Decide in your mind: What you need to know when starting a business in e-commerce

Audiomania on m. Elektrozavodskaya

Any business founder wants his offspring to grow and develop - of course, if we are not talking about fraudsters and one-day firms. This is true both for offline projects, and for Internet business in general and e-commerce in particular, which was booming several years ago.
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The network was filled with guidelines for creating your own stores, and blogs were filled with success stories of non-working housewives who discovered the brave new world of reselling goods from Chinese Internet sites.

In theory, all these stories sound very tempting - it seems that to create an online store you need only one big desire and a head on your shoulders. In practice, not every e-commerce project overcomes the "valley of death" - even if the founders approach its creation seriously, they are not afraid to take risks and are ready to literally live at work.

In Audiomania, we not only developed our own e-business, but during the whole period of its existence we talked and witnessed a large number of ups and downs in e-commerce. And we are ready to talk about how to do it: in this material we decided to collect the most common mistakes that can cost you a lot on your online project at the start.

We must begin, and there - how it goes

This is one of the biggest misconceptions of the new business, both in e-commerce and elsewhere. At first, such light negligence does not seem to harm anyone (the project works!), But later it turns into a huge tangle of indistinctly defined tasks, ignored problems and other irreconcilable contradictions.

Who is in charge here?

The road to a thousand, as you know, begins with the first step, and in this case, taking the first step on this road to nowhere is delicately avoiding the question of who will be the general director in the company. You are only two / three / four enthusiasts, everyone is ready to be responsible for everything, and you are happy to work together. You may have old friends, relatives and even spouses. Well, then how can you break this peace and harmony and start from the threshold to find out who is in charge here?

Alas, it is necessary. How necessary and a complete understanding of the responsibilities of each of the founders. This will allow fixing who makes the final decision in case of disputes (general). Here you need to understand: as in the movie about superheroes, in business a big force also entails great responsibility, so the CEO is not just the one who has the last word. In which case, he will be responsible first of all to be accountable to contractors, funds and tax.

The same applies to all other team members - everyone should have an understanding of what area of ​​responsibility is assigned to him. Yes, since there are so few of you, tasks can (and will) be duplicated, but at the same time it is necessary to understand who is in which direction is the main one. At a minimum, in order to find out whether a person is fit for a given role or not (no one asserts that you distribute all tasks from the very beginning).

For example, if you understand that your co-founder is well-versed in technologies and is enthusiastically writing code, but he is “no” sales manager, assign him the role (conditionally) of the CTO and don’t try to shift the duties of the negotiator to him just because early on you are all working together.

Such a distribution of roles not only allows one to understand what a person as a whole is busy with and what can be demanded of him - it serves as an additional incentive to increase personal effectiveness. The rule “if everyone is guilty, no one is guilty” works fine, so if everyone is equally responsible for the bugs in the code, penalties in the tax and the lack of a contract with the supplier, the problems will not go away, but poking a finger looking for the guilty will be like awkward (yet tried so hard).

No, “poking a finger” in this case is also not an end in itself, but the distribution of roles and the choice of the general director (more precisely, securing him with real power in the team) will get rid of the collective solution of problems, when everyone does only that he likes / is more familiar / comfortable, hoping that the rest of the work in this direction will be “picked up” by someone else.

Basic mistake: excessive delicacy. It seems to you that the severity and imposition of rules, “areas of responsibility” is a story about corporations (and here you have complete harmony and other pastoral). You are embarrassed and uncomfortable, because these are personal questions. The problem is that the money you will pay is not for what you are good friends with colleagues.

Solution: Business, even family business, is, first and foremost, a business. Therefore, your goal is to learn to ask uncomfortable questions from the very beginning: who is in charge here? Who has the last word? Who will do what? From whom for what to ask?

The struggle for the CEO’s position can be avoided: you should start with a discussion of the areas that the general will be required to engage in (and also the areas in which he will have to bear direct - administrative, and even criminal - responsibility), and already at this stage wishing to lead may immediately decrease.

The programmer is forever

Very often, among the co-founders of an e-commerce company there is at least one programmer (less often two, despite the fact that the founders, as a rule, have any technical background). There’s really nothing wrong with that. On the contrary, initially the presence in the team of a techie who is able to write code and work for the idea (after all, the co-founder) of the company will only benefit. The problem in this case is that the programmer perceives everything related to writing code as his patrimony.

Yes, this is the reverse side of the distribution of roles, while the programmer is the most characteristic example, since in the absence of special knowledge, no one else will get into what he does. The vulnerability of this approach is that in the team, as a rule, no one (including the programmer himself) thinks that sooner or later the founding coder will leave the company (this happens more often than we would like) or, at least will require helpers.

As a result, when a programmer (consider the most dramatic case) leaves the project, a panic begins in the team: what did he do? What problems did you work on? In what language did he write all this?

Sometimes the project team is so far from its technical implementation that it does not even notice the absence of a programmer (it still works that way), but this is until the first failure. Then the company urgently begins to look for a replacement (after all, the website for an online store is the main channel of interaction with the buyer, and if something goes wrong on the site, all other business processes will also go wrong, if at all).

As a result, it turns out that the team cannot formulate the requirements for the new programmer thoughtfully, and even if the project finds its new hero, he is forced to literally rake the Augean stables. Because the founding programmer, of course, did not document anything, and sorting out his code is the same as reading Egyptian hieroglyphs (it is sometimes easier to do it all over again).

The main mistake: to think that the technical implementation of the project is a “black box”. If you are a non-techie, you do not know how this box works, but you are not interested in it - as long as everything goes well.

For the founder-programmer, in this case there is always the temptation to "start playing by his own rules." Yes, everyone is talking about the mandatory documentation, but why these conventions, when you actually work for yourself? Yes, you need comments in the code, but only if there are several people working on the project? Yes, there are more effective / progressive solutions, but it is interesting for me to write in this language.

Solution: if you are not a techie, reduce piety before your IT professional is busy. In the end, he is not a powerful magician from a distant citadel who creates dark deeds that are beyond the control of mere mortals. Your programmer can (and should!) Explain to the team what he is doing, why he uses certain solutions, what is the logic of his work, especially if you establish regular interaction and explain to a colleague why this is important for everyone. If you are an IT specialist, remember one of the principles of flexible development methodologies: “people and interaction are more important than processes and tools”.

Documentation and comments - not less important moment. Yes, now your programmer absolutely does not want to waste time on them (in other words, laziness), but in the future it will be necessary if not for a new coder, then for himself: human memory, of course, is an amazing tool, but relying on it is at least naive .

Leave planning for later

Another point that is much easier to deal with right away is planning, as well as financial and management accounting. Of course, when you are a small company with a tiny turnover, management accounting seems like unnecessary wildness - who needs all these ROI, EBITDA and other terrible abbreviations?

But as the project grows, all its business processes will become more complex, and you should not rely on the fact that you can deal with what is happening “at a glance”. It would seem that this is a truism, but many companies are limited only to accounting (and in fact it does not reflect the current situation and is by definition directed “to the past”) - and this only because the regulatory authorities require it.

As a result, there are extremely unpleasant situations. For example, in case of granting a deferment of payment to a supplier or advertising service, an online store begins to thoughtlessly invest suddenly released funds “into development”: in attracting new specialists, in office design, in marketing, in personal growth trainings for employees and other tasks, suddenly become extremely important.

Formally (if we consider only the movement of funds, that is, cash-flow), the company really has money in this situation. In reality, when accounting for profits / losses, it is obvious that they will have to part with them very soon (this is just a postponement of payment), so you can manage the released funds, but with great caution, because this money, although reflected on the balance sheet of the company she does not actually belong.

Of course, in the absence of a well-adjusted accounting, there is no talk of any sensible assessment of the situation: not counting the profitability of these investments, not understanding how, in what quantity and volume and, most importantly, in what time frame they can improve the current situation (and will improve), the company rush, they are wielding them, as if it were their own funds. As a result, by the time the payables are paid to the supplier, the business comes with nothing (the example is completely wild, but no less real from this).

The sudden lack of funds stimulates a new “vicious circle”: lending and refinancing (in the worst case) or demand stimulation systems that formally lead to revenue growth in the short term, but in fact frankly unprofitable (selling goods with huge discounts, ill-considered bonus programs). All this is not just dangerous - such carelessness in handling funds can cost the founders of their entire business, and in a very short time.

The main mistake: the false sense that all problems can be solved as they arrive - and therefore the issues of financial and management accounting, as well as planning related to them, can be quietly neglected in the early stages (this may apply to some industries, but definitely not to e-commerce). This results in the confidence that financial issues can be solved “on the fly”, in manual control mode - and for everything else there is an accountant.

It is important to understand that the accountant will not help you decide on which marketing channel to invest in and how to predict the return on these investments, he will not tell you how to manage the money generated by deferred payment and what costs to plan next month. In a small online store, these issues should be solved by the founder, and on the basis of real numbers, and not because of "deep inner conviction."

Solution: Yes, at the stage of creating a new company, it may be ridiculous to delve into the subtleties of financial and management accounting, but still this is a good time to begin to understand such issues. When your store makes hundreds of purchases per day, you will have no time to comprehend the basics of financial literacy for entrepreneurs.

Let now your tables, charts and values ​​of indicators will be obvious to each and everyone - so you will create the main template that you will work with in the future. And in this case, the template is understood not as a table in Excel, but as principles: behavior, use of data, decision-making on which we need to work from the first days of the company's existence.