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



    Audiomania on the metro station Elektrozavodskaya

    Any business founder wants his brainchild to grow and develop - of course, if we are not talking about scammers and one-day firms. This is true both for offline projects, and for the Internet business in general and e-commerce in particular, which was booming a few years ago.

    The network was filled with guides to create your own stores, and blogs were full of success stories of unemployed housewives who discovered the brave new world of reselling goods from Chinese online sites.

    In theory, all these stories sound very tempting - it seems that to create an online store you need only a big desire and a head on your shoulders. In practice, not every e-commerce project overcomes the "death valley" - even if the founders take it seriously, are not afraid to take risks and are ready to literally live at work.
     
    We at Audiomania not only developed our own electronic business, but also talked over the whole time of its existence and witnessed a large number of ups and downs in e-commerce. And we’re ready to talk about how you don’t need to do it: in this material we decided to collect the most common mistakes that can cost your online project at the start.

    We need to start, and then - how it goes


    This is one of the biggest misconceptions of the new business, both in the field of electronic commerce and elsewhere. At first, such slight negligence does not seem to harm anyone (the project works!), But later it turns into a huge ball of vaguely defined tasks, hushed up problems and other irreconcilable contradictions.

    Who is in charge here?


    As you know, a journey of a thousand or so begins with the first step, and in this case, taking the first step along this road to nowhere is a delicate avoidance of the question of who will be the CEO 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. Perhaps you have long-standing friends, relatives, and even spouses among you. Well, how then can you break this peace and harmony and start from the threshold to find out who is in charge?
     
    Alas, this is necessary. How necessary and a full understanding of the responsibilities of each of the founders. This will fix who makes the final decision in the event of a dispute (general). Here you need to understand: as in the movie about superheroes, in business, great power 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 counterparties, 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’s still necessary to understand who is in charge in which direction. At a minimum, in order to find out whether a person is suitable for a given role or not (after all, no one claims that you will distribute all tasks from the very beginning correctly).
     
    For example, if you understand that your co-founder is well versed in technology and enthusiastically writes code, but he is “no” sales person, assign him the role of (conditionally) CTO and do not try to transfer the duties of a negotiator to it simply because early on, you all work together.
     
    Such a distribution of roles not only allows us to understand what the person as a whole is busy with and what can be expected of him - it serves as an additional incentive to increase personal effectiveness. The rule "if everyone is to blame, nobody is to blame" works fine, so if everyone is equally responsible for bugs in the code, fines in the tax and the absence of a contract with the supplier, the problems will not go away, but sticking your finger looking for the guilty will be like embarrassing (still trying 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 real power in the team) will allow us to get rid of collective problem solving, when everyone does only that what he likes / is more comfortable / more convenient, hoping that someone else will “pick up” the rest of the work in this direction.
     
    The main mistake: excessive delicacy. It seems to you that the strictness and enforcement of the rules, the “zone of responsibility” is a story about corporations (and here you have continuous harmony and other pastoral). You are embarrassed and uncomfortable, because these are personal questions. The problem is that money will not be paid to you for what good friends you and colleagues are.
     
    Decision:A business, even a family business, is, first and foremost, a business. Therefore, your goal is to learn from the very beginning to ask uncomfortable questions: who is in charge here? Who is the last word? Who will do what? Who to ask for?
     
    In this case, the struggle for the CEO’s chair can be avoided: it’s worth starting with a discussion of the areas the general will be required to deal with (as well as the areas in which he will have to bear direct administrative and criminal responsibility), and already at this stage the number wanting to lead may immediately decrease.

    A 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 kind of technical education). In fact, there is nothing wrong with that. On the contrary, initially the presence in the team of a technician 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 flip side of the role distribution, and the programmer is the most typical example, since in the absence of special knowledge what he is doing will not be used by anyone else. The vulnerability of this approach is that, as a rule, no one in the team (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, require assistants.
     
    As a result, when the programmer (consider the most dramatic case) leaves the project, the team begins to panic: what did he do? What problems did you work on? What language did he write all this in?
     
    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 crash. Then the company begins to urgently seek a replacement (after all, the site for the online store is the main channel for interacting with the buyer, and if something goes wrong on the site, all other business processes will 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 literally forced to rake the Augean stables. Because the founder programmer, of course, did not document anything, and to figure out his code is the same as reading Egyptian hieroglyphs (sometimes it's easier to do it all over).
     
    The main mistake:to think that the technical implementation of the project is a black box. If you are not a techie, you do not know how this box works, but you are not interested in it - so far everything is going well.
     
    In this case, for the founder-programmer, there is always the temptation to "start playing according to your own rules." Yes, everyone is talking about mandatory documentation, but why these conventions when you are actually working for yourself? Yes, comments in the code are needed, but only if several people are working on the project? Yes, there are more efficient / progressive solutions, but it’s interesting for me to write in this language.
     
    Decision:if you are not a techie, reduce reverence before what your IT professional is doing. After all, he is not a powerful magician from a distant stronghold who does dark things, not subject to 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 your 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 are no less fundamental point. 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 the new coder, then for himself: human memory, of course, is an amazing tool, but relying on it is at least naive .

    Let's leave planning for later


    Another point that is much easier to understand right away is planning, as well as financial and managerial accounting. Of course, when you are a small company with a tiny turnover, management accounting seems unnecessary wildness - who needs all these ROI, EBITDA and other scary abbreviations?
     
    But as the project grows, all of its business processes will become more complex, and you should not rely on the fact that you can figure out what is happening “at first glance”. It would seem that this is a common truth, but many companies are limited only to accounting (and after all, it does not actually reflect the current situation and, by definition, is directed “into the past”) - and this is only because regulatory authorities require it.
     
    As a result, extremely unpleasant situations arise. For example, in the case of providing a deferred payment to a supplier or advertising service, the online store begins to thoughtlessly invest suddenly released funds “in development”: in attracting new specialists, in office design, in marketing, in personal growth trainings for employees and other tasks, all of a sudden become extremely important.
     
    Formally (if we take into account exclusively the movement of funds, that is, cash-flow), the company really has money in this situation. In reality, however (when maintaining profit / loss accounting) it is obvious that you will have to part with them very soon (this is just a delay in payment), therefore, you can manage the released funds, but with great care - after all, this money, even if reflected on the balance sheet of the company, she actually does not belong.
     
    Of course, in the absence of an established accounting, there is no question of any sound assessment of the situation: not calculating 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 whether they will improve), the company is fully wielding them, as if it were its own funds. As a result, by the time the payables are paid to the supplier, the business comes with nothing (an example is completely wild, but this is no less real).
     
    A sudden lack of funds stimulates getting into a new “vicious circle”: lending and on-lending (in the worst case) or demand stimulation systems formally leading to revenue growth in the short term, but actually frankly unprofitable (selling goods with huge discounts, ill-considered bonus ones) come into play 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 feeling that all problems can be solved as they arise - and therefore the issues of financial and managerial accounting, as well as the planning associated with them, can be safely neglected in the early stages (this may be related to some sectors, but certainly not e-commerce). From this comes the confidence that financial issues can be resolved “on the fly”, in manual control mode - and for everything else there is an accountant.
     
    It’s important to understand that an accountant will not help you make a decision about which marketing channel to invest in and how to predict a return on these investments, he will not tell you how to manage the money that appeared due to the deferred payment and what expenses to plan for next month. In a small online store, these issues should be decided by the founder, and at the same time based on real numbers, and not by virtue of a "deep inner conviction."
     
    Solution: Yes, at the stage of creating a new company, delving into the intricacies of financial and managerial accounting can be ridiculous, but still, this is a good time to begin to understand such issues. When your store will make hundreds of purchases a day, you will not have time to comprehend the basics of financial literacy for entrepreneurs.
     
    Let now your tables, charts and indicator values ​​be obvious to everyone and everyone - so you will form the main template, according to which you will work in the future. And in this case, a template is understood not as a tablet in Excel, but as principles: behavior, data usage, decision making, which you need to work on from the first days of the company’s existence.

    Only registered users can participate in the survey. Please come in.

    What "rake" (of the above) did you manage to experience on yourself?

    • 66.6% Who is in charge here - excessive delicacy in the distribution of areas of responsibility 30
    • 35.5% The IT part of the project is a “black box” (documentation and comments in the code are not needed until everything goes well) 16
    • 55.5% False feeling that all financial problems can be solved as they arise 25
    • 15.5% There are other "rakes", now I will write in the comments 7

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