Hey friend,

So I still get requests from people asking me for advice on how to start, build and grow a business. It’s fun to look back and remember those early days... so many lessons yet to learn.

If you’re starting a new business — or thinking about starting one — here are a few tips from my own personal experience. There’s a lot we did that worked, and plenty of lessons I paid expensive tuition to learn 😅.

Here's 7 things I wish I knew earlier:

1. Focus on the few, ignore the many.

In the first few years, we tried to grow too fast and did too many things. We had a thousand ideas and it seems like we tried almost all of them — simultaneously. Also, we were bootstrapped, and this meant very limited resources.

The problem was we were comparing ourselves with more seasoned businesses and thinking "we should be doing more". In fact we should have focused on doing less, but better.

Quality over quantity, my friends.

2. Cash is king. Profit is a theory.

Ever looked at your P&L, and seen a profit that is way higher than the cash you have in the bank?

Or maybe it's when your accountant tells you how much you owe in taxes for the year and you look at your bank balance like:

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Profit is a theory. Cash is the lifeblood of a business, and if you don’t have it you’ll die. Trust me, I’ve tried it. More on this soon.

3. Improve your cash conversion cycle

E-commerce is very capital intensive. Between shipping, Cost of Goods (COGs), hiring, and everything else, you’re spending lotsss of money — regularly.

Focus on improving your cash conversion cycle. This means reducing the time it takes for you to get a return on your inventory. Otherwise your money is effectively sitting in warehouses gathering dust.

One way you can do this by getting more favorable terms with your top vendors so you can hold onto your cash longer. For example in 2020 I negotiated 90-day terms with our top manufacturer. This meant we didn't pay for any of our product until 90 days after it shipped.

(Negotiating payment for post-shipment rather than when production started meant they were incentivized to get that clock ticking! This meant getting products to us earlier 😉.)

Everything involving your cash should be a negotiation. Here's a great book on negotiation that's saved me millions.

4. Improve forecasting (or you’re finished)

If you're in e-commerce and don’t get good at forecasting your sales (or hiring someone to do it) you’ll struggle with either:

😥 Feast Mode: Too much inventory (cash tied up)

🫠 Famine Mode: Not enough inventory(nothing to sell)

Both are problematic. Here are a few basic tips:

• Analyze your historical data — when do you see the highest (and lowest) volumes of sales? What does this correlate with?
• Keep solid records — track your numbers regularly, and in one location. Define thresholds for success and concern.
• Start with a simple model — don’t try to solve everything all at once. Identify a few key metrics, make sure they are clearly defined, and work with a basic model that can help you forecast future sales.

5. Beware of The Bloat Monster!

The stuff you spend money on in your business should do one of 2 things:

1. Get you more customers
2. Help you retain the customers you already have

If you’re spending money on things that don’t accomplish these two goals, you may be experiencing an attack of the Bloat Monster!

It’s your job as an owner to manage business assets so they are converted into profits. If you’re careful with how you spend money, you will teach your team to also be careful. If you are careless, it’s likely that you’ll train others to be the same way.

At the beginning of your business when you don't have much money you won't see much of the bloat monster. He likes to show up when you have money in the bank. That's when you start to throw money at a problems rather than sitting down to figure out the best solution.

When you start buying the shiny new software tool rather than sitting down to decide on a good strategy, that's prime bloat monster territory 😜.

6. Culture is King

In your business (as in life), you will get what you tolerate.

As you hire people on your team for growth, the culture derives from behaviors of what’s seen as “normal”. If you accept low standards with no accountability, that will become part of the culture.

As the leader, you set the tone. Lead by example. Make it the kind of place that you want to work, driven by the results that matter.

Peter Drucker said it best: “Culture eats strategy for breakfast.”

7. Hire Slow and Fire Fast.

A book worth reading is Who: The Method For Hiring. I highly recommend it to anyone trying to grow a team. It will walk you through how to find and interview key candidates.

In the early days of growing a business, everything is busy and it’s easy to get overwhelmed and burnt out. You may even hire a couple of people to help but realize that they aren’t the right fit.

They might be great people, but you have to provide proper training and understand the role you need to fill. I’m still learning and implementing these same lessons as I start to hire people to help me grow projects outside of BestSelf.

Thanks for reading !

I hope you enjoyed these seven reflections on what to focus on as you begin to grow your business (ecommerce or otherwise).

Have a great week,
Cathryn

P.S. What was the last book you read that you couldn't put down? Reply to this email so I can add it to my list (I'll send you a good one too 😉)

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