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eCommerce Business Stages – Profits $1 million+ continued

Doing omnichannel marketing may also have you looking to expand into the global marketplace. Content personalization, omnichannel marketing, expansion into the global marketplace, automation, and so on. “At this level, you need a combination of resources to run your business most effectively” (Scharf, 2018).

Where do you go from here?

Outsourcing may be required for global expansion operations, and having a strong CPA team helping strategize on the financial impacts of expansion is critical here. This is where a fractional CFO can help.

Your accounting team is checking all your numbers regularly, and in most cases at this level in real-time. Your virtual controller is helping forecast and plan. And now your fractional CFO will help ensure that every financial box is being checked when expanding into omnichannel and international sales. “In the past, complicated taxes and high shipping costs have made expanding sales overseas a major challenge for SMBs, but new technology has lowered the barriers for small businesses looking to take advantage of untapped markets” (D’Angelo, 2018).”

Technology, as a whole, will be central to your eCommerce business’ growth and progress. From accounting to inventory to sales to taxes, you’ll want a strategy making sure all of these systems are talking with one-another and creating as much automated efficiency to keep any unnecessary human interaction out as much as possible. “The Shopify/ReCharge combination for subscription recurring billing comes to mind. These services work great together, but they become questionable as massive growth occurs. This is mainly due to the two components not being able to pass data back and forth in real-time, making manual data entry and reporting a bottleneck for scaling” (Hubbard, 2020). As your business has now experienced massive growth, you may need to take a closer look at the technological foundation that supports your company’s processes and creates your customers’ experiences.

Doing a thorough overhaul of your technology systems and network processes may feel like a tedious task, but it’s one that is well worth pursuing.

First, it’s essential that your software is not only providing the best possible consumer experience on the front-end, but also that the back-end systems are accessible and collaborative. Your business process commerce architecture is an essential tool that will help your team communicate better, work more efficiently, and stay agile in their actions to meeting your businesses goals.

Second, refining your tech stack is a great way to increase performance and multiply profit margins. Doing this will also allow your CPA team to perform more tasks through software automation and review more data accessed in real-time, enhancing your business’ operational capabilities and doubling down on your financial health. “Be diligent with these details because they are what can make or break you” (Thomason, 2020).

"Outstanding service, knowledge and support. I would highly recommend this firm to anyone for personal or business tax or financial assistance. A big differentiated benefit they offer over others is they run everything digitally, so there are no more physical papers to deal with - yeah!! Great job Insogna - hope I get more opportunities to work with you and recommend others do also."

Jerome H. Client

With your plan to continue scaling your business, you’ll need to invest time, people, and resources into researching new and upcoming technologies to support your growth. “A focus on scalability means investing in the business’ overall commerce architecture, the ecosystem of software components that are used to operate the business. This includes the e-commerce platform, CMS, ERP, CRM, OMS, PIM, marketing suites, analytics and reporting, etc.” (Hubbard, 2020). A valuable CPA team can help advise on your tech-stack so that you’re creating as much technological efficiency as possible at this level. Streamlining at this level will only make your life easier, and can cause your personal wealth to move into ‘auto-pilot’ mode, as you breeze past your projected annual profits.

Depending on your goals, your Phase 4 will look different. You may be intent on maintaining your lifestyle, determined to grow by a marginal amount each year, or focused on continued expansion by accelerating into omnichannel eCommerce sales. An experienced CPA team of advisors, coaches and strategizers that are working together to help you achieve your goals is an invaluable piece of the eCommerce selling puzzle, one that exists solely so that you can do your job better.

Whichever Phase you find your business in today, don’t put your success in the hands of unlicensed ‘Craigslist’ bookkeepers.

Get a CPA firm aligned with your vision who charges a fixed monthly price for all of your anticipated CPA needs, and who provides you with unlimited communication and access. Insogna CPA’s team of experts is here to help you when you’re ready.

eCommerce Business Stages – Profits $1 million+

You are now truly running an enterprise. You’re managing people, not just products. You’re selling on multiple channels, or considering doing so. You have more processes than you know what to do with, and they all must be able to communicate effectively with one another to efficiently get results that help you make strategic decisions.

Does this sound like you?

Your online business is seriously successful.
You have staff working for you, and your HR needs are growing.
You want strategic advice on how to grow and keep your wealth.
Your commercial space needs are growing.
You’re paying more taxes than ever and want to know how to pay less.
You’re thinking about expanding sales channels.

Your vision for your business stretches out in front of you now, expanding and multiplying towards the horizon. Your day at work is long, and your work day is even longer. You feel like you can’t work at the rate necessary to keep up with your growth of your business. But you also are finding it difficult to relinquish control and delegate, at least for right now, as you are just beginning the process of hiring adequate personnel to staff your blooming eCommerce company.

Your business has outgrown your home, and you likely have commercial space or are in the market for more space as you grow. And you have been able to fund the business, but additional capital is needed to get your business to that next level and you’re not sure where to begin. Your hopes are high, your energy is high, but your profits are not (yet) as high as you’d like them to be, and you can feel the pressure.

“An established business has proven itself in terms of being able to survive in a competitive marketplace, but that competition doesn’t go away as a business evolves” (Hubbard, 2020). Now is not the time to rest…at least, not yet. You must continue innovating, continue creating efficiencies, and continue forecasting your financial needs in real-time in order to reach a place of comfortable sustainability. This is where a valuable advisory CPA can help.

Our philosophy with our clients has always been to have an annual retirement contribution strategy, and let their businesses’ value be a ‘bonus’ when sold in the future. This way, over the course of many years, the business owner has accumulated a large savings balance and growing recurring dividends so the business owner can retire when they want – not based on when the business can be sold and the value they hope to get for their years of hard work. – Chase Insogna, President of Insogna CPA

The first step to growing any business successfully is people. Making the right hires that help take your business from ‘y’ to ‘z’ is critical as you only have enough bandwidth for existing tasks in a 24-hour work day. And while working 24/7 is sustainable for a while, burn-out can set in, and worsen your health. Outsourcing these days is easy with today’s technology.

Hiring the right CPA firm team of experts can be helpful taking care of your accounting, payroll, virtual controller, fractional CFO, and tax strategist needs.

An immediate benefit of hiring a CPA team is that you will have an entire accounting department at your disposal for ongoing expertise. “For about the same price as hiring a bookkeeper, you can pay for a fraction of [the total cost] to get an entire accounting department to support you the way your business should be supported.” (Scharf, 2018)

Apart from using different devices, another reality of marketing today is that prospects might have to use channels such as social media, email, phone, and others during interactions with your business. With omnichannel marketing, you can integrate all these interactions together so that you can deliver your brand messages to prospects. Furthermore, it helps you to reduce friction during the buying process and increase conversions. According to Invesp, companies with omnichannel customer engagement strategies retain 89% of their customers while companies without omnichannel customer engagement strategies only retain 33%.

— Bullock (2020)

"I first started working with the team for my small business--they were the only accounting firm who explained things to me in a straightforward way. We had them handle our personal taxes as well and were very pleased with the service we received. We've now kept them as our accountants through closing my small business, changing jobs, hiring different nannies, and moving across the country. Straightforward pricing and a responsive group who clearly know their stuff!"

Maggie J. Client

Instead of outsourcing your accounting needs to multiple people in multiple roles, hiring an entire accounting department means that communication will be efficient and effective, and all of the important players in your financial sphere will be able to actually talk to one-another. This increased efficiency internally helps with your overall goals – business and personal – as each person in the CPA firm is familiar with your business, financial forecasts, and work internally together to help reach your goals with you. Outsourcing to the right CPA team can help focus more of your efforts on continuing to build your successful eCommerce business and put more time back on your schedule for things you love – outside of work.

Now that your business is established, you likely find yourself with the ability to build your personal wealth and meet your future retirement goals. The majority of business owners we initially meet with do not have any plan for retirement, other than continuing to invest in their business. We find this strategy horribly mis-directed. A business owner rarely gets all of the blood, sweat and tears when they look for a buyer on the cusp of (or ready for) retirement.

Where you decide to invest your hard-earned profits is something that your accounting team can help advise you with. “Whether you’re planning out how you’ll spend a loan or how you’ll spend your monthly operating expenses budget, getting a handle on your cash flow is something you need to do before you make any big investment decisions” (Odjick, 2020). Your CPA will quickly be able to tell you what your current available cash flow looks like, and how far you can potentially stretch it to meet your goals.

Another area of significant interest at this stage of your growing business is potentially omnichannel marketing as you expand from one selling platform to two or many…

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eCommerce Business Stages – Profits $500,000 to $1 million Part 2

Remember that business plan from Phase 1?

This is the perfect phase in your growing eCommerce business to assess cash-flow forecasts to plan for your business goals as you move into becoming a $1M+ online seller. This is where you show your current financial state, which helps with securing funding (if needed) and getting that commercial space you have your eye on — because your house simply cannot take another delivery.

After you’ve acquired commercial space, you’re likely looking to hire additional people, if you haven’t already staffed up running out of your home.
Have you considered employment/ contractor agreements?
Benefits to keep talent motivated and working with your business?
Additional insurance needs?

These are all questions as you staff up from 2-10+ people helping you run your growing eCommerce business. There’s no better person than your CPA to advise you on how to go about setting up payroll — in a way that will allow you to expand without cutting corners or neglecting to follow employer regulations.

Tax strategy is another vital ongoing advisory service that your CPA can help with, as your profits are increasing rapidly.

A CPA also knows what kind of deductions you are able to take as a small business owner and is able to maximize those deductions for you, minimizing the overall amount you have to pay on taxes.

Without professional, on-going, forward-looking support, you can end up paying more taxes than you legally need too.

One great way that a CPA sets you up for success in this regard is to forecast cash-flow and determine estimated taxes to pay, deferred retirement options and personal wealth growth.

Speaking of strategy, strategic planning is the highest leverage benefit that a CPA will bring to your business at this phase of your business’ growth.

“In this third stage of the e-commerce lifecycle, the attempts to reinvigorate your company’s momentum and growth should always be strategic.”

This is an area that CPAs are experts in, and you want a CPA who knows your eCommerce business.

Depending on what your strategy is, or what direction your business is moving in, your CPA will make both short- and long-term predictions about your eCommerce future.

He or she will also provide advice specific to the Phase your business is in now, as well as the Phase(s) you want to reach. CPAs can also provide you with a general managerial accounting background, plus access to quantitative data that you need in order to make well-informed business decisions. This may include, but is not limited to setting profitability goals, creating acquisition strategies, and developing risk management processes.

As your business grows and you begin to move into Phase 4, a qualified and professional CPA team of experts will provide you with insight and wisdom that will be invaluable to your company’s goals. Statista predicted that retail eCommerce sales will hit \$4.2 trillion in 2020, up from \$3.5 trillion in 2019.

If your goal is to continue growing your e-commerce business into Phase 4, then you’re probably already looking for advisory and strategy help.

The right CPA firm is an invaluable expert to have on your advisory team that can help advise, coach and strategize with you, helping reach your goals.

For sellers with profits of $1 million+.

eCommerce Business Stages – Profits $500,000 to $1 million

Does this sound like you?

Your online business is outpacing your growth projections.
You may have (or be looking to add) multiple employees.
You want strategic advice on how to minimize your taxes before year end.
You may be interested in growing sales over \$1m and looking for efficient technologies and cash-flow forecasting to meet your revenue goals.
Your business is taking over your home and you’re running out of space.

At this phase in your business’ growth, you should take the time to pause and congratulate yourself.

Yes you may:

Want to grow your business even more
Have a to-do list that is the length of a novel
Have more responsibilities and stressors than ever

But that’s exactly why it’s so important that you stop to recognize how much hard work you’ve invested in building this company from the ground up. If you can’t appreciate your own hard work, why should anyone else?

That being said, you’re probably facing a whole new variety of issues, from how to save money on your taxes, to hiring employees, to cash-flow forecasting for the next Q4.

“You need to understand your data and keep an eye on key metrics to ensure the numbers are going in the right direction”.

A licensed CPA can help and become a truly integral asset to your businesses’ goals, your tax strategy, and your financial future.

For a business person, the opportunity to hire a CPA is kind of like being offered the opportunity to construct a financial “safety net” and place it securely beneath your holdings. It’s a form of business insurance that you can’t purchase from an insurance company.

But you’re not just gaining a procedural and technical knowledge base; you’re also expanding your “team” — you know, the people who have your back when you need financial direction and business advice.

It’s astounding sometimes, to new entrepreneurs, that businesses can, and often are, built from the ground up by a very small, select number of people.

The reason you want a CPA to be one of those people is because of the value they bring to the table as a sound board as well as a strategist. And seeking out an objective opinion on your business’ state of affairs is one of the best ways to stay grounded and feel supported as you continue growing your eCommerce business.

"Look actively for mentors -- their advice can be priceless, even for little things like acquiring business licenses. One of the smartest decisions I ever made was finding someone who could show me the ropes."

Darren DeMatas eCommerce CEO’s founder

Even if you’re determined to figure out everything for yourself, having a CPA advisor to help guide you through uncertainty, complex processes and maximizing tax deductions doesn’t mean you’re giving up any of your authority over your business decisions.

An experienced CPA can simply provide strategic context for those decisions, ones which are still yours to make, and can have a significant impact on your financial future.

In addition to having a CPA in your corner as a strategic partner, there are a number of other complicated processes that a CPA can help you make sense of. When you’re running a successful eCommerce business, you need to track your business finances, as well as your own personal finances.

Just like your own health can be checked by a doctor, your personal and professional assets can be checked for general wellness by a licensed CPA.

The first thing you’ll want to do is determine your net worth, and see which way it’s trending.

Next, calculate your debt-to-income.

Once you’re armed with these numbers, you’ve completed the most painful step in the process.

You can then track what you’re spending as well as where your money is going. Then you’ll know if you’re spending more than you should be.

After that, you’ll be prepared to set up an emergency fund account and then focus on your investment strategy. But first, ensure your financial health is… well, healthy!

Assessing your current wealth is a vital step towards becoming more well-informed about how to manage your cash flow that helps grow your business.

A CPA advisor can help you to create a budget for your business and personal finances, figure out how much to pay yourself from your company, estimate your income taxes, and how much is available for potential tax deferred savings to minimize your current year tax burden as much as legally possible.

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Insogna CPA 3-Time INC. Award Winner

Insogna CPA Receives Award: Recognized as No. 129 on Inc. Magazine’s Fastest-Growing Private Companies in the Southwest Region

Companies on the 2022 Inc. 5000 Regionals Southwest list had an average growth rate of 154% percent.

Austin, TX, March 15, 2022 – Inc. magazine today revealed that Insogna CPA is No. 129 on its third annual Inc. 5000 Regionals Southwest list. It is the most prestigious ranking of the fastest-growing private companies based in Arizona, New Mexico, Oklahoma, and Texas. Born of the annual Inc. 5000 franchise, this regional list represents a unique look at the most successful companies within the Southwest region economy’s most dynamic segment–its independent small businesses.

“We are excited to be recognized, for the 3rd year in a row, by Inc. Magazine,” said Chase Insogna, Founder and President of Insogna CPA. “Our experienced team of professionals work diligently to serve our valued customers every day. This dedication to delivering great customer experiences has led to significant year-over-year growth at Insogna CPA,” he continued. “We are extremely proud of our team’s success and look forward to continue providing ongoing financial expertise to our valued customers.”

The companies on this list show a remarkable rate of growth across all industries in the Southwest region. Between 2018 and 2020, these 141 private companies had an average growth rate of 154% percent and, in 2020 alone, they added 10,563 jobs and nearly $10.9 billion to the Southwest region’s economy. Companies based in the Austin, Texas, Scottsdale, Arizona, and Fort Worth, Texas, areas had the highest growth rate overall.

Complete results of the Inc. 5000 Regionals Southwest, including company profiles and an interactive database that can be sorted by industry, metro area, and other criteria, can be found here.

“This year’s Inc. 5000 Regional winners represent one of the most exceptional and exciting lists of America’s off-the-charts growth companies. They’re disrupters and job creators, and all delivered an outsize impact on the economy. Remember their names and follow their lead. These are the companies you’ll be hearing about for years to come,” says Scott Omelianuk, editor-in-chief of Inc.

Award Methodology

The 2022 Inc. 5000 Regionals are ranked according to percentage revenue growth when comparing 2018 and 2020. To qualify, companies must have been founded and generating revenue by March 31, 2018. They had to be U.S.-based, privately held, for-profit, and independent—not subsidiaries or divisions of other companies—as of December 31, 2019. (Since then, a number of companies on the list have gone public or been acquired.) The minimum revenue required for 2018 is $100,000; the minimum for 2020 is $1 million. The rigorous selection process ensures that only the most dynamic and rapidly growing companies are recognized, reflecting the vibrant entrepreneurial landscape across various industries and regions of the United States. As always, Inc. reserves the right to decline applicants for subjective reasons.

About Inc. Media

The world’s most trusted business-media brand, Inc. offers entrepreneurs the knowledge, tools, connections, and community to build great companies. Its award-winning multiplatform content reaches more than 50 million people each month across a variety of channels including websites, newsletters, social media, podcasts, and print. Its prestigious Inc. 5000 list, produced every year since 1982, analyzes company data to recognize the fastest-growing privately held businesses in the United States. The global recognition that comes with inclusion in the 5000 gives the founders of the best businesses an opportunity to engage with an exclusive community of their peers and the credibility that helps them drive sales and recruit talent.

The associated Inc. 5000 Conference is part of a highly acclaimed portfolio of bespoke events produced by Inc. For more information, visit www.inc.com.

eCommerce Business Stages – Profits Under $100,000

You’ve decided to take the leap and start an eCommerce business. Congrats!

You’re thinking about selling online.
You’ve started dipping your toes into online selling.
Your online selling business is taking off after your first “big” month and your profit is trending over \$30,000 this year.

This is the start of your hard work and investment into building this business to reach your goals. It’s time to nail down the big ideas, strategize over your growth targets, and develop a well, thought-out business plan. It’s time to clear out that storage shed or guest bedroom and begin accumulating stock. It’s time to take action so that you can live out your dream of building your own successful eCommerce business.

In the early days, you’ve probably done some homework and figured out what’s important: marketing your products, determining what capital to use to start, and getting those first sales in the door, especially during the fourth quarter. Achieving these three goals is usually crucial to kick-starting your success. You are likely doing all of your own sourcing, buying, pricing, and listing online, as well as managing fulfillment (or maybe utilizing a co-packer), customer service, inventory management, and sales taxes….and that is before you even think about completing all of the back-office tasks, such as accounting, inventory count and how to minimize your taxes.

Accounting 101

Getting accounting set up from the beginning is crucial with your eCommerce business, because the more this step is delayed into Phase 2 (or worse, Phase 3), the more mountainous the amount of work required to clean this information up – as well as the significant cleanup costs that come with this project work. And have you considered how you’ll provide your lender with financial statements if you’re seeking financing or a mortgage?

Accounting is not just syncing and categorizing your transactions. Are you properly recording gross revenues? Most merchants only sync net amounts to your books. If you value your time and would rather automate as much accounting work as possible, the costs easily outweigh focusing more of your attention on selling more of your products online. Maybe you manufacture or assemble your own products. What about recording COGS from inventory to match your revenues? Or maybe you’re reselling products by arbitraging? With all of the platform fees, do you have any easy way to determine true net profitability per product sold, with overhead included?

Then there is your business’ structure to consider. Many start out as a DBA (Doing-Business-As) with their county registration. Just remember this does not protect your business name with your state, so if you are building a brand or storefront name, it is possible someone could register this too and easily compete against you – or worse, legally claim your brand name. And if you’re selling on Amazon and/or other platforms, changing your business name and EIN# can potentially cause you to lose all of your reviews, causing you to start from scratch again (from a marketing viewpoint). So, setting up an LLC is likely beneficial in most cases when starting out. We can help advise on the best structure for tax strategy planning so you can maximize your tax savings with your eCommerce business.

"Insogna CPA has done our Amazon Business taxes for the last two years. They are the best accounting team that we have worked with to date and we plan to be long-term clients. Excellent staff who truly care about satisfaction and diligence. Great for All Amazon Sellers."

Nick Ehle

Owner

You may be selling through eBay, the Amazon Marketplace , Etsy, and/or perhaps your own website.

Your customers have mostly stumbled upon you or found you through word-of-mouth, and you wish you could focus more of your time and efforts on marketing and growing, instead of worrying about educating yourself in legal and CPA stuff. Expertise is developed over many years in business. So, the value you pay to a professional will help you alleviate any unnecessary time figuring this out for yourself and hoping you made the right decisions. The potential of losing your customers is a real concern. We have seen this before, where someone quickly set up shop on a marketplace and did not think through the long-term consequences, such as their business evolves.

Choosing the right legal structure (LLC or Inc) is not only important for liability protection and taxes but is also very important to set up when initially creating your Amazon store online.

In order to sell on Amazon, for example, you are best off having an Employer Identification Number (EIN) rather than using your Social Security Number as a DBA (doing-business-as) entity. Setting up your entity from the start is recommended because switching after you are already established on selling platforms can be very costly and time-consuming. These small details are exactly what an experienced CPA can help advise you with, and why many eCommerce business owners look to partner with a CPA early in their business growth.

Though you want a CPA who can deliver the best advice to your business, you’re also probably working with a limited budget – and are interested in getting the most bang for your buck. That’s why it’s essential that you join forces with a licensed professional, like us, from the beginning to avoid costly ‘catch-up work’ in the future as you grow.

There is a host of what we like to refer to as “craigslist bookkeepers” out there; people who advertise their services as though they are a professional, but do not actually hold a license. They also cannot provide you with the state board protections that a licensed CPA can, the same protections that provide greater transparency and allow you to trust that your information will not just ‘disappear’ one day when you are not able to get a hold of your ‘craigslist bookkeeper.’ If you decide to spend your hard-earned money on professional services, be certain that you’re getting the best professionally trusted advice and expertise.

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