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5 accounting mistakes online store owners make and how to avoid them

5 accounting mistakes online store owners make and how to avoid them

If you’re like most entrepreneurs, you aren’t as organised as you’d like to be when it comes to the end of the financial year, so this is the perfect time to take stock of your accounting practices and make sure you’re on top of everything going into a new financial year.

We sat down with Wayne Richard from Bean Ninja’s to go over the 5 most common accounting mistakes eCommerce entrepreneurs make.

The 5 most common accounting mistakes online store owners make are:

 

1. Bank balance bookkeeping

Also known as “back of the napkin bookkeeping”, Wayne explains what this is and how to avoid this mistake.

 

2. No cash confidence

Lacking the ability to know (for certain!) how much cash is on-hand or where and when to deploy it is a big mistake. We talk about how to overcome this and we reveal the system that we use to always have enough cash to pay our bills, pay ourselves and turn a profit!

 

3. Scaling losses

When people start our eComm Ignitor program, one of the first things we teach them is about margins and almost every time people realise their prices are too low. So it’s no surprise that failure to measure and understand contribution margins or ratios is on the list.

 

4. Inventory control

Cash flow and inventory problems go hand in hand and can seize business operations. One of the most common issues with our Facebook Ads clients is that they run out of stock. This causes issues with unhappy customers as well as lost momentum with paid advertising.

 

5. Lack of understanding of sales tax responsibilities

Pleading ignorance is not a valid excuse when the taxman comes knocking. Understanding your tax obligations is an absolutely essential part of running an online store.

Watch the video to see the full chat. Grab a pen and paper because you’ll want to take lots of notes on this one!

Wayne has also offered two exclusive free gifts for Unstoppable eCommerce Entrepreneurs.

 

Free Bean Ninja’s eCommerce Toolkit

  • Step-by-step guide to getting your Xero file in order
  • Cashflow Forecast Template to help you plan for the ups and downs in your monthly cash flow
  • Bookkeeping timetable template to help you stay on top of your finances & get current reporting
  • Weekly newsletter sharing resources to help you create your freedom business.

Click here to access the free eCommerce Toolkit.

 

Free Complimentary Know Your Numbers Audit (value $249 USD)

  • Book a 30-min audit and you’ll get:
  • A clear picture of your goals and how to smash them
  • Your own customized financial strategy
  • Clarity on how much budget you have available for investing in growth
  • Guidance on optimizing your cashflow
  • BONUS Cashflow planning tool

Click here to book your free know your numbers audit with Wayne.

Creating your own dream board

Creating your own dream board

When people sign up to our program, their aim is to sell more on your online store.

“But WHY do you want to sell more on your online store?”

This is one of the first things we ask our eComm Ignitor students.

This question is applicable to almost every aspect of your business and life so I thought I’d write this article to help you determine your why.

When you’re looking at a goal ask yourself what will achieving that goal mean for you, your family, your mission, your life?

A really powerful video on this is Simon Sinek’s Ted Talk.

Can you see why that’s had over 43 million views on youtube? 

Take some time to really think about your why. 

If you have a compelling WHY, you will be able to push through and keep focusing on the things that are going to get you closer to your dream. 

Now there are dreams and there are goals. 

Our dreams are our desires. Goals are how we are going to make our dreams a reality. 

We often jump to setting goals, because often this is the easier part. But our goals can be empty and meaningless if we don’t have a WHY behind them. 

In our program, we will give our students knowledge and tools and activities to sell more on their online store. But what we can’t give them, is their why. 

So that is why we encourage them to take the time to express their why. 

Here’s how to define your why:

Firstly, jot down what it is that you want. What does your ideal day look like? What makes you burst with joy? Do not limit yourself by what is possible or reasonable. Look into your heart and give yourself permission to express what it is that you really want. 

This can be a challenging exercise because sometimes it’s hard to distinguish between what you truly want – or something you think you should want. Or it has been for me anyway. I remember having a car on my dream board for years. I would look at it and feel nothing. I had it on there because I allowed others to define what success meant to me. A nice car means nothing to me, but I thought it SHOULD be there. I have now replaced that image with things that really light me up – like camping on the beach and helping orphaned children get to school each month

Ok, so before we dive into the tools and tactics of how to sell more on your online store we want you to create a dream board. 

Here’s how to create your dream board:

  1. Spend some time to articulate what it is you want. I like to think about what I want in the different areas of my life: family, fitness, finance, friends, fun, future direction, career/business and impact or legacy. 
  2. Find images and words that represent your why. Choose your images carefully. You want them to really spark joy within you. If they don’t, find another image. You can do this by going through magazines – or searching Pinterest and Google images. 
  3. Put it all together on a board. You can simply use a pinboard, piece of cardboard or a photo frame. Or you could do it digitally and use a PowerPoint, Google slide or even Canva to arrange your images and words. It is important that you display it somewhere that you will see it every day so if you create it digitally, be sure to print it and stick it on your wall. 

Once you have created your dream board, take a pic and share it in the group so we can celebrate you taking action. 

4 tips to validate your product idea

4 tips to validate your product idea

So you’re looking to start an online store but aren’t sure if your product idea has legs or not?

It’s true that one of the most critical elements of a successful online store is the product.

Your product needs to have a demand, people need to give you money for it, and when they do give you money for it they need to love it and tell their friends about it.

So, how do you tell if your product is a goer, or not?

The first thing we want to do is start with you.

If you’ve found a gap in the market and are ready to launch a concept that doesn’t exist yet — what’s really important is that there is a market in the gap and that there are enough people who want/need your product to create a viable business.

Regardless of the product, you are launching, it’s important that you remove your ego from this process. Your ego may be so attached to making your idea work that it’ll allow you to spend time and money pursuing something that just simply won’t work. Approach this process through an unbiased, non-emotional lense.

Tip 1: Ask questions and gather feedback

Asking questions is one way to see what people think of your product idea.

But it’s important that you ask the right people.

I’m part of many Facebook groups and nearly every day I see posts asking for advice on the rebrand of product labels, logo design and landing page creation. While sometimes the Facebook group is the right forum, often it is not.

While surveying the right people is a great way to progress in the right direction, surveying the wrong people is a great way to progress in the wrong direction.

So who do you want to ask:

  1. Ask friends and family. But take their answer with a grain of salt. If they enthusiastically say “that’s a great idea – I love it!” (which they probably will because they are invested in your feelings) ask them to part with money to see if they really think it’s a great idea; Actions – or transactions in this case – speak louder than words.
  2. Ask lots of strangers. They can provide unattached, non-emotional feedback. They aren’t attached to the idea, and they have no idea how much time and effort you’ve put in.
  3. Ask your ideal customers. Sounds obvious, but this is often skipped.
  4. Ask someone who is already doing what you’re thinking of doing. See what challenges they faced and perhaps avoid some of the same pitfalls.

Tip 2: Use Google to research the size of your market

You can also use Google tools to evaluate the size and popularity of your market. 

Google receives more than two trillion search queries a year – and as a platform, it provides online store owners with some really powerful data.

There are 2 Google tools we want to introduce you to now. 

1. The first is Google Trends.

 You can use this tool to identify how popular search terms are by location, category and time. This is great for identifying if your product is increasing or decreasing in popularity, as well as identifying if your product is cyclical where you have high and low seasons throughout the year.

 

2. The next tool we want to introduce you to is Google Keyword Planner.

Ok, so I’m just going to show you one feature of this tool for this exercise and that’s to see how many searches per month are being made for that term, and how much competition there is bidding on ads for the term.

I just want to quickly explain the difference between keywords and Long tail keywords. Keywords tell the search engine what is on the website. For example Dog Bed.

Long tail keywords are phrases that are made up of 3 words or more and are more specific. For example “how to build a dog bed” or “where to buy designer dog beds”.

How to use Google Tools to validate your product idea:

  1. Brainstorm a list of keywords and long tail keywords that people might use to search for your product. Include modifiers like “where can I” and “how-to”.
  2. Use the Google Keyword Planner Tool to see how many searches are being made for each keyword and long tail keyword, and how much competition there is.

The number of searches will give you an indication of the size of your market. And the competition will give you an indication of how many other brands are competing for your audience’s attention.

Now, if there are no searches for your product it may mean that people aren’t using the same language as you, so try variations – for example, leggings, tights, pants.

These tools won’t be able to tell you if your business is going to be a success or not, but you can use them to help you gain valuable insights into the searches and the competition.

Tip 3: See if people will give you money

Markets, popup events and parties are a great way to validate product

You can also make pre-sales, especially if you are tossing up between a few ideas. The way this works is you make the sale based on a concept or mockup and then make the product. So you make the sale without having any physical stock. We have a case study that shows you the exact strategy I used to generate 70 sales in one day, for a brand new product, with $0 ad spend and zero stock.

Tip 4. Just launch!

The best way to validate your product is to make sales and the only way to make sales is to launch.

The worst thing that can happen is you don’t make any sales. If you don’t ever launch, you won’t make any sales.

So, do your research, but the best way to see if your product has legs is to just launch.

Compliance check list every online store needs

Compliance check list every online store needs

There are a few policies you need to have on your website to make sure you have all the legal stuff sorted.

We can’t give you legal advice, so this is just general information. If you have any further questions, please consult a local lawyer or privacy professional.

We are going to cover the following in this article:

  1. Laws, regulations and standards
  2. Insurance
  3. Terms of service
  4. A privacy policy
  5. Shipping policy
  6. Returns policy

 

Mandatory product standards:

Your product may be in a category that is covered by mandatory product standards. It is compulsory to have particular safety features or information on products for legal supply of the product into the Australian market. It is an offence to supply goods that do not comply with mandatory standards and you may face a fine or penalty.

There is a range of products that come under the standards including anything, but certainly not limited to, baby and kids toys, bean bags, cosmetic labelling, Care labelling for clothing & textiles, Sunglasses, toys and the list goes on.

Check out the ACCC Product Safety Australia website for more information.

And if you sell to other countries make sure you check that you comply with their standards too.

 

Insurances:

Insurance is something that is specific to each situation. We recommend that you talk to a broker to see what kind of insurance you and your business need.

Here is some general information about insurances you may need to consider:

  • Liability insurance and this usually covers you in case someone gets injured while using your product, no matter where they are.
  • Property insurance and this usually covers the loss or damage to your physical products. It’s important to note that your existing homeowner’s policy would cover your personal items, but likely won’t cover anything related to your business. If you run your business from home, it’s important to have both aspects covered unless you could replace all of the inventory and equipment out of pocket.
  • You may also need to look at transit and shipping insurance.

Again, we recommend you talk to a trusted insurance broker to see what insurances you may need.

 

Terms of service policy

Your website needs to have a terms of service policy. This lets anyone who visits your site know things they are and aren’t allowed to do when shopping on your site.

You need to state your terms of use in clear, simple, and easily understood language.

Your terms of service need to include terms around products, billing information, third-party tools and links, indemnity and governing law.

Now this all sounds a bit complicated but Shopify have provided a free terms of service policy generator.

 

Privacy policy

Your online store needs to have a privacy policy.

Online privacy is important because as an online seller, you collect and retain personal information about your customers including their name, address, email address, and possibly their credit card and other types of financial information. As the online store owner it is your responsibility to ensure this personally identifiable information is protected, and that when you collect such data you comply with federal and state privacy laws. And privacy policies are mandated by law in many countries.

Your privacy policy needs to clearly state what kind of personal information you will collect from users visiting your website, who you will share the information you collect with, and how you will use and store that information. And your privacy policy needs to be clearly accessible on your site.

You need to comply with the laws of the location that you are selling to.

Most countries have their own privacy policy and if you sell in that country you need to comply. Some of the more newly introduced laws to be aware of are:

The General Data Protection Regulation (GDPR) is the Greater Union’s data privacy law and affects you if you are based in Europe or who serve European customers.

The California Consumer Privacy Act (CCPA) is a California law that gives California residents more control over their personal information. If your website is available to California residents or you are involved in the sale of California residents’ personal information, then this law likely applies to you.

Shopify have a great whitepaper on CCPA and GDPR if you need more info on this.

We can’t give you legal advice, so this is just general information. If you have any further questions, then consult a local lawyer or privacy professional.

Shopify have a free privacy policy generator that you can access.

 

Refund policy

A good refund or return policy can help protect your company and win your customers’ trust, which in turn increases conversion.

We recommend having a really good returns policy. And by good, we mean good for your customer. Make it easy for them to return items. Don’t make them jump through hoops.

People are literally taking a leap of faith when they shop online. They need to trust that the product is as good as you say it is and they need to trust that they can return it if they don’t like it.

If you don’t have faith in your products why should your customers?

Sure, by having a returns policy you may have some returns to deal with, but this will be far outweighed by the increased conversion rate.

Shopify have a free refund and returns policy generator that you can access.

 

Shipping Policy

Another policy that you should have on your website is a shipping policy.

Customers have been burned by orders taking 6+ weeks because they unknowingly purchased from a dropshipping site. So having your shipping terms clearly stated is really important to build trust and to increase your conversion rate.

You want to let people processing times, shipping times, shipping methods and different policies for different locations or order values if you have that. You don’t have to be boring here either, you can add some flare to your shipping page by including pictures of you packing orders and how your orders look when they are sent. People love a good unboxing experience.

 

Spam

 If you send out your marketing emails or messages, you need to know about spam laws.

If you plan to send marketing messages or emails, you must first have permission from the person who will receive them.

Even if someone else is sending out your marketing messages for you, you must still have permission from each person who will receive your messages.

After you get permission, you must ensure your message:

  • identifies you as the sender
  • contains your contact details
  • makes it easy to unsubscribe

 

Getting permission

A person who gives express permission knows and accepts that they will receive marketing emails or messages from you.

People can give express permission by one of the following:

  • filling in a form
  • ticking a box on a website
  • over the phone
  • face to face

 You cannot send an electronic message to ask for permission, because this is a marketing message.

Keep a record when a person gives express permission, including who gave the permission and how.

Under the Act, it’s up to you to prove that you got a person’s permission.

You may infer that a person gives permission to get your marketing messages if you can satisfy both of the following:

  • they are a current customer
  • the message you want to send is related to the product or service they already bought from you

For more information about spam laws in Australia check out the ACMA’s website and if you are sending to another country, be sure to comply with their spam laws.

Final word

So to make sure your website ticks all the rules, regulations and legal boxes make sure you have these elements covered:

  1. Laws, regulations and standards
  2. Insurance
  3. Terms of service
  4. A privacy policy
  5. Shipping policy
  6. Returns policy
We purchased from 30 online stores – here’s what we learned

We purchased from 30 online stores – here’s what we learned

In light of the current pandemic a lot of businesses are feeling unsure, overwhelmed and uncertain of what will happen to their business, income, etc..

Inspired by Denise Duffield-Thomas, Karyn and I decided we would commit to supporting online store owners in various ways, including by spending with them.

We asked people to share their products with us in a post in our group, then we went on a support shopping spree.

Why? 

  • We wanted to intentionally act from a place of support and abundance, not scarcity or fear
  • We knew that the little cha-ching sound of a purchase would spark confidence & optimism for online store owners
  • We hoped it would encourage people to pay it forward and to spread love and abundance by shopping with other small business owners.

We made a purchase from 30 online stores and while we were there we observed the following opportunities to improve: 

When someone asks for a recommendation, send them to the product page, not your home page

Heaps of people said they recommended a certain product but sent me to the home page. This is like asking a shop assistant where the soap is and they say “in the shop somewhere” as opposed to “isle 10 just past the tissues”.  Don’t make it hard for people to find what they are looking for and to give you money.

On that, if someone does happen to land on your home page, make it easy for them to find what they are looking for. Think of your menu like isles in a supermarket. Clearly categorise and communicate what you sell and where people need to go on your site to find it.

 

Limit distracting pop ups

Turn off pop-ups that distract your customers’ attention. For the most part, pop-ups are simply annoying and don’t increase your chances of making a sale. Just because you can have them, doesn’t mean you should.

 

Ask for people’s emails, but don’t send people away from your site

Capturing an email address is great because not everyone is going to purchase the first time they visit your site. By getting their email (and their permission to send them marketing communication) you can continue building up the relationship with them until they decide to purchase from you, or unsubscribe. If you are going to offer an incentive in exchange for someone’s email address:

  1. Make sure the incentive is good. “Subscribe for the latest updates” is not enticing.
  2. Don’t send people away from your website to get their code. A lot of sites said “thanks, check your inbox for your code”. What you’re doing here is basically sending people away from your website to a place filled with other brands’ offers and marketing communications.

Here are 2 websites that I thought offered particularly good incentives in exchange for my email: https://psimvegan.com.au/ and https://tribeskincare.com.au/

 

Don’t deter people with shipping

Free shipping is the best so if you can, offer free shipping. Or at least have a free shipping threshold where people have the option of qualifying for free shipping if they spend over a certain amount. We have an entire blog dedicated to shipping if you’re curious to learn more about the psychology of shipping and how it can impact your online stores’ conversion rate.

If you are going to charge shipping, communicate it early. There’s nothing worse than spending time browsing a site, picking out an item, adding to cart, initiating checkout then being hit with surprise shipping costs, especially if the cost of shipping is almost the same as the product you are buying. It’s just annoying. Clearly tell people what they can expect to pay for shipping upfront and all throughout your site.

A surprising number of sites had “local pickup – free shipping” selected as the default shipping rate. This doesn’t show until the final checkout so you think you’re getting free shipping until all of a sudden you aren’t. Super annoying and an unnecessary obstacle.

 

Keep it super simple

Remember not everyone knows as much about your product for the first time. When designing your product page try to step into the shoes of someone who has never seen your brand or product before. What do they need to see to be enticed to buy?

  • Don’t try to over complicate things. Communicate what you sell, who it’s for and why they should buy it in a clear, simple, easy-to-understand way.
  • The standard works. Don’t try to reinvent the wheel when you’re designing your site. Consumers are used to websites being laid out in a certain way. If you try to be too different people won’t know where to look. Be different in other ways, like your images and language, not the layout of your site.

Images are everything!

Images are one of THE most important elements of your online store. Include a mix of product-only and lifestyle images (images that show your products used in context). Make sure you show every angle of your product and if you sell clothes, tell us what size the model is wearing. Oh, and keep your images all the same size. You don’t want people noticing little discrepancies and taking their attention away from you and your products.

 

Make sure you have a Pixel properly installed on your website

A Facebook Pixel is a free little piece of code that you can install on your website and it allows you to retarget people like magic after they have been onto your website. 76% of websites we purchased from either didn’t have a pixel, or had that was not paired with a catalogue.

 

Make sure you have a privacy policy

Exactly 50% of sites we purchased from didn’t have a privacy policy. Your online store needs to have a privacy policy and in most countries is governed by law. Shopify has a free privacy policy generator that makes it easy to create a privacy policy for your website.

 

Aim to make your packaging instagramable

You want your packaging to be Instagramable. People love a good unboxing experience and when your packaging is a little bit special it makes the experience more engaging, memorable and sharable. Of course, you want to make the packaging, wrapping and materials that your product comes in beautiful and on brand, but by adding something a little extra goes a long way. https://bytaralouise.com.au/ popped in a lollypop which was super cute, memorable and put a big smile on my face.

Also, make sure your packaging aligns with your customers’ values. Consider environmentally friendlier packaging options.

 

Focus on repeat purchases

As well as acquiring new customers we also want to focus on repeat purchases and loyal customers. Selling to an existing customer is much easier, quicker and cheaper than acquiring a new customer.

Send follow-up communication. So often people put so much effort and energy into acquiring a new sale they forget that the purchase journey doesn’t end at the checkout. Don’t forget to continue on the communication with customers after the sale.

 

Share the love & keep moving forward

The more success you have the more positive impact you can have on your life, your family, your community and the world around you.

If you are feeling helpless at the moment, the best thing you can do is to support someone else. On the other hand, if your store is experiencing success, as a lot are at the moment as more people move to online shopping, share the love and support another business. It will literally make their day.

We hope this feedback will help inspire and motivate you to improve your online store. Comment and let me know if you’ve found this helpful and what areas you are going to focus on first.

PS: We have also created this eCommerce Thrive Guide. In this guide we illuminate proactive, positive actions you can take to strengthen your business now, and into the future. Click here to access the guide now. 

Quick, easy & free setup: everything you need to start an online store today

Quick, easy & free setup: everything you need to start an online store today

If you sell a product, having an online store is no longer a nice to have, it’s a must-have.

Does this sound familiar?

  • You know you have an amazing product, you just don’t know where to start with all this online stuff.
  • You’re selling on Etsy, at markets or even a physical store and you know you need to set-up your own online store to take your venture to the next level.
  • You’ve been putting off setting up your online store for ages as you just don’t know where to start and don’t want to waste time and money trying to figure it all out yourself AND you don’t have the capital to pay a web developer.

If you said YES to any of these, then you’re ready to take the leap and set up your online store.

Setting up an online store doesn’t need to cost thousands, or even hundreds, of dollars. In fact, you can get set up and selling… now… for free.

This is great news for you if you are asking:

  • Can I build an online store without paying an expensive web developer?
  • How can I start selling my products online quickly and easily?
  • How to set up a successful online store without going into debt or dipping into my savings?

Here are 5 free resources with everything you need to build your online store and start selling now – with zero out of pocket costs to you. And you don’t need to be techy at all.

1. eComm Foundations Course

Learn exactly how to set up your online store. Currently, the enrolment fee is 100% waived.

2. Shopify 

Set up your online store with a 90-day free trial. Click here to start your 90-day free trial.

3. Financial Foundations Course

Take control of your business finances while learning and implementing a Xero financial system in your existing business. Use code GIFT to access this for free. Valid until April 17.

4. Facebook

Drive traffic to your store using Facebook Ads. Facebook has announced $100 million in cash grants and ad credits to 30,000 eligible small businesses. At the moment all you can do is subscribe for updates and more details will be released later.  Make sure you subscribe here.

You can also learn how to make $10k+ a month on your online store using Facebook ads™ with this free Masterclass.

5. Guide to Thrive

This guide illuminates proactive, positive actions you can take to strengthen your business now, and into the future. Zero panic-talk or fear-based jargon, just simple, loving guidance, suggestions and tools to help you navigate a rough sea.