. A big part of bookkeeping is yes, monthly books, and yes, going through it line by line. But it’s also comparing each line to previous months and looking at trends. And a big thing we did that FreeUp is every single margin, what was comparing it to the previous month and the month before that. So you could see, hey, our cost of MBAs is going up, but our revenue is going down or going up at a higher pace, or whatever it is, and be able to make those comparisons and be able to point that out for other entrepreneurs. I think that’s kind of the unique thing we bring to the table because Connor and I were entrepreneurs. First we know that bookkeepers and entrepreneurs don’t necessarily speak the same language all the time. And we want to be able to translate that into a way that entrepreneurs can understand, see what’s going on and understand their business and make decisions every single month based on that.
Joe Valley 26:42
Yeah, I love the fact that you guys are entrepreneurs, and you built this business because you do understand how entrepreneurs talk. Some bookkeepers don’t. So I totally get it. It’s the same thing. We do a Quiet Light everybody’s an entrepreneur. But talk to me about some of the challenges with well, you know what the challenges are with e-commerce businesses, FBA businesses with working capital requirements, cash flows a bear. How does having clean books and proper books help with cash flow projections and things of that nature?
Nathan Hirsch 27:11
Yeah, and that’s actually an add on service we’re building out for our client of ours now and we hope to offer other people is be able to project out 12 weeks of cash flow, because you get someone like this client who’s a seasonal business where during the summer there, they’re not really selling anything, but they’re not going to fire all their employees every single summer and rehire at the end of the summer. They sell to keep those people on they have to be able to cover payroll, and you don’t want to put yourself in a position where your your cash poor even though the business is making money at net profit wise and one of the I forget the status, someone posted on social media the other day where like 40% of ecommerce businesses fail not because they’re not making money, it’s because they’re not managing their cash flow. And they run out of cash. And there are some solutions out there, you’ve got companies like payability, or Amazon, or PayPal, you can get certain loans for, but you need to know what’s going on with your cash, especially if you’re going to try to keep inventory and stock, which is kind of the biggest issue right? Now, you don’t want to want to run into a situation where you under buy inventory, because you didn’t plan out your cash, right? And then you run out right before busy season. So knowing how much cash you actually have, and being able to project that out in the future. And you don’t have to be 100%. Right. But being within five 10% can be the difference between staying in business and going out of business.
Joe Valley 28:27
Yeah, I agree completely. It also is important when you’re growing like crazy. And you need to keep ordering more and more inventory, you need to know how much you can order. And there are options out there for raising capital that were not out there four or five years ago, just a couple of weeks ago, folks we had the founder of we are uncapped, we are uncapped.com on the podcast, it’s a growth funding platform, essentially, in about 10 minutes, you could you know, fill out the form and get capital for inventory capital for new hires and things of that nature. And it’s all based upon or paid back. When you produce the revenue, they take a percentage of your revenue, it’s actually six 7% interest rate two, which is seems fairly reasonable. So you may want to check that out. Okay. So on to like the management of people like I’m just talking business now. Right? I know, my level of incompetence, and it’s managing a whole bunch of people. You don’t have that level of incompetence on your side. So talk to we’re going beyond why people should use bookkeeping, any comp, balance. How, how, how are you going to manage the growth of all of these support staff that are going to be part of your company yet again, I know you’ve done it before, but share your wisdom and experience there for those that are also going through the same thing.
Nathan Hirsch 29:49
Yeah, to store that those initial hires are key. You need to hire people that have leadership ability, people who can run meetings, you can set goals, who can build processes, who can eat Even just talk to non bookkeepers in our situation if our head bookkeeper is giving us information that Connor and I can’t understand that makes it very hard to, to make decisions on. So part of it is making those right hires. And then the second part of it is meetings. And I know meetings are boring. But it really is the key to success. I mean, in FreeUp, we’d have our Monday morning meeting, we’d have a customer service meeting each week, we’d have a sales meeting each week with econ balance, because it’s a little bit more hands on, we have our Monday morning meeting, but then every day, we have a daily huddle with all the bookkeepers, to go through progress to talk through issues, especially now that we’re we’re building processes from scratch, then you’ve got leadership meetings, where we actually have that right afterwards, where we’re talking to our head from the Philippines head from the US and going through at a high level, what the goals are of the next week are and making sure that they can translate that down to the team. And then it’s also planning ahead for hiring. We did interviews this morning, where, hey, if we’re going to be accepting clients, we can’t wake up one day and say, Hey, we need a bookkeeper, we need to think 30 days, 60 days ahead of what kind of hire we need. And how does that support the current team we have. We just hired a US bookkeeper who’s very tech savvy. And we did that on purpose. Because we knew that was one of the things that was lacking from our initial hires, even though that our initial hires were great bookkeeping wise, lots of experience good at building processes. We did someone who can come in and automate and do things faster. So thinking ahead like that, doing meetings and making those initial key hires, you can really lead your company and really compromise complement your strengths and weaknesses. That’s all been a key for us.
Joe Valley 31:38
Well, you heard it folks, somebody who’s been there and done it, had his own eight figure business exited, built another. Now he’s on to his third. And I’m sure it’s going to be very helpful and useful to everybody that uses your services. So Nate, how do people find you and connect with you and learn more about EcomBalance?
Nathan Hirsch 31:57
Yes, you can find me on any social media platform, Nathan Hirsch or go to ecombalance.com you can sign up for a free trial. We offer a month free, you can book a sales call with our team and we’d love to work with you.
Joe Valley 32:09
I appreciate it. Thanks for coming back on the show. I know you’re on a few years ago. It’s good to have you back and congrats on the new business.
Nathan Hirsch 32:14
Thank you so much.
Today’s podcast was produced by Rise25 and the Quiet Light content team. If you have a suggestion for future podcasts, subject or guest, email us at [email protected] Be sure to follow us on YouTube, Facebook, LinkedIn, Twitter and Instagram and subscribe to the show wherever you get your podcasts. Thanks for listening. We’ll see you next week.