Articles & Podcast Episodes

Talk-Commerce-Irina Poddubnaia

Win More Customers By Providing The Ultimate Post Purchase Experience with Irina Poddubnaia

Think about the last time you placed an order on an e-commerce site. You get a confirmation email, and what’s in it? Usually, only shipping and fulfillment information.

Most online stores provide limited information and miss an excellent opportunity to upsell customers when they are not expecting to be up-sold.

Irina Poddubnaia tells us how her solution helps store owners maximize their transactional emails and turn them into marketing contact points.

Transcript

Brent: Welcome to Tak Commerce. Today I have Irina Pad. Please go ahead, introduce yourself. Pronounce your name the way it’s supposed to be pronounced. Tell us your day-to-day role and may be one of your passions in life. 

Irina: All right. Thank you Brent. My name is Irina Pad. I’m from Bulgaria and I’m the founder of Trackage Dot.

Irina: We help entrepreneurs with post-purchase customer experience. So basically everything that happens after the buy button is Preston in eCommerce store. And when it comes to passions right now it’s public speaking and everything that’s related speak, just speaking and speak and singing as well.

Irina: So that’s one of my passions right now. 

Brent: Oh, awesome. Are you gonna sing for us? . 

Irina: It depends. , we’ll do one thing here, . 

Brent: We’ll leave that, we’ll leave it right to the end. So I did warn you that I have a project called The Free Joke Project, and maybe we should, we could do the free song project next, but we’ll do the free Pro Joke project.

Brent: All I’m going to do is tell you a joke and you can tell me if that joke should be free or if it’s one that we could charge. And since you did mention singing, I found a joke that has at least some reference to singing in it. Here we go. Did you know Mortal Combat is based on an old Scandinavian church song?

Brent: It’s a Finn Hymn.

Irina: That’s a good one. I I don’t know about if you should charge for it, but that’s a good. 

Brent: All right I’ll just one more quick one. Why is Pavlov’s hair so soft? Because he conditions it. Yeah, I know. They’re all really bad. I apologize. All right. So wouldn’t say that 

Irina: they’re bad. I’m just saying that Yeah.

Irina: This is like the hi and intellectual humor. It’s not 

Brent: just like it’s only for sas. That’s, it has to be smart people. All right. So let’s talk about PO I, I’m very interested in post transactional data and how you can get people and we are a magenta agency. My day job is work running a magenta agency and we’ve done a lot of work where in the card after they check after they ac even after they pay.

Brent: We like sometimes would the customers would like to hold that transaction and get ’em to buy something more. So tell us a little bit about your. And how it helps people post transaction. 

Irina: So what we do is basically, so I can just start from the beginning. 

Irina: And why they do that, because the conversion is from five to 10% of extra sales just from looking at the order status. So we helped like we literally just took this functionality and made it available outside of Amazon. So you can plug it into your store. That’s built with Shopify Commerce.

Irina: Magenta is in the plans. We don’t have a direct. , but we do have an integration with Zapier. So it’s possible to pass the data. So what it creates is it creates a tracking page where customers can see additional products the actual information about where order and when it’s coming to them and also the brand and social media accounts and the delivery information, whatever you want to put on the page.

Irina: It’s 100% customiz. And you can change all the bits and pieces of it. So it’s a drag and drop builder where you can literally just customize everything. So one other thing that I didn’t mention is that also those pages, they have localization. So if a customer is from a different country or if you are shipping internationally you can just customize the page with specific language.

Irina: That’s that’s region. Because we support customized emails as well. So emails can be in their local language when the tracking page can be in local language. So the entire thing. So what Trackage does is we are helping the customers not only understand with the like the package is coming to them, but also to see additional products while we’re where.

Irina: Browsing for the information they were actually looking for. So that’s how we help e-commerce stores bridge the communication gap and also lower the customer support load because people don’t have to ask the the question, the fail the question, like, where is my order? Where is my package?

Irina: That overloads customer support and e-commerce, so they don’t have to ask because it’s already answered. . 

Brent: So tell us some numbers. Do you have some hard numbers that kind of show how successful this is in terms of, it brings a lift on post transactional purchases by 10% or 15 or whatever that number is?

Brent: Yeah. And then all the secondary part of that question is, do you rely on discounts or coupons or anything else to bring in or do people just buying. 

Irina: Okay. I can tell you about our numbers currently. First thing that we measured is the open rate for the post-purchase emails that talk about the status of the order.

Irina: So basically we’ve seen the open rates around 60%. So that’s way higher than any marketing emails that you. . Another thing is that like from those emails customers, they visit the tracking pages one or two times per day when they are actually actively waiting for the order. Instead of just going through the email every time they just save the link and they go and visit it one or two times.

Irina: So during that time various sliders so what we’ve seen that then the sliders were. The conversion rate wasn’t that high. It was around like four, 5%, like it was on the lower end, but when they made them animated and they started moving the conversion rate raised to around 12, 10, 10, 12%.

Irina: Customers were actually, when we are waiting for the order, they literally have nothing to do. And they want to get the package repair waiting. But they don’t know how to facilitate that process. So instead, they are li left with just some free time and they start browsing the product.

Irina: And if the products are interesting the customers are buying. So we’ve worked with this influencer. They are creating an animated series. And this katoon gathered a very passionate fan base with free million follow. . It’s called Metal Family. If you want, you can check it out.

Irina: Like very cooling. And they have remarkable sense of humor, , so I would say so, and this fan base they were like when they launched their first comic book they were not prepared to handle like the amount of orders they were going to get because they printed the whole batch of 10,000.

Irina: And it was sold instead of two months. How we were projecting it was sold in one week, and after that they had to fulfill everything and what they’ve seen. So from those 10,000 orders like originally, wasn’t there, but we joined in be middle of this process. So from those 10,000 orders we’ve seen around 7% extra sales.

Irina: So that result around like 700 or that’s exactly what it. And so 700 text orders from the tracking page directly, but then we don’t measure the indirect sales. Some of the customers we were going through the logo to the website, we were going through the social media and then back to the website.

Irina: So that’s like the indirect conversion. So maybe it’s around 15% or something like that because we didn’t have the detailed analytics at that point. And what happened then? , the customers were waiting and instead of writing to customer support like they previously did because metal family, they were overwhelmed with the amount of questions they got.

Irina: Because the customers, they were, again, you can imagine this is a Katoon series. What kind of immature customers were there? So very immature customers were sending messages to all the social media accounts. We knew five messages from one customer, like every. . So they had to ease that pain.

Irina: So we had to ease that pain for them because once the emails started get going out and people were getting proactive communication, they stopped asking the questions and the customer support just co I don’t know, side with relief because all that enormous I don’t know, like a ton of sta questions.

Irina: Like it just went. So after that happened and the last bit of functionality and what we also helped metal family with was getting reviews. So at the end of the purchasing experience when the customer actually gets the order they, they experience this I dunno, like burst of enden when they open the package and they finally see the thing that we ordered.

Irina: And it’s the perfect moment to ask for a review. Because in most cases with what I’ve seen with e-commerce stores, they use just timed automation. So in two weeks there is an email that goes out asking for review. But what if in two weeks your customer hasn’t received the order yet?

Irina: And that happened to me a couple of times when I ordered from China or sometime from us. Like it, literally, like it asked me for a review when I didn’t yet get the product and when I’m fighting with the customs to get it out of , outta the post office. The idea is, so what we did, we configured the automation, the standard one and it started asking for reviews and every fifth customer left the review around five stars.

Irina: So that was 2,150 reviews from 10,000. . That’s enormous, I would say. And those reviews they can be used on the product pages, on the, I mean on the store itself and on social media. So there are a lot of ways how you can capitalize on social proof. 

Brent: So the social is the, is that how you leverage other customers to bring in 

Irina: more customers?

Irina: Yes. And we have one feature that is like the killer feature, but it’s not yet. Then the customer review is four stars and more. I think we’re going to make it configurable so that you can adjust the threshold. So if review is positive we will ask the customer to share it on social media with reach media, for example like video or a photo of them interacting with the product.

Irina: So let’s going to probably get some sales from. I’ve seen some companies that were capitalizing just on oh, you were going to post review anyway. How about you get some like some money from the brand that you’re posting it for? So yeah, there are quite a few companies that are focusing on TikTok commerce.

Brent: Yeah. Are you focusing then on making are, so they get an email and then they go and open up the email to go to this, to, to the custom tracking page or? Custom tracking page that you’re generating automatically there right 

Irina: after checkout. The custom tracking page is going to be available the entire time how it’s set up like technically.

Irina: When the store signs up the trackage and they install one of the apps, or they just configuring integration with like the third party. . We will get the tracking page inside of Trackage and you can create multiple tracking pages. By the way if you are promoting different things or if you have different brands.

Irina: So you can configure tracking pages for every occasion. And the tracking page, it’s standalone. You can put it on your custom domain or you can use trackage domain and you can plug it in anywhere. It’s responsive, so on mobile and on desktop, which works seamlessly. The idea is that page is always there, but the content based on who is looking at that page changes.

Irina: So they can look by the order number or by the tracking number that they got. And if we don’t remember both, they can enter their email and they’re going to get an email from Trackage that’s going to send them their tracking page. So this way we. Just this is a security feature. Because if we were allowing them to just look up any email, that’s not a very secure 

Brent: feature.

Brent: Yeah, that makes sense. I’m interested in your own journey. In your bio that you moved to China without speaking Chinese, and you ran a fulfillment company and then you now. You’ve launched the SAS company remotely without any funding. Tell us a little bit about that journey.

Brent: Like how did you end up in China and then are you back in Bulgaria now? 

Irina: Yes. I’m back in Bulgaria for the last six years. And that journey to China, it started just by me feeling adventurous. I. Because at some point in my life I was just working in an office I was selling frozen berries in bulk.

Irina: So it wasn’t a very exciting job to tell you the, like to tell you the truth. And at that point I thought that I knew everything about commerce and how videos are done because I was selling the. , like ev, everything, like in trucks and even higher amounts. So we, we had never sold any ships, by the way, because that’s a lot but the trucks, yeah.

Irina: And I thought that I understood everything like with bills of lading how the deals are them, how to accept the payments, invoicing, everything. But that wasn’t, When they came to China we found the the variety of suppliers of everything you could imagine. There were literally plazas.

Irina: Those are skyscrapers of like full to the brim with goods of various kinds, like a plaza for smartphone accessories. That’s not an exaggeration where it is a whole city of like smartphone accessories. You could literally just find everything. What we realized at that point was that it’s not about the suppliers, it’s about the customers, because we didn’t have that many customers at that point.

Irina: When when we came to China and we found all the suppliers, we found how to work with them. We figured everything out. We still were forced to understand marketing, to reach out to customers, to do the prospecting selling, and that’s. and that’s how we were surviving. So we figured out the pay dads and it was the full experience because we had to survive based on how well the business performed.

Irina: We didn’t take any funding ever. We didn’t even know what was a possibility. That’s right. . So that’s how my like Chinese adventures came to an end when we lost one of our biggest customers. And then we felt like overwhelmed with all evaporations and like packaging the boxes. Because again, for two and a half years my main occupation was to go to a warehouse to accept the goods, to pack the goods, to ship it to the logistics company, to negotiate with suppliers check.

Irina: And I even stopped speaking English that much just because we were working with Europe and like it wasn’t necessary. And I, like all the time I was exposed to Chinese, so my English kind of went. . So yeah, at some point I realized that’s not what I want to do in life. I wasn’t born to package boxes.

Irina: That’s not something that I want to do. And that’s when this part of with Johnny ended and after that we moved back to Bulgaria. We. like we were. Yeah, at that point we were very discouraged because like we attempted to work, we attempted to create our own business. It wasn’t the next Amazon unfortunately, or even the next early express.

Irina: It wasn’t like. Yeah. And that’s when we realized that we could do something with the tools that we developed for ourselves while we were in. So everything from inventory, acceptance keeping track of all the shipments keeping track of all the orders and yeah, we just wanted to bring all the experience with Beca to a better cause and make it available for our e-commerce entrepreneurs to use.

Irina: So that’s how Trackage was born. And that’s how it’s still there . . 

Brent: Yeah. It’s interesting that a lot of these great there’s a lot of great tools that get developed in-house and then suddenly the entrepreneur who’s selling something realize that they have a great CRM or inventory management or whatever that tool is, that software tool, and suddenly they’ve decided their own, their old business is no good and here’s much better business.

Brent: Do you feel as though. Branching into a whole new culture helped you be more competitive. I just did working in China help you be a better entrepreneur when you went back to Bulgaria? 

Irina: You know what I definitely can say uh, happened is that I lost my like rose tinted glasses. So I started actually looking realistically at the world of business and.

Irina: it’s un like we, like at the beginning of a journey, we lost unfathomable amount of money. Like with just purchasing own goods or just, I dunno, like the logistics partner losing the packages and who knows what else. We experienced all the hardships of working with people that we didn’t know anything about.

Irina: And we didn’t have experience with all those different products that were ordered from us because we literally offered to buy anything from China, from us. And that’s that was probably a mistake right now I realize it was probably a mistake. We should have niche down. We should have just studied with niche, understood the quality requirements found with West suppliers, and then just scaled that.

Irina: But instead, we just went broad and developed the tools instead of developing the. . But again that’s a learning experience. I I will never say that. I’m not glad it happened. And after that I now realize how important that is to understand the customer before the supplier, because there are a lot of suppliers, but the customers, they are the backbone of a business.

Irina: And if you don’t have any sales, you don’t have a. That’s 

Brent: easy. One. One of my experiences with buying products from China is that documentation is often just Google translated. Do you find that same type of, did you find that, say I’m assuming you sold products to Bulgaria and it was maybe they put, they did a Google translate into Bul.

Brent: Into Bulgarian and nobody actually, no humid actually read. read the text. Is that something that is overlooked in China or is it something that that people just don’t think is important? I’m, and I’m just saying specifically language, like we, you get some products that are coming from China that are just translated into English, and it’s clear it was done through a machine.

Brent: It wasn’t nobody actually read it. Who’s an English? 

Irina: Yeah. In case of our deals I was translating everything, so that wasn’t the case. So yes, I did remember when we got some materials, they were very poorly translated. And I did have to, I did have to spend a lot of time to adjust, rewarding and to literally make something out of.

Irina: The cluster of words or keywords that I received as specification. So that was fixed by me, basically. And I remember how we were creating all the documents just because we were requirements of the customs, not because the suppliers provided them from the suppliers. We literally got big thank you and the goods

Irina: That’s all we got from it. So yeah I believe the problem literally exists. But I think with AI tools that are currently on the market, you can adjust that. And the translation tools were also getting better. Then we were in China communication was done just for the mobile phones.

Irina: We were writing in English and showing them some Chinese characters and they underst. I think right now it’s, it would be through Google Speech or something like I’m going to talk to the tool I dunno, Skype maybe. They introduced some on the fly translation. So I think right now it’s much easier to communicate anywhere in the world.

Irina: But at that point it was challenging. 

Brent: So your experience coming outta China and then into Track Ma and. I know one thing you’ve said about Trackage is it helps the merchant put their store more on autopilot. Just can you explain how it, how that works and how it, I know you’ve said that there’s less customer service involved, but it can’t always be a hundred percent autopilot.

Irina: That’s why we’re not saying that 100% of customer support requests are going to be automated because if the customer has a question about the size chart or about the customs clearance or something like something was shipped to wrong location, you still need to have customer support and you need to reply to those customers.

Irina: But all the repetitive questions, the ones that can be answered by robots, Like the, where is my order? The limo request. That that one can definitely be automated. And with automation, literally, nobody’s going to ask you that question because it’s not going to be an issue for the customer.

Irina: They are already going to know when, like, when the order is coming, where is it where is it coming from? I know what carrier it’s shipped through. And also they will have information about the delivery, very funds, whatever information you want to put on the tracking page because the more information you give to your customers will less likely they are going to reach out.

Irina: Whereas some illiterate people who are still going to go to customer support and ask a question, I I totally understand that there is going to be a percentage of people who are still going to not understand what’s going. But that percentage is going to be minuscule compared to the previous amount.

Irina: So that’s just like the customer support side. A lot of automation is also coming from operation side. So for example, with chi, with Chinese suppliers we had to deal with this interesting situation where the supplier is providing you with a tracking number or the information about the.

Irina: But then the tracking number doesn’t have any tracking information, so that means the tracking number is either incorrect or the product has not been shipped. And if for example, this situation is left unattended for a week or two, the customer is going to get anxious, we are going to start asking for very money back.

Irina: So we had to monitor all of that. And that’s how in Trackage we have two counters. They is an idle and they in. So days in I is counting until the package is actually moving. So until the status in transit appears on the package. And the other one days in transit is counting how many days it’s in transit whatever the package got lost in the post.

Irina: So this way the business can proactively reach out to those customers who were unfortunate enough to experience a deliver. And if it’s in the initial stage of communication with the supplier, they can reach out to the supplier and ask like, where is the package, when they’re going to ship it?

Irina: And if a supplier is unresponsive for where is an issue, they can even refund it and find an our supplier to buy product from. That’s specifically handy for a drop shipps for hours. It’s not we handy, but still you can poke your suppliers or even knock at where doors and. what package it should have been shipped three days ago.

Irina: What’s going on? 

Brent: Yeah, a really good point. A lot of ERPs will generate a tracking. They’ll generate, the package has been shipped even before it gets to the post office, or UPS picks it up and UPS doesn’t assign a tracking number until they’ve actually taken possession of the package.

Brent: So that’s a great feature right now, yeah. And if you were to offer some, bit of advice to a merchant going into the holidays right now what could they still do and what should they be doing after the holidays? 

Irina: The holiday season is rather challenging for commerce, so it just literally creates an overload of shipments and overload of everything like processing.

Irina: So I guess , my, like most straightforward advice ladies keep saying keep calm , because this is going to pass, but right now you need to operate at 100% efficiency, 100% capacity. So I guess that’s so that’s wise. But after the holiday season is. You can examine and do some postmortems for some of the problems that you experienced during the holiday season.

Irina: You can see which carriers failed which carriers you might want to replace with an alternative one. . I know that on social media, there are quite a few people who are talking about diversifying the shipment volume between not just FedEx, u Ps like the like the two major carriers.

Irina: You could try our ones and see if this improves your cost per shipment or the cost like the overall margin as well. So another thing would be to evaluate your customer support after the. And see where the customer support might have failed or might have failed the communication with the customers.

Irina: Because usually during holidays people want to buy presents and if they become very sensitive to the timelines of a shipment. So if a person is not going to get their Christmas socks, for example, we’re going to be very upset. And the customer support needs to handle that and be mentally prepared that we are going to be customers with delayed.

Irina: Yeah. And the most interesting part would be to evaluate your systems overall. So once the holiday season is over, once you see over weak points where the systems are not working as you expected them to, you can definitely I dunno. Start evaluating which systems are lacking in your tech stack.

Irina: Maybe tech majors lacking Yeah. Something of a similar fashion where you can see all the orders and all evaporations on one page and understand where you are still not efficient enough. So just basically do the fine tuning when it’s below season in January or in February.

Irina: It’s the best time. Start implementing some new changes because during the holiday season, you will not have the opportunity to do that. 

Brent: Yeah that’s really good advice. Never make changes during the holidays or after October, maybe. code lockdown for people who do on-prem software. Irina. When we close out the podcast, I give everybody a chance to do a shameless plug about anything you’d like.

Brent: What would you like to plug? 

Irina: All right. I would like to gift the listeners of top Commerce Podcast the free resource. It’s called How to Get five to 10% Extra Sales from existing Customers without spending more money on ads or hiring more staff. In this book you can see like all the key ingredients for creating the best post-purchase experience for your customer.

Irina: And definitely you will understand what things are lacking in your current post-purchase experience. And you can either implement them yourself or maybe use Trackage for that purpose. Yeah. And you can find it at trackage.com, slash flywheel dash extra sales. And I hope that in the show notes you can also find.

Irina: . Yeah. 

Brent: Yeah. I’ll put all those I’ll put all the, all your links in the show notes how they can get in contact with you and and and of course track ma.com. Thank you, ARITA. Thank you so much for being here. It’s been such a pleasure. Thank you for staying up late. And thank you.

Brent: It’s my pleasure.

Irina: I love talking about e-commerce and what you can improve in your supply chain and post-purchase experience. Thank you for the opportunity.

Thank you to Podcagent for the wonderful guest!

What is Shopware

What is Shopware

Shopware is a powerful, On-Prem (Self-Hosted), PaaS, and SaaS cloud-based ecommerce platform designed to help businesses build and grow their online stores.

Talk-Commerce-Alejandra Santos

Looking Forward in Finance with Alejandra Santos

Have you ever wondered what the difference is between an accountant and a finance person?

An accountant looks backward, and a finance person looks forward.

Alejandro Santos helps us to understand the complexities and the simplicities in accounting, why you should be looking forward more than you should be looking backward, and how vital that finance person is in your organization.

Transcript

[00:02:46] Brent: Welcome to this episode of Talk Commerce. Today I have Alejandra Santos. Alejandra is the c e o and founder of Startup Tandem. Alejandra, go ahead, do an introduction better than I just did. Maybe tell us your day-to-day role in one of your passions in life. 

[00:03:03] Alejandra: Oh, thank you so much Brent, for the introduction and for having me here.

[00:03:06] Alejandra: I am very excited for today’s episode. So my day-to-day means a lot of meetings, talking to clients and steering them into good practices with their financial. And with the finances in their business, and taking long walks along the beach with my dog and , trying, if I have the opportunity to take a meeting to the beach, I will absolutely do that as well.

[00:03:27] Alejandra: And a passion of mine. I just, I have so many, but I’m gonna say since we’re talking about dogs, passion is to rescue all the ducks from the streets and put them in beautiful homes. . 

[00:03:36] Brent: That’s a, that is a great, that’s a great venture to do. All right, so Alejandra, I did warn you that I’m going to do this free joke project.

[00:03:43] Brent: I’m gonna tell you a joke and you could just tell me if you feel as though the joke should be continue to be free, or if you feel like we could charge for the joke at some point. Okay. Here we go. Never date a tennis player. Love means nothing to.

[00:04:01] Alejandra: I think that one’s free. Okay, , 

[00:04:04] Brent: thanks. Thank you so much. All right, so Startup Tandem. Tell us a little bit about how you started Startup Tandem, and why you started it. 

[00:04:13] Alejandra: Yeah, so thank you for that brand. Startup tandem. I’ve been doing accounting and finance for 15 plus years. I actually bred into it after I gra I graduated college, I did the wealth management, and then I went into corporations, big companies, nonprofits, and it was when I moved to California that I went into entrepreneurship as an employee.

[00:04:32] Alejandra: Internal employee is an external consultant working for. One of the competitors, not what it is now, a competitor of mine. And it was there that I realized a big gap that existed between the services that were provided, two entrepreneurs when they were building their businesses to exactly what, the price was for those services.

[00:04:50] Alejandra: And it just didn’t make any sense to me. So that’s why I created Startup Tandem. A startup Tandem is a supportive partner of four entrepreneurs in when they’re in their. To start a business and as a startups and all the growth level, that maturity, some clients are making 80 million in revenue.

[00:05:07] Alejandra: Some other ones are making one $50,000 in gross revenue. It just, it really doesn’t matter where you are in your journey. We are committed to become that partner that can set you up at least with a good infrastructure and take you all the way until you scale or until you’re ready to hire internally. So that’s exactly what we do.

[00:05:23] Alejandra: We set up entrepreneurs with the tools and the resources. to help them in their finance journey and not just, give them whatever service. It’s not a one size fits all. It’s customized to its company’s growth. 

[00:05:35] Brent: When you start with an entrepreneur or a new business, do you see them making common mistakes in, in, in their accounting practices or bookkeeping, things like 

[00:05:44] Alejandra: that?

[00:05:45] Alejandra: A hundred percent. So one of the biggest pitfalls that I see is that they’re not on top of, Just general bookkeeping. And they don’t have really good policies in place. By that means that there’s no AR policy or AP PO policy approval policies in place. There’s a lot of personal expenses go flowing through the company.

[00:06:03] Alejandra: And, They do their taxation, their taxes according to their bank statements rather than a financial statement. And it’s not really until they have the urge to bring an external investor, an external partner, or they’re trying to get into a very big line of credit or some kind of debt financing that actually puts them urgency.

[00:06:22] Alejandra: To, wow, I gotta clean my financials now because we’re gonna look at that. And at that time, at that moment, you’re really 10 years into the business or five years into the business, and you’re looking at a high cost. Just to go there backwards and then forward to clean those financials is a big mess and it takes a lot of money out of your pocket.

[00:06:42] Brent: Do you find that a lot of entrepreneurs aren’t necessarily versed in accounting and maybe they don’t underst. what payables are and what receivables are and even the sense that, hey, I’m suddenly, I’m amount of money, but I have a whole bunch of inventory to you. Help them with some of those 

[00:06:58] Alejandra: pieces.

[00:06:59] Alejandra: Oh, 100%. And yes, what we do, a big portion of what we do with our marketing and resources that we offer is education. Just because that is a thing that we do see in the industry. There is no urgency in. in financials, in financial management, in accounting, and knowing what your numbers are. So a lot of it goes with educational videos, educational resources, why you should do it, why it works, why you should, this is a big component of your business.

[00:07:27] Alejandra: We. Definitely focus on that as an early stage company. Even though you cannot afford, if you cannot afford a full service yourself, we definitely wanna set you up with the tools and infrastructure, the policies to help you get into a good regimen. And, if you wanna do it yourself, you can, do it yourself, but at least you have something to go buy.

[00:07:47] Alejandra: And then when it comes to inventory, that’s a big pitfall that I see, especially for e-commerce companies, startups, and businesses, is. They don’t have just with the basics, they don’t have a really good skew numbing clutcher. Which that means it’s like products. Some products don’t even have a skew, so it’s really hard to even track down what the levels of that skew is or that inventory product is if you don’t even have a good traceability on it.

[00:08:11] Alejandra: So yeah, there is a lot of things that I see pitfalls, but there is a lot of things that also systems and very low budget resources and tools can. Entrepreneurs gear to the right position. 

[00:08:24] Brent: You see a lot of entrepreneurs doing books or doing their bookkeeping as the last thing they wanna worry about, they just get it done.

[00:08:32] Brent: And I, you had mentioned that they just go off bank statements for reconciling they’re not doing cash flow reports and there’s so many more things that are involved in there. How do you educate ’em on some of those? . 

[00:08:42] Alejandra: So yeah, it’s really interesting. I get a lot of clients at the end of the year because they’re getting ready for tax season, and one of the big things that I get is, oh my God, my books are a mess.

[00:08:52] Alejandra: I don’t even have a set of accounts. Can you please help me out? Cuz the tax season is coming. And it’s great. Yes, we can definitely do that. However, When I asked them those questions that you just did, okay, so what is your cash burn? What is the biggest driver of your cash burn? What, those are the things that you have to know in order to make the right strategic decisions in your business.

[00:09:11] Alejandra: You gotta know all those drivers. You gotta know all those KPIs. So when I make those questions to them, it’s it goes like an. in the brain. Oof. Okay. I don’t know those things. Maybe I should know them. Yes, abso a hundred percent. And I try to get because in numbers it’s not for everybody, and especially when you are a business owner and you’re creating this amazing product, you’re very creative. You probably don’t wanna talk numbers. So when you’re very creative, I try to talk, in the level. Whoever is in front of me to educate them, okay, maybe you do need to know what’s causing that burn, because if you know that you can control that, you could probably put that money into this instead.

[00:09:50] Alejandra: Product development or a marketing expense, something that’s gonna drive revenue up, and that’s when they realize, okay, I do need to be more diligent with my financials. 

[00:10:02] Brent: are some, are there some basic from an educational standpoint that you help them with and say just in reporting balance sheet, p and l, cash flow statement, are there some just basics that every entrepreneur should know before they even start?

[00:10:15] Alejandra: Before they even start? Yeah, that’s a good one. . I even have friends that entrepreneurs, and I tell them all the time, get your stuff together before, please don’t give it to me like that. The first thing I say is try treat your business as a business. And your personal is your personal business.

[00:10:28] Alejandra: A business is basic. Don’t run your. Personal expenses through the business is just at the end of the day, you gotta look at the big picture. And if the big picture is, I’m gonna sell my company in five, six years, guess what? They’re gonna be looking at those ebitda. They’re gonna look at operational income and they’re gonna see what’s flowing down there.

[00:10:46] Alejandra: And if you put all their personal expenses flowing, it’s gonna destroy the valuation of your company. So I try, just keep the big picture, even if you don’t understand the technicality of it, just keep the big picture in mind as soon as you have a business. Go with the, goal. I’m gonna sell my business.

[00:11:01] Alejandra: I’m gonna go an I P O, and then work towards that since the beginning, from the beginning. And just that will give you a clear sense of what you should or should not do. And if you have a hesitation, then ask questions to someone that does. No 

[00:11:14] Brent: I think you mentioned how the banking system works and how they wanna look at your books.

[00:11:20] Brent: If you are gonna start, if you’re gonna try to get a loan it would also apply to, if you wanna sell your business or get investors how do you recommend somebody that maybe they’ve been in business for five, six years and suddenly they’re, they want to start making their books, is it a process to weed through the mess that a person may have made and then they, you need to get ’em on the, in the right.

[00:11:43] Alejandra: Yeah. So there is definitely a process, especially if you have been in business for a few years and you have done taxes according to your bank statements rather than what’s sitting on that, on those financials. There is definitely a process, especially because those years are already closed.

[00:11:57] Alejandra: I called them closed because. Taxes have been already filed. So it’s really how can I say? You have to talk to the person that file your taxes to, to see what kind of adjustments you have to put in those financials to match exactly what you did in your taxes. And let’s just say that most of the time, your taxes, the taxes that are done are show less revenue.

[00:12:15] Alejandra: Then what’s in the financials? And it’s just because it’s cash basis and there’s a lot more things that are happening on the financials that are happening in, the bank statements. Let’s just say that it’s, you have to go retroactively. So what we do is basically Reno talk to the tax attorney or tax prison that did those books and say, okay, this is where we are.

[00:12:35] Alejandra: this is a trial balance. Now what can we do to get it there and then go forward cleaning up the whole, financial set and make sure that everything that’s flushed out personal, from business is flushed out and there’s a differentiation on it. Because what happens is the banks will look at least two to three years, depending on the financial institution.

[00:12:55] Alejandra: To see, what, how much your gross revenue is. You’re gonna look at those numbers. So if we can make the financials as accurate as possible, and related to what was posted on the taxes and then moving forward as well, we can show some growth, then that can put in a better place, and that goes with investors as well.

[00:13:14] Alejandra: The same, they’re gonna ask for your, your financials. Most you don’t, you probably don’t wanna even share your tax return if it’s flowing through you with an investor it’s uncomfortable situation. So we would have to go back, clean it up, match it to that, and then go forward and show some kind of forecasting, increase in revenue.

[00:13:33] Brent: Yeah, I think that you brought up a really good point about how the tax how the bank statements won’t reflect your ar They won’t reflect your inventory, they wouldn’t reflect any depreciable assets that you have and how important those are for a business owner to know. And even for when you’re going to get a loan, the banker’s gonna want to know what your assets are outside of what the bank balance.

[00:13:56] Brent: maybe talk about some of those pitfalls that entrepreneurs fall into when they, maybe they’re not as educated around accounting as they should be. 

[00:14:05] Alejandra: Yeah, so that’s actually a good point, Brent. So there’s a lot of asset based financing and it’s very important to know that, especially if you are in e-commerce and you have inventory on the books So there is definitely platforms.

[00:14:18] Alejandra: I’m just gonna speak very, a few of them. I don’t endorse any of them by the way. There is a Shopify, there is PayPal capital there is Clear Bank. Those right there will finance against your cashflow revenue stream. But what some asset based institutions do, and you can do the traditional or the non-traditional way, which.

[00:14:37] Alejandra: Do you prefer the non-traditional way for small companies or startups because they’re a little bit riskier? They basically look at your inventory and see what the inventory turnover is and see exactly what the valuation on that in turnover is to finance against it. And what happens there is that if you don’t have.

[00:14:54] Alejandra: If you don’t have a clear, a clean inventory balance, meaning they’re gonna ask for warehouse reports, they’re gonna ask for, what’s sitting on the balance sheet ties into the warehouse and evaluation that’s sitting in the warehouse. Actually the same as in the books. And if you don’t have that really button up, you’re missing on a lot of money.

[00:15:12] Alejandra: And if you do get an untraditional institution, they, you’re probably missing on not right now, cuz there’s inflation. In the future you probably will be missing on lower, in a low cost of capital financing rather than going to a traditional institution. When they give you a term loan, which is gonna be really high with really bad.

[00:15:29] Alejandra: Payment terms. So there is a lot to unpack when it comes to the balance sheet financing. There’s your ar like if you have some really good contracts and clients and they’re valued at, let’s just put a number, 500,000. You can get some really good financing against that if you find a good institution that can give you good factor for that.

[00:15:47] Brent: On your website you list that you do services like bookkeeping and fractional cfo. Maybe explain to our listeners some of the differences, and if we started with the bookkeeper, you have a comptroller, there’s a fractional cfo, there’s a cpa. How there’s a lot of different roles that that a in financials that play.

[00:16:06] Brent: Tell us if you could just explain some of those differences and then maybe tell us what, how you help. Yeah, 

[00:16:13] Alejandra: no, thank you. So yeah, so bookkeeping is your, I’m gonna call like the very low level service. Very basic, can somebody coming in, making sure that your bills are there, your invoices are there, your payments are matching, your invoices very low level.

[00:16:28] Alejandra: I don’t like to really just offer that because I think the company does deserve a little bit more. Than just bookkeeping. I like the accounting, the whole accounting service for anybody honest. It doesn’t matter what your business growth is. And it’s because it not only makes sure that your books ar and AP are really up to par, but it’s also gives a little bit more insight on what your margins are and where you know, your, where your biggest drivers of expenses are.

[00:16:56] Alejandra: If it’s marketing or you. Probations or whichever one it is. So I like that one more. And each level, for us at least, we do have a CPA person and management, that manages the accounts and make sure that everything is up to par. We do have also staff and senior accountants that take care of the very.

[00:17:16] Alejandra: Low, low, the low budget task as well. And then when it comes to fractional, CFO is going forward, right? So one of the things that people need to understand is that accounting is, keeping the financials accurate to what’s going on right now. But cfo, f o means going forward. But in order to have a good forward overlook, you are gonna need accurate financials like the forward.

[00:17:40] Alejandra: journey is based on the actuality right now. A CFO person is somebody that will do those analysis for you, is gonna do an f p, and a analysis is gonna do a weekly cash flow. It’s gonna do some variance analysis, which is like budgets, forecast versus actuals, right? Where are you standing according to your forecast or your budget?

[00:17:59] Alejandra: And if we have to readjust the forecast to meet those numbers this person will help you navigate. What kind of KPIs you’re gonna need to reach, or what kind of KPIs you need in order to meet certain metrics or something like revenue goals. This person can identify, like I said, cash burn.

[00:18:16] Alejandra: Where is that cash burn coming from? If you are a company that’s bringing product from China or bringing, product from another country, what are your shipping costs? Is that like the main driver of your cash burn? What can we. To mitigate that cash burn. And it’s somebody that, when it comes to financial institutions, goes ahead and assess the risk of each loan or line of credit or any, o other kind of tool that you wanna get into.

[00:18:40] Alejandra: This is a person that will analyze and assess that risk that comes with it. And it’s a true apr, right? What exactly are the fees that my company’s gonna face on a yearly basis? Divide business with this company. It’s just, for all, anything that you need. There is, like I said, accounting is actual.

[00:18:55] Alejandra: So you need somebody that can make sure that every number in that book is actually, has a backup. If there’s traceability, there’s an a report. If somebody comes looking for answers, there’s something there. And then you, a fractional CFO is somebody going forward. How do we get to the next level?

[00:19:11] Brent: If somebody’s just starting let’s and they want, they, A year’s worth of books or two years worth of books, they’ve just done it on their own. How long would you expect somebody, like one of your team members to get them up to speed where it’s ready to. Start forecasting revenue, start for forecasting cash flow, things like 

[00:19:30] Alejandra: that.

[00:19:30] Alejandra: So it really depends. Let’s see, one year, two years, and they’ve done it all on their own. We would have to go and look at those books, make sure that, if there are any changes that we need to make. We do them in the current year. Talk to the tax accountant, like I said. And just honestly it takes a month or so to get the, to get us up to speed on like the accounting side.

[00:19:50] Alejandra: And then after that, because we need actual information, we need some really good, reliable information to do the forecasting. And then I would say like a few weeks after that, three weeks, we could probably have a model ready. We do models. Very differently than a lot of companies that I’ve worked for before.

[00:20:06] Alejandra: We don’t have a one size fits all kind of issue because everybody has, different business models and not also a different business growth as well. So there’s a lot of things that small companies don’t need and they probably find overwhelming. So we basically have standardized models already.

[00:20:23] Alejandra: We have a small model and we have a more complex model, and we adjust those models accordingly to the business. The, The business and the business model that we have. So with that being said, it doesn’t take as long to, to create something. But it does what could be that time delay would be the cleaning of the accounting and make sure that everything is reliable.

[00:20:45] Brent: What do you see from a mistake standpoint that entrepreneurs or business owners make when they are hiring somebody like you? and they want to try to cut costs at the same time. Is there places where you see people being cheap and maybe they should just spend the extra money on services to make sure that their books are right?

[00:21:07] Alejandra: Yeah, so I’ve seen different cases, so I’ve seen people. Hire full staff of marketing internal team, and overhead is one of those things that is the biggest driver of cost, especially for a small business. It’s one of the things that I look at. The first things that I look at are, do you have an office?

[00:21:26] Alejandra: How much are you paying for that? And how much people do you have in staff? Because you will be surprised. Fractional goes a long way when it comes to building a business. You just have to find the right partner. That’s what it goes with, everything, right? You just have to talk to people. getting a conversation.

[00:21:42] Alejandra: Go have coffee, vet them out, talk to their clients, talk to their partners, see how they’re reacting. But that would be one of the biggest pitfalls that I see is that these companies are spending a lot of money on employees, internal employees. With that comes and I don’t. Know if a lot of people are listening are in California, but if you are in California’s one of the worst states to have employees.

[00:22:04] Alejandra: It’s like the state is against you as an employer. There’s so many policies that you have to follow. It’s insane. So you could. , you could reduce that level of stress if you just go, find some agency or someone that does those services on the side and can be a good partner to you. The other one that I see is, like I said, if you are in e-commerce and you’re doing inventory is inventory wow.

[00:22:27] Alejandra: There is a, if you’ve. Find the wrong three PL company. Oh my goodness. There’s so much cost that goes with that. It’s just, and it’s a lot of cost to get out of it through PL and to get into another one. So research on the right three PL company is one of the biggest ones that I would suggest to do as well.

[00:22:44] Brent: As a business owner, do you recommend like a payroll service or do you recommend that the entrepreneur or business owner do their own? . 

[00:22:52] Alejandra: Oh, that’s a good one. So definitely a service, a payroll service. I honestly, I like everything. I’m not very techy. I like everything that’s very user friendly, user interface friendly to me.

[00:23:03] Alejandra: And I like the ones that are targeting startups because, they basically provide a lot of support and that companies do need and they’re not very bureaucratic, like older. Payroll software providers are but I’m not, I’m not here to recommend anything. But one of the big, one of the ones that we use is Gusto is very user-friendly.

[00:23:22] Alejandra: It connects with different softwares. And then I also hear that ADPs going and. Connecting, doing a thing with QuickBooks coming up soon. So that’s, that could be a good one as well. I just think that when you’re starting a company, you wanna be very e easy, make your life easy with a lot of techno technology tools, cuz it gets really complicated when you have so many at the same time.

[00:23:42] Brent: Is there a, is there an alternative to QuickBooks 

[00:23:44] Alejandra: as a small business? Oh my God, there is. There is, but is, you’ll be surprised how many people use QuickBooks. I think 90% of the population, I use QuickBooks, so there is, but QuickBooks is just makes it easy for small business owners because it’s very cost efficient, and for example, there’s NetSuite, NetID is a really good platform. , but it’s expensive. And that’s what I am saying, and they do have an in inventory management already capability in it, which makes it a fully RRP system. However, it is very costly, and this is when as a business owner, you have to make those decisions.

[00:24:21] Alejandra: It’s What is the value added for the software that I will be buying is if I’m spending $30,000 a year for the software, what is the value that I’m getting out of it? How many employees do I have that are you gonna be using it? And then from there determine if this is worth the investment or not.

[00:24:37] Alejandra: So that’s where we go with the companies that’s. Probably use QuickBooks online because it’s very cost efficient. You can connect it with other tools, but there’s ma As you grow your business, I, if it makes sense, go for it. If it doesn’t make sense to put those 20, 30 grand in a system, then don’t go for it.

[00:24:55] Alejandra: Just continue, using tools that work for you. 

[00:24:59] Brent: Is there, can you highlight challenges? So you mentioned e-commerce in selling a product. Is there challenges in selling a service as a, as a. . 

[00:25:08] Alejandra: Oh, always. There’s always challenges. . Oh my goodness. There’s so many challenges. Yes. One of the biggest challenges, it is credibility.

[00:25:15] Alejandra: Making sure, obviously when you’re, when I see it from a small business owner point of view, when you is your baby, Especially the finances. This is go to finances. Oh wow, somebody’s gonna handle my finances. You wanna make sure this person is really vetted and wonder what they’re speaking to.

[00:25:31] Alejandra: And I a hundred percent agree with that. Also marketing service is another one. That is, there’s presents a lot of challenges because marketing’s all about results. It’s not about the process. While the finance and the accounting is all about the process. , about the results.

[00:25:43] Alejandra: So you just have to, it is always, there’s always a challenge no matter what you sell. For me, the biggest challenge is people like me, they talk to me, they meet me, they’re like, oh she’s very pleasant. But I look very young. I’m not gonna lie. You’re looking at me right now.

[00:25:56] Alejandra: I look very young and people are like, oh my gosh. She has that much experience. How old was she when she graduated high school? And when they look at my experie, My experience will talk for itself. So if you do feel like there is a way to vet more of your service, providers, you can always ask for references for clients, for partners, for, just to see what they’re doing for other people.

[00:26:18] Alejandra: And, at the end of the day is, find a partner that has flexibility as well. on a contract. If you don’t like them, goodbye, there’s no oh my God, you, I have to pay this. I have to do that. I have no, it has to be somebody that’s easy because at the end of the day, you’re is your business and you wanna make sure you have the right partners in place.

[00:26:36] Brent: If you had a piece of advice going into this fourth quarter in these high interest rate times to a business owner, what would that be? 

[00:26:44] Alejandra: Start looking to cut costs. Right Now, look at the areas of like I, we just talked a few about overhead costs, right? Unfortunately there is a lot of people being laid off right now because of that reason.

[00:26:55] Alejandra: But. It shouldn’t be that way if you were vetting your costs at an early, earlier time this year, right? Because inflation has been coming for a long time already. So just be proactive look ahead. That would be my first advice. Look ahead, look at your cash burn. Start looking into those weekly cash flow models that I always, you know, monthly cash flow models will tell you so much, but if you look at a weekly standpoint and see exactly what’s driving the number in, you will see there is a lot of areas that you can, lower down those costs.

[00:27:23] Alejandra: The other one is, it was probably better back a few months ago to get into a line of credit, Kind of use that money now, the interest rate are so high, I don’t even recommend it. Just start initiating those conversations with a lot of financial institutions to see what they offer in the near future.

[00:27:42] Alejandra: Because the, the interest rates will come down. It’s, as the government continues to push, they will come down at some point. So the cost of capital will, will become cheaper. Just start initiating those conversations now and be, prepare, be proactive in this time. 

[00:27:56] Brent: Yeah, I’ve always heard that the best time to ask for cash from a bank is when you don’t need it at all.

[00:28:02] Brent: Exactly. , when you absolutely need it, that’s when they don’t want to give it to you. . Yeah. You, you mentioned weekly and monthly cash flow models and that’s how you can help cut expenses. Do you, so you recommend looking at the detail within that cash flow to help you see where that money’s going?

[00:28:15] Alejandra: Yeah. So this is the thing with the monthly one. So the monthly is a very undirect cash flow model. It takes the activity of the balance. Just to see what’s happening. But on a weekly basis, it is very direct. And you can monitor that on a weekly basis. Just to assess where you standing and when is It tells you by week when your cash is running out.

[00:28:34] Alejandra: If you’re running out of cash on January 3rd, that’s when you’re running out of cash with everything else that you’re being forecast, you’re meeting those forecast numbers and it helps you be proactive in your budget If you say, okay, I’m running out of cash on January 3rd. , that’s not a lot of runway.

[00:28:49] Alejandra: We don’t have, external capital coming. Let’s cut down what are the budget areas that we can minimize to bring it to February, at least one more month. That it helps you be really proactive in identifying those areas of opportunity. And then if you need to ask, do a fundraising round, then it gives you at least that lag time.

[00:29:08] Alejandra: Okay, two more months to get really out there and ask for. 

[00:29:13] Brent: Perfect. Alejandra, as we close up the podcast, I give the guests a chance to do a shameless plug about anything you’d like. What would you like to plug today? 

[00:29:20] Alejandra: It is Black Friday coming up, so make sure that you have your inventory.

[00:29:27] Alejandra: If you’re using something like Shopify or e-commerce, make sure your inventories are set up correctly cuz that way you don’t have a future headaches in the, once everything is done, make sure that you have your follow ups correct, coming out to all those new customers, make sure that you have some retained strategy for the new customers coming in and purchasing your product.

[00:29:46] Alejandra: So I would just say there’s actually a blog from OK Kendo I can share it with you and I just head over. There is a few tips of coming from different experts on how to prepare for Black Friday, cyber Monday for you to make a lot of money and cut a lot of headaches. . 

[00:30:01] Brent: That’s awesome. Yeah, I appreciate that.

[00:30:03] Brent: We don’t often get different types of industries that you’re giving advice for. Thank you so much for that. Alejandro Sandro, Santo, sorry. is the CEO and founder of Startup Tandem. Thank you so much for being here today. 

[00:30:17] Alejandra: Thank you brand. This was so much fun. Mutual Gusto, .

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