Boost Your Shopify Store Growth: Lessons In Tax And Finance Strategy

You're listening to Ecommerce Fastlane. The podcast show to help you build, manage, grow, and scale a successful and thriving company powered by Shopify. Listen to real conversations with partners and subject matter experts as they share proven practical strategies, platforms, and the best Shopify apps to help you accelerate your business. The time is now for you to improve efficiencies, grow revenue, profit, and lifetime customer loyalty. Please welcome your host, startup founder and strategic advisor, Steve Hutt.

Welcome back to Ecommerce Fastlane. I'm your host, Steve Hite. You know, thanks so much for joining us today. Like, it's so interesting how many podcast choices there are out there. And, actually, my guest and I were just chatting a moment in the green room about before recording.

And it's it's so interesting that, you know, you put in the hard work over time and the impact you can have. This is like, gosh, that's like 350 at some episode now, and I'm so grateful to have the opportunity to be able to meet some incredible people that are making big impact with the brands that connect to Shopify and can help with, you know, marketing or development or improving efficiencies. Today, we're gonna get into more into the financial side of a business, which I think is super key and important. My guest is Alan Chen, and he's the founder and CEO of a company called freecashflow. Io.

All the links in the show notes for them. Alan is a CPA, so he's a certified public accountant. He's been in business as a CPA for over 20 years. He has significant experience in tax, accounting, and even in in M and As for those that are looking for some point making an exit from their Shopify store. But this company, free cash flow, really what they do is they specialize kind of in a I call it like a comprehensive kind of accounting and kind of financial services for Shopify businesses or any kind of online store.

E commerce, I believe they get involved with Amazon FBA stores, they help with agencies and content creators and influencers. I think they even do SaaS companies. They're based in LA. The end of the day, their company really is here to help businesses to maximize profits, which I know we all need right now. I know there's been lots of complaints about acquisition costs right now and and and driving traffic to get net new customers.

Just understanding the full growth formula, so to speak, for a business, and tax planning, and tax compliance, and kind of future proofing your business, I think is super important. So hi, Alan. Welcome to Ecommerce Fastlane.

Hey, Steve. Hey, everyone listening out there. It's a pleasure to be invited to the show. Yeah. Thank you for having me on, and hope we can share some impactful ideas and tips on task optimization and bookkeeping for you guys.

Lovely. So what's really interesting about your role, and you have so much experience, I'm I'm envious to a certain degree. It's like my son, just like a math whiz, and just kind of really complete like the way people's brains work when you get involved in accounting and accounting management, you really understand the mathematics and the profitability and and the growth formula, I'm gonna call it. You know, and and I think that's a really important tactic to have. I think different people think differently, some people are more creative, and you clearly have put your flag in the sand that that numbers are an important part of a business clearly.

And so I just wanna talk about, like like, what inspired you specifically to get involved in this field and then eventually build the free cash flow business?

Yeah. No. No. It's a great question, Steve. So and I think I started out just as, you know, a typical person in accounting.

Right? Just going going through my ropes, skip, getting my way up there, you know, going learning about accounting, tax, bookkeeping, compensation, financial management. But at a certain point, I think it was around back that COVID period where, you know, everything kinda shut down, and I, I need to find a little note outlet for myself. Right. And I think a lot of people also turn to e commerce and drop shipping for that.

So me and my, my friend at the time were like, yeah, why don't we try this out? You know, I know we're just accountants here, but Hey, maybe we're, we we're multi, talented and, can, can get into this. So we started doing what everyone else did, just learn from other online businesses, learn from YouTube. Right. And try to see how we can get our hands into the world of e commerce.

So we learned a lot. We started our own store in Shopify. We sold various products that we imported from Alibaba, things like that. I think, I don't know. I don't think we would, would that great on the marketing side of things that, you know, best month for like $10,000 And when we realized the experience that we were able to talk to a lot of e commerce owners.

Right. And we kind of start seeing the same patterns of pain points they're going through. Like, you know, some people figured it out. They're really good on the creative side and they found a winning product and they they're scaling, but then they're getting all into all these tax issues. They're getting state sales tax letters from state governments and they're panicking.

They're like, what do

I do

about all this stuff? And me and my partner, we took a step back and we said, why don't we do what we actually good at, which is the math baseness of this and tax optimization, but still, you know, use that to focus on these T type businesses that we're now really at keen to. Right? So we started getting feedback from them and talking to them. It was like, Hey, what would, what would you think about if we were to help you, you know, optimize your, your, your books and let you learn about your profitability, your numbers, and, and help your attack plan?

They're like, oh, we would love that. Like, that would be a huge weight. So some of our first client just came from that. Right. And then that's really how we decided that, Hey, this is the right path.

These are actual people, actual business owners that really need our help. First time entrepreneur, a lot of these guys, and this is, we find really real value in here to really focus on it. And honestly, Steve, the tax law is just huge, right? Yes. No one wanna redo a page of fine print.

So we're like, you know what? Let's focus on like a 100 page of e commerce tax laws and really deep dive into it and really understand it and really make sure that these guys are getting the best benchmark and optimization for their tax situation.

It's interesting. I had quite a few brands that I managed over the years when I was with Shopify. And, you know, some of them would have they would either outsource a bookkeeper, or they would have someone in house that would just wear another hat, just kind of a lean team kinda doing their thing using Xero or QuickBooks. And and so I think there was some reasonable amount of journal entries happening, and and and maybe that that paired with what Shopify's kind of, like, reporting had internally for potential profitability and and revenue and these sorts of things. But the challenge that I found was that they didn't seem a lot of the business I've managed didn't really have a plan.

Like, they they seem like they were going through the motions of they knew the importance of of of itemizing revenue and expenses and and and trying to do some some basic kind of accounting practices, but they really weren't thinking the long term about, well, like, who's planning the growth for the next quarter? Like and instead of, like, you know, using a dartboard and just saying, well, we believe it's here or this is what we want, instead of actually looking at numbers. So, like, so from your perspective, like, is is this just a maturity phase that brands go through where they initial initially start off with QuickBooks or Xero, and they do that sort of thing. But do they eventually migrate over to the next step and saying, no. This is actually a real business.

It actually needs to have some a proper adviser and some recommendations behind to future proof this business.

Yeah, absolutely, Steve. I know you helped hit the nail on the the finance coffin here. Okay. Alright. So the beef.

Right? Yeah. And and I think, Steve, if they're starting out using QuickBooks or 0 or no to do that, they're already, I would say ahead of, like, the game. Right? 70% are hitting game.

A lot of guys, clients will come to us on calls. They're like, yeah, we wrote it down a piece of paper. Really? Like just some piece of paper on your desk yet. Yeah.

Yeah. So some, how much sales we made and how much inventory costs for us. So like, okay. You have these paper for the last 18 months, like so somewhere. Okay.

What about expenses? Or what about, you know, things that you bought for your business? How's your bank account set up? Are you, are you doing good segregation between personal and business?

Right. Or you

have to have an LLC going, like there's so many questions when we start asking them and then you can just see the panic on their face. Right. And they realize, oh, wow. I'm actually more behind than I thought. You know, and for businesses that are just like hiring a new guy, there's nothing wrong with this by the way, but just, just, you know, what do they have to write that when they're starting the business?

Like, yeah, I just gotta go with the, the cheapest route. Let me just find a freelancer and say, Hey, can you just put some numbers together for me? Give me out a pen and pencil, Ellis. Right. It's, you know, it's a real world of, digital software.

Right. And maybe, maybe Excel spreadsheet. Right. That might mean that it's step.

Right.

And, and that might be a good start too. But yeah. And then the one after that is definitely accounting software. And then I would say Steve, like if they really are a full time entrepreneur, their goal is to grow their business 5X, 10X it. Right.

And get it, get it to a state where the, this is a family business or get it to a state where there's a match number to head where like, this is the number I wanna hit and then I wanna sell this off, right? And that's, if that's their goal, that's not the way to do it. They have to get, find someone that can help them optimize their numbers, understand their metrics, and really help with also with inventory management, which is a huge key in the world of e commerce, right? If they don't do all these steps, I have seen businesses go very quickly backwards, very quickly down to the bottom of the barrel, right? Because they're like, wait, what do you mean amount of money in the next 4 months?

Right. When we would do like a diagnostic report for a certain company and then we'd never heard from them again. Because like, we would help you, but then you didn't start panicking instead. And then they would go go and do some internal struggles right after that with their partners. But I was like, yeah, you got to understand what is your cash burn?

How much operating dollars are you actually spending each month for you to operate your business? What would happen if you miss a shipment coming over seed, right, to your business? Like, did you just, you know, are you just sold out for the next month and not making any money? And how does that affect your business? Right.

And there's so many questions like that, that I feel like a lot of e commerce owners who are just, you know, who kind of build up their business very fast within a year, right. Some, some reach 6 to 7 figures don't have the capacity or the knowledge to answer, right, because they're not hiring the right people to kind of advise them on those things. And, and for me, I'm like, hey, if this is a hobby for you, if you're just doing this as a supplementary thing, right, to your full time job that you have, and then it's cool. That may be the way you can do it, because you're just you're just trying to sell maybe, you know, 100 to 200 items a month. There's a little bit of supplementary income.

This this model works. If this is a full time gig for you, if you're looking to build an ecommerce empire, that's probably not sustainable, right, for the long term.

Yeah. And I think, you know and and even go further down that journey too, and you talk about, well, if there is an an exit in play at some point in, you know, in years, even 3 to 5 years from now, I think you're you'd be well served by hiring you or someone like you in your organization because I believe you're gonna set everybody up for success. You do have a lot of skills. Maybe we should share that with the audience that you do have m and a skills, the understanding, well, what do acquirers actually want to see in a business? And I think it's a lot more than just journal entries in QuickBooks.

So tell me, like, just so those that are listening that they because there's gonna be some people in the mid market right now that are listening. They're like, hey, you know, we're doing well. We, at least, we believe we're doing well, but we just don't know if we're fully compliant, and and we have all the appropriate records that we believe in m and a, you know, or the next acquirer, a private equity firm, or who knows? They're looking for certain things. Maybe you can share their audience what those things are.

Yeah. Absolutely, Steve. So I think the one of the first things that when when these companies are at that stage of going to due diligence process, one of the first question they're gonna get asked is, are you in compliance with all the tax authorities? Right? Are you registered?

Have you been paying your sales tax? Do you have any unknown liabilities on your books? Right. We got, we had a squared out one way, because that's just gonna come by and buy you. That's just gonna may make, you know, make the whole intent process much more dragged out.

Sometimes they'd also lose interest. Right. And move on to the next one. I do get do that step is to make sure that, you know, your last two years of your, your P and L, do you, are you showing a picture of growth? Are you showing a picture of profitability?

Are you showing potential there? Right. Do all the, all the important metrics that, that you, that you measure kind of in, in here. And then are, are you, how are you controlling your inventory? Right.

Are there stale inventory, obsolete inventory? How much of it are you writing off every month? And do you have a game plan going into it, right, of, of your concentration of sales? Right. If, if a certain region or state, you know, you're not doing well in, right, what is the game plan?

How are you diversified? Is your payment provider well set up, right? Are you, are you watching out for all your processing fees and things like that? There's a lot of these questions that need to be answered ahead of the due diligence process, so that you're painting a picture that I'm putting a, a, in a well oiled machine here and you should be glad. I, you know, I'm putting this business up for sale, right?

That's the picture you want it, that the persona you want to take into those meetings so that when you go away with it, they're, they're the one that's saying, oh man, we need to up our offer. There's no way this guy's gonna sell us the business when, you know, X price anymore. I've been hearing about all the things, all the great things they're doing for their business. And, and they're also gonna say, wow, this guy has a great finance set up so that, you know, they, they know, they know their stuff. We're not gonna be able to low ball them, you know, provide them with a low offer and they're just gonna take it because they don't know the benchmark with the market out there.

Right.

And,

and having that, that, the expert in that meeting with you really helps with that. Right. And also a CFO, for example, I would definitely recommend you take someone like that who understand e commerce, who you can take into those meetings. And it just, it's just a great, I would say presentation front, right? When you, when you present it that way, so that they know that, you know, you guys know, know your stuff, know your numbers and not gonna just take them a mid offer from them.

Right. Wanna talk a bit about how your organization, how you connect to Shopify and the financial records that are, you know, the bank accounts and credit card statements, things like that. Because I think most brands, you know, if they're at that next step versus the paper scribble or or, you know, Google Sheets, they're making some kind of journal entries in Xero or QuickBooks. So they have at least something there, and I believe there's gonna be some kind of middleware or some kind of app that will sync the Shopify store and at least, you know, and then maybe select bank accounts and a few things like that just so that, you know, there's a a little bit of a source of truth a little bit somewhere. In Shopify is your source of truth mostly, but you wanna sync to some financial system, either Xero or QuickBooks.

But in your particular case, can you walk us through how your system works and how you can streamline kind of the onboarding process of an existing Shopify business that believes that, you know, they're not doing it well enough today for the long haul?

Yes. Be happy to go do that. Yeah. So I think it it does it does for a lot of our clients start in the quick QuickBook world. Quick QuickBook is great just because it has tons of connectivity, right, to all the e commerce platforms.

A lot of the inventory fulfillment companies that we work with also has great connections through QuickBooks. So that makes things easier. Right? Like you were talking about Steve, it's good to have one, I would say, source of truth somewhere where, you know, the data is going to be correct. All the data is going to be in one place, you know, easily manipulatable, easily presentable in different kind of slices and splices as, as you needed.

Right. If you need to see per unit profitability, if you need to see to a certain region or certain location, how you're doing in, in those regions, that's super helpful. So we always recommend that, you know, if possible, you start with QuickBooks, connect all your bank accounts, credit cards, anything that's come to help do with your payment, payment transaction, do do it. And then we kind of just take over from there. Right.

And what's great about QuickBook online is it's in the cloud. Right. So you could have easy accessibility to all your data versus like, you know, you, so you saw a desktop software, you know, you may always have the email, but ask someone to say, Hey, can you send me this? So and so, so and so, which slows down the process a lot. Right.

When, when the fast moving world these days and the other idea, the other second part of your question is onboarding. Right? So we, we do, we do try to take, take, make as painless as possible. There's a lot of, a lot of client really like, yeah, how long does onboarding part? Is it going to take, you know, a lot of my time is going to be like that?

It's like, no, we, we try to be paying, we are as painfully as possible. We have these forms that you, that we need to fill out. Cause we need to collect this information, make sure all your financial institutions in sync with QuickBooks. And then we kind of just take over from there. Right.

We kind of take over from there and able to provide those recommendation reports and things that you would need to basically grow your business, know what's the next great recommendation that we, that you need to take. And with that, so we saw having also these monthly, calls was a lot more about 6 to 7 bigger businesses.

Right.

To give them an understanding that, hey, here's your financial statements. I know this just look like numbers on a paper to you, but that's what we're here for, right? To walk you through what each of these numbers mean, how you're looking month over month, what is your cash burn looking, looking like, and what can you do as the next step to move your business forward? And then we talk about goals, right? What is your goal of your, of your, of your company?

Is there a certain number you're trying to reach? Is there other shareholders we should know about? That's going to take over this business? Are you planning on, you know, hiring employees in the states like that? That was a big thing during COVID Steve, when they, when the government was giving out all kinds of these credits, right.

From employee retention credits or COVID credits. And I was like, yeah, this is a great time for you to grow your business, especially some of our clients who are more inventor types who create their own product line. I'm like, yeah, R and D is heavily rewarded in the US right. R and D credit is given out in abundance. So if that's something you're doing, which do the study and make sure you're getting that that tax rate that you do deserve for, you know, helping the US economy, you know, optimize.

Yeah. I love this. It kinda makes me think about another area that's quite interesting. This comes up in conversations a lot, is about nexus and because it's very challenging understanding nexus laws. And the reason why I I bring this up is because in my Shopify days, one of the default installs of a Shopify Plus, so mid market to enterprise brands, was to have Avalara connect.

And I think Avalara and Shopify had some kind of a of a relationship where they're allowing for API connection between each other, and Avalara's tax engine was the one that was showing the state, the county, the city kinda and because you are well aware, there's the the tax laws and and rates are so different. It's not by state. It really goes all the way down to the county and city, and it can get really complicated. I know Shopify kinda generalizes things with their own kinda tax engine was kinda like the default install. I think mid market has the opportunity to go in with Avalara and then have have its engine work, its magic kind of in the shopping cart.

My question to you is that there's businesses that are in America that are shipping, let's say, to Canada. Some are are considering the internationalization, which is kind of the nexus part of this business about who's the merchant of record, you know, and and how my duty and tax compliant, both just maybe shipping to Canada or just overall in the world. So I'd love to hear it from you because I think you have a little bit of, on the boots on the grounds that kind of experience in understanding nexus law and how to be compliant across these different jurisdictions. So I just would love to hear your feedback on that.

Yeah. Yeah. Thanks for that question, Steve. I yeah. You you're absolutely right, Steve.

I mean, the world of sales tech debt is not fun. No. It's not it's not even fun for a CPAs just because it's just it just varies so much. Right? And and I know I know you wanna talk about international peace, but usually in the US, right.

Each state just have their own laws and jurisdictions about sales tax. Right. And Colorado is gonna be different from New York. New York is gonna be different from Florida, from California. They have own, their own direct schools.

And, and and you, you, you really, you hit, really hit that nail there. They also have down to the details of the city, the zip codes, the districts, the counties, and just gets really messy. Right. And then if you're a business owner that had to deal with all that, plus you're also dealing with an international piece of things, right? If you're shipping to Europe or Australia and then deal with that, that's, that's a lot of, that's a lot of weight on your shoulders.

Right. That makes you not be able to sleep a well, you know, well rested, you know, at night. Right. I'll think you might have nightmares about, you know, sales tax numbers jumping down instead of sheets, you know? So my advice for a lot of clients who are going down those paths will, and it's really dependent concentration to right.

How much they're doing the us versus international is unfortunately, well, fortunately, I don't know. I don't know which way you put it. It's like us, the CPAs, our jurisdiction stop at the border as I'm about to say, right. We can only help you with everything. US tax law related, right.

From California to Florida, all the way up to Maine. Right. Once you hit that international side, what we can do is support you as far as, you know, we have connections in a lot of different countries, as far as like their CPA or CPA equivalent, like CA sometimes, where you can ask them those questions about, hey, how does it work in France? How does it work in Germany? For that.

And we'll be glad so that you don't have to deal with 3 to 5 CPAs with, accountants a month to talk to them directly for you. Right? If you hire a guy in Germany, would you up to help you with VAT registration over there? We'll deal with them. We'll talk with them.

We'll make sure that you're not one of the big work, big worry points, double pain, right. Sales tax and w with that. And we're saying, yeah, we'll make sure that we don't do that to save you money. And the other thing is make sure you'll just register and optimize able to sell those to those, to those countries. Well, Right.

Because one of the biggest fears that a lot of these owners come to us is, you know, what, what can I do to cut down on the amount of tax I'm paying or the amount of, of, of refiling is we're doing? Right. And it very comes to a personal business decision is that you have this amount of compliance, this amount of work in order to sell in this country. How much is your profitability for doing that? Is it worth your time?

Right. What is your, if you would move your advertising dollars, for example, all to the states or all to the certain country, all to Canada, for example, does that actually, you know, does the benefit outweigh the cons of doing that move? Right. Or is it the reverse where there's so much paperwork, so much compliance and so much of that, that you're like, Hey, maybe not worth expanding to another market. You know, the numbers don't support it.

Why do we put us on this headache to, to move in a year and maybe just, or maybe make another 10 to 12% more. Right. And yeah, that's, those are the questions that we want to answer, but don't evaluate work with their international account if needed and make sure there's, you know, there's certain tax treaties in place to to look out for those also. Right? So then what we're respecting them and and treating them correctly.

Mhmm.

It sounds like I need to have a podcast recording in the future. I'm just thinking out loud right now, but, like, because Shopify has a product. This is not necessarily in your wheelhouse, but you kinda know of this product because you like, so you're you're mostly dealing with, like, domestic American brands and businesses and and getting them to be tax compliant and and just helping them be a trusted adviser and giving recommendations and and future proofing and planning. But Shopify has a product called Markets, or Shopify Markets, and there's Markets Pro. And the benefits here is is become and I think it's powered by Global E, which I think is a software solution and a and a and a technology that becomes the merchant of record.

And it gives the legal responsibility for selling products to customers in different countries to adhere kinda these the local laws. And there's all the tax registration and all the remittance and local payment method, things like that. Local like, all that stuff is all supported kind of inside Shopify. So, you know, for a fee, I don't know, it's, like, you know, 4 or 5% or whatever it is. So it is definitely a margin loss.

So it's exactly what you said. Well, yes, you can go in international markets, and, yes, there is technology to be, you know, tax compliance and tax calculation and filing and things like that. That can all happen through a an international solution like Markets Pro. Absolutely. But it comes with a cost.

Absolutely. Yeah. Yeah. It does. Right?

So you gotta say, like, does that 5% plus the international processing fee, you know, plus the, the, possibly some boots on the ground, is that all worth, you know, expanding that international market there?

Correct. Yeah, absolutely. I think people dabble a bit and it's okay. Let's try Australia first. Let's just ship to Germany only and test out markets just to kinda see, and you can kinda check box, here's where we're shipping to, and then start your marketing efforts in those markets to see.

So

Yeah. It's it's exciting to say and express those ideas, like, you know, loudly and then maybe in a meeting, right, of upper management. Yeah. Yeah. But then we actually crunch the numbers, and I I hate to be like that black sheep and be like, hey, see, mister CEO, can you look at this first before, maybe executing on that plan?

Exactly. I wanna pivot a bit to a customer story. I hope we don't put you on the spot here, but I just I love hearing, like, real life stories of people that say, here's what they used to do in their shoebox of receipts. They found you in your organization, and, you know, and then you made a very impactful change in kind of, like, how they operate their business, being more tax compliant and thinking about that. So I just would love to hear it from your side of the table saying, what was the journey, maybe the challenges they may have faced?

And then how were you kind of instrumental in, you know, improving their growth or their improving their financial efficiencies?

Yeah. There's, there's tons of stories in that around Steve. I'm trying to think what will be good one. Yeah. So, well, probably going out any names, let's just say that this, this client, he sell.

They add back solution. Right. So something that helps help your back pain. Right. Go away.

I think you can imagine what kind of product I'm talking about.

Oh, yeah.

So I think, there were international client of ours. They go from Australia and they're there. They've been, they've been, I've been telling a lot for a while. Right. They kind of found the winning product, the winning ads.

Right. They've actually went viral on Facebook and Instagram, and they were just kind of humming along. I think they'd finally came to us all right around, I would say a year and a half mark of their business. Right. And I'm like, oh, this is a year and a half mark.

You know, how, how, how much could they be doing See, they were already doing about around $5,000,000 at that point. So they were, they were on a rocket ship. Right.

As you

can say, especially for a business coming around by for a year and a half. So I was like, dang. Yeah, that's awesome. And how, what is your concentration like? Like, oh, no, around 80, 90% in west?

Like, that's very high. That's very high. Okay. Yeah. And how many states have you registered in?

What is this registration you're talking about? Well, you know, you're, you're an e commerce business. Is this thing called economic nexus. Yeah. Do you know the concentration of sales in these states?

Another another, you know, blame, you know, sign off promotion on Zingy calls. Right? So, and long story short, right? I obviously this person did not know a lot of at the beginning. Right?

We, we worked with them for, for a good two and a half years after that. And we really helped reshape their understanding of just, you know, tax treaty date between US and Australia, how to optimize their business structure, right? Like a parent child relationship to, to help with that. Cause they also have an Australian corporation. Really negotiated with a lot of state departments about, Hey, here's my client.

You know, he did not know because he is international about all the registrations needed and he's very, you know, apologetic, but he's trying to do the right thing, being compliant. So we were able to get rid of at least $50,000 in penalties for them across the board to basically bring that down. Because they were, they were, they were triggering everywhere. I think at the end of the day, they had like like 33 states, right. That they had to do file and registration for.

So, because they would, they would just, they would just, they just went off. Right. They would just went off the charts. So, yeah. And that 2 years we also helped, like really clean up their, their books.

Right. And get into a state because they, they had a goal of selling. Right. Their whole thing was they're going to sell their business at a certain point and make sure that they have what we call investor level financials, which is presentable financials. Any investors look at understand the numbers, understand the multiples and can they'll get them offer.

And I can tell you, Steve, they're no longer a client, but it's good because they were able to sell their business for quite a bit of money. Right. Because, have their words. So they're not their former client hours, but, you know, I wish them well, I'm sure they're off on some golf course and joining some time right now, but who are they? Who are they?

I'll wait on their business. I don't I don't know. But it's it's been a year ago, but I'm sure they're doing very well with, the the profit that they made from from selling that.

That's lovely. Thanks for thanks for sharing that. I wanna talk about some narratives in the market because I I I accounting to me doesn't seem very sexy at all. No. It's not.

Necessary. I mean, that's the re typically why people are in business because there there has to be an exchange a financial exchange, and that's kinda how the business that's why you can have a headcount and employ people and be able to share your products. You know, it's just one of those things. So the the financial part, I I completely get it, but I have a funny suspicion that there's gonna be some misconceptions about taxes and tax compliance and deadlines and, like and so I'm gonna throw back to you if you wanna address any of these myths in your industry or anything you wanna address or anything you wanna debunk anything?

Yeah. I don't know what debunking, but, yeah, there's definitely a lot of, like, sayings, right, about tax and and bookkeeping and things like that. Right? I mean, I think the one the first ones that we always hear about is that, you know, the tax deadline, you know, the April 15, the March 15 time is the only time to think about taxes. And I just wanna mention that that is great if you're just a personal tax filer, right?

You're just working a W2 job. That's kind of all you have. Maybe you have a couple of investments. Cool. Use TurboTax.

You're good. You're good to go. Right? Right. But for the business owners out there who are in the 6, 7, 8 figure range, I'm hoping that that's not the only time you think about taxes.

And I'm hoping that you're not just hiring some, some tax preparer to do it. And also not some taco doesn't understand your industry. Doesn't understand how to get that taxing for you because there's tons left out there all the time, every year, like IRS makes $1,000,000,000 more right. Every year on taxes that clients don't take advantage of. Right.

Or taxpayers don't take advantage of and they're not going to give it back to you. They'd be like, cool. Thanks. We needed this money pay, pay off on debt. Right.

So for us, it's our job to kind of tell them, Hey, you know, I know it seems a little bit annoying, if you will, right? That we're like always giving you these monthly calls and Slack new, like, like advice and things like that. But we're doing it so that when we get to that tax filing period, your, your numbers optimize, your, your setup in QuickBooks is, you know, e commerce, you have e commerce chart of accounts, what we call it. Right? So it's very easy to tell where your deductions are coming from, where else can we get deduction from?

And there's things that we already took care of, because for example, in home, the home office tax deduction for business owners. Right. Because if they work from home, they don't have an office, which a lot of people who change in the COVID era don't. Right. They just work directly from home.

Yeah. They, they need to go set up their, their home in a way where they, they carve out an exclusive spot. Right. Yes. Just for their business and their footage.

Yeah, exactly. They, they have a garage dedicated to all their inventory, for example, that's another exclusive spot, especially if they don't, they don't park there. Right. And, and, and you should take advantage of that because that's a deduction you can take as a percentage of your total square footage, which would you so you you got to see Tory get steep. And you can you can get a lot a lot of money back that way.

Right? Due to amount of mortgage or rent payment you're making, utilities, you know, water, gas, electricity, you name it, and repair and maintenance at any day.

Even car. I mean, I I'm in a way. I think where you're able to write off, like, I think even for home based businesses, like, 6 days a month. You can write off your car if you're leasing a car, and there's, like, a

super interesting one. If you're if you're using your bit your business vehicle primarily for business, that's another great deduction that they should take advantage of. Or they just wanna say, Hey, we want to invest in equipment, a business, a piece of equipment, it could be a vehicle, could be, you know, any other equipment that they wanna buy. That is a big investment, a big something that we can accelerate for them is what we call it, right. A salarated deduction for them so that they can take it to go against their very profitable year that they've, that they've shown.

So all I have to say is, you know, that tax deadline thing is not for you, business owner down there. It's for the personal individuals out there. Right. And then the other one I want to mention is just how, like bookkeeping is born. I'm not gonna deny that.

Right. Steve, but keeping is not the most exciting thing, but it's like you said, it's necessary. It's needed. It's the way where it's the fundamental, the backbone of your numbers of your business is the way to tell how far you gotta go for this business is the way to, you know, have that core where your empire kind of grows from. Right.

Cause you understand your numbers. You're not running out of money. I think what we'll consent that basic principle. Right. You're not running out of money and your numbers support that fact.

Right. And, and I think it's boring and I get it. And that's why I think if it's, if you just don't have that side of you that want to look at numbers all the time and want to do that, just hire out, but find someone in your, in your field and your, you know, community that really understand your business, really can dig deep into the numbers and help you figure out and help you give the best recommendations that you can to grow it.

Yeah. It's amazing. So looking ahead, like like I know this is kind of a kind of a loaded question again, but there's quite a few emerging trends kind of that that I'm seeing right now, like just financial trends. And and so we have an election coming up

soon. There's

a lot of stuff going on. So I just from your perspective, it's just like, how do you believe that maybe ecommerce businesses how can they be prepared for this future? And and and and I wanna add to that saying that, you know, being in q one right now, we're rolling into q three soon, and people know that BFCM, this Black Friday, Cyber Monday, and into the holiday season, that's where the bulk of the money is being made in ecommerce. Hence, why they call it Black Friday, because that's kinda when it becomes profitable versus being in the red most of the year from you know? And so from your perspective, like, what sort of trends are you seeing, and then how can these businesses prepare now for this very looming future?

Yeah. Great question, Steve, and happy Prime Day for all the business owners out there, by the way.

Next 2 days. You got it.

Yeah. Yeah. I mean I mean, that's a great question. And I think there's there's a vast variety of topics we can kinda, you know, break down here.

Yeah.

Some things I wanna focus, and this is something I'm I'm sure you heard a lot is, you know, you, you should invest in some of the AI ness out there, right? AI software automation is available. Take advantage of it. Don't be scared of it. There's, it comes in a lot of shapes and forms, right?

Some are operating things. Some are, you know, things that could help your customer service stack. Right. Maybe you can use that instead of having hiring someone out like outsourced contractor and really take advantage of that. Cause you know, that's, that's kind of the way the future we're looking at right now.

Right. All industries, you can, you can see the, you can see the trending in the market right now is all kind of, kind of, kind of going toward that direction, even for us, you know, we're, we're changing up some of our stacks. Yeah, we, we should do things more automated. We should do things where we're not all the processes are not as manageable as we go into it. Right.

And I

would say the other day is just really diversified your suppliers. Right. I have had a lot of, a lot of scary conversation with clients who are, who are like, oh man, if this, if this, you know, supplier don't answer me back the next 2 days, I'm in deep trouble. Right. Or if this supplier, like keep raising my prices is not sustainable.

I have to go out in business and you never want to be in that situation. Right. You should have 2 to 3, 5 suppliers on queue saying, hey, I need to be at this price. If you can't get me this, I'm a go with these guys, right? And you, you gotta turn the table on them.

It's like, hey, I have gone to this volume. I have, I made you like this much money this year. If you, if you wanted to let go of my business, sure. Let's cut it. I mean, let me turn to these guys.

Right. And you have to be ready to put them to say no also. Right. You can't be, there's a scare tactic. And then, you know, you kind of have a look there.

You have to be prepared to always be negotiating, always be ready for, you know, for that, that your inventory is not be cut because you're dependent on the supply relationship and there's only been one. Right. And the last thing I would say is just the pricing strategies and

you kind

of touched upon this, right, Steve? Like there's a lot of competition out there. A lot of both kind of selling similar products. Right. And there's a lot of these sales dates, like right now during Prime Day or during Cyber Monday and Black Friday, your ability to be flexible, your ability to do A and B testing, right.

To see what market will respond to certain pricing. How, what is your pricing sensitivity on your product? It's really gonna turn you in into a winner. Right. And your, your, your, you and your creative use right now, I would say influencer marketing is a big thing right now.

Your creative use of influencer marketing, you know, using TikTok, which is a big platform right now. Yeah. It's it's gonna be huge. Right? And understanding, like, you know, a price that sells well on, you know, TikTok shop, maybe what will not work on Shopify or your own website with Amazon is gonna be very important in your understanding of a CEO on how to manage price out there.

It's interesting though you mentioned about these different types of pricing tools. I've I've had quite a few partners on. Pricing is 1, and Price2Spy is another one where they, you know, will automatically make price adjustments based on competitors' pricing or market conditions and, you know, inventory levels and market demand. It's so interesting. And, you know, there's a lot of AB testing in there too where understanding a session tracking, and you come to the and this is mostly for commodity products.

Right. Or maybe not, like, wholly branded products, stuff like that. But it's so interesting that there are tools and software out there that can really help you make good competitive decisions and set and maybe not necessarily just cost plus pricing. I think there's a lot more to it that it's more than just, you know, cost of goods plus a, you know, a markup. I think there's a there's much more of a process into into that.

And that sounds like in your wheelhouse too. I think it's all part of what you offer. I think overall when you're looking at a business and its profitability and just saying, hey. We understand that the net new customer cost per acquisition is very high right now. And so we understand that.

And so maybe it comes back to getting a better wholesale price, or maybe it means creating bundles so you can raise your price and offer a package so that the basket size is larger, which equals more net profit per transaction. And, like, this is in your wheelhouse. This is how I believe you help merchants.

Oh, yeah. That that last paragraph you just said, Steve, I'm sure it helped ton of business out there. Right? No. I'm serious.

Right? Bundling pricing is a great, great strategy.

Right?

Because bundling prices make the value of the product just seem so much higher to consumers out there. Right. Just like, look, I'm getting 2 or 3 things or a free ebook. Right. And all these things you can add onto it.

And it doesn't cost you that much, but gives great value to, to the consumers. And I think that that's a great tool they can use. Right. And all these these pricing tools out there, I'm sure there are a lot of more maybe like AI branded now. Right?

They are. To to help them with their their pricing strategy, and and that's that's a great way forward too.

This is lovely. So before we kinda wrap up for today, I've I've learned a lot. I got a lot of notes here. I mean, as boring as it is, I still have 2 pages of notes. So that's, you know, that that's important.

Like, I mean, I'm seeing some of the things that you do. I know you're being very impactful for the people that you are working with. That's why you're on the show today, just to educate people that, hey. There are CPAs out there. You know, free cash flow, your company, you're here putting your flag in the sand and saying, like, I really want to and continue to help Shopify, ecommerce merchants because you were once a merchant yourself.

You kinda get the anxieties that go along with that. What do you think some of the next steps are for our listeners that wanna kinda tap into your expertise or wanna learn specifically, like, what could an engagement look like with you and what the next steps could be?

Yeah. Absolutely, Steve. So, like, for us, we really do wanna provide that that community aspect

for a lot of

e commerce owners out there. A lot of people who are aspiring, entrepreneurs. Right. So we do put out quite a few, blogs a month on our website. Okay.

They're free, obviously feel free to check them out. So then they get education on, on different things about tax bookkeeping, pricing, everything in between. Right. And if there's a topic that people like or comment on, we would try to write on that to those topics too. And we also try to partner with a lot of people who are just in the e commerce world.

You know, Badger was one of the partners that we do guest posts with so that we, we really, we really liked them and that they really are in a belief of, of this kind of education too. And then if you're just a business who are, you know, listening to this and thinking, wow, we could do a little bit more to grow our business or to optimize tax. Well, we're not happy with the amount of taxing we got last year, but anything in between, right. Just good way to book a call with with us. I'm sure Steve can, put up my link and, my podcast description.

But, we were happy to to do this partnership with with Fastlane too on podcast to offer a diagnostic call with them where we can kind of deep dive into their numbers, and we'll we'll retake a look at, you know, come the pain point you guys are facing or some of the gaps guys have and, you know, provide that as complimentary service.

Oh, that's lovely. So I'll have ecommercefastlane.comforward/ free cash flow, all one word, that'll redirect to your landing page, which I see here is available. And there, you can take Alan up on that offer. I think it's, it certainly work. It's it's I mean, it's a free strategy session.

At the end of the day, it's just like, you get to see if, you know, where you at today, you get to leverage, you know, the 20 years of experience, that Allan brings to the table, and then this way, you get to find out where is my business today, what's your long term growth plans, what's your burn rate, what's the margin, what's your head count, like, there's a lot there's a lot of moving parts and a lot of levers to be pulled, and I think that's where you kinda fit in there. You really become a trusted adviser, almost a recommendation engine saying, hey. We here's how we believe we can help you because we've seen this with other brands. And so I think it's really exciting that you're offering that service.

Absolutely, Steve. And a whole lot of it is we wanna keep more of your profit back in your back pocket. That's what I'm saying. No. Yes.

I love that. That's cool. Well, Alan, thank you so much for recording today. I know, you know, once again, tax is not necessarily supposed to be sexy topic, but it it it it it just it can be boring for some, but it's necessary. It's part of being a great operator is having some financial literacy.

Clearly, if you don't already have it, you can outsource it to you and your organization, and that's why I wanted to have you on because I just think it's a gap missing in a lot of entrepreneurs kind of toolbox of, you know, some people are really good marketers and good product people, but they're not really good financial people. And I think having you in their back pocket is quite helpful. So once again, thanks for coming on the show.

Yeah. Yeah. I appreciate that, Steve, and thank you for the opportunity. Had a great time. Take care.

Well, Well, that's it for today's episode. I'd like to thank you personally for being a loyal listener of Ecommerce Fastlane. It's my hope that this podcast is offering you a ton of value through growth strategies, tactics, and exclusive insider tips on the best Shopify apps and marketing platforms, all with my personal goal to help you build, manage, grow, and scale a successful and thriving company powered by Shopify. Thanks for investing some time today and listening to the show. I'm so proud and excited that you have a growth mindset and are a constant learner.

I truly appreciate you and your entrepreneurial journey. Enjoy the rest of the week, and keep thriving with Shopify.