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Feb Q/A Roundup
Hey it’s Opossum here! Welcome to my free monthly Q/A Roundup. Today’s post is on some of the best questions in the last month. Each week I write about a new topic or analyze a new digital business. If you’re not a subscriber, here’s what you missed this month:
First, thank you. I love seeing this project grow and help people.
Secondly, I feel like many of you are missing some context about this Substack and Twitter account. It is not designed like a normal newsletter. I’m not going to send out emails just to send out emails. It was designed to be read from the beginning similar to a course.
Every new subscriber should read that post to catch up on why this Substack exists. Don’t skip it. If you’ve been a subscriber, go read it before you do anything else.
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I didn’t follow the common advice of building before I buy an online business. I bought a 7 figure ecom business a few years ago and recently had to fire the management. How do I get up to speed as quickly as possible and find *good* mentors/consultants?
This is a real story from one of my followers. It’s also a great learning experience for all of you.
Never buy an online business unless you’ve built one before.
If something breaks (and it will), you don’t know enough to fix it. If the marketing stops working, you don’t know how to troubleshoot to get it back up to speed. You’re highly risking it going to 0 and you wasting a lot of money.
There are a few exceptions to this rule.
You have experience running them from your day job.
Make the acquisition big enough so you can have a management team. This is the area the small PE shops play in.
7 figures in revenue is a weird place to be in though. You can hire people to run it but not that many bodies and they’re probably not that great. A lot of risk if 1-2 of them quit. If you are playing in this space, your #1 goal should be to get ramped up as soon as possible.
You need to be involved in everything to make sure management is doing what they’re supposed to be doing and you’re learning how to run the business yourself. You not only need to be learning but you need to be meeting other people in the ecom field.
People that can advise you, teach you, and give you an outside perspective. I’d advise anyone in this position to read my Substack front to back multiple times. BUT.
In the end, there is no substitution for hands on learning.
If you make the first two mistakes, everything short of stealing from the company or sleeping with your spouse is forgivable. You can’t afford to lose these people.
The only options left when you have no connections or experience is:
Take it over and pray you keep it afloat long enough to learn what you’re doing.
Hire an agency and pray that they know what they’re doing to help you run it.
This is the problem with the second mistake. If you don’t know what you’re doing and you don’t have any mentors/contacts, you don’t know if the agency is any good or not.
70%+ of the agency model is taking advantage of business owner’s lack of knowledge in the field.
There’s some *really* good people/agencies out there but “marketing agency” is a business model for many. It’s not always a specialty of the founding team.
The large percent of agency owners have minimal experience. They rely on conning people with less experience than they do. Then they churn through fresh grads to do the work and figure it out as they go.
To be clear. All agency and agency owners aren’t bad. Many of them are actually the best in the field. BUT. You have a 2/3 chance that you’re not going to pick an agency that’s good and has the best interest of your business in mind.
Can you help me implement GA4 on Shopify?
Nope. Nope. Nope.
Just wait another month for it to be implemented with the Google Channel App. I’ll then write a guide for those that can’t figure it out. GA4 is actually easy to implement on Shopify but the ecommerce aspect is much more challenging.
For those of you that aren’t familiar with how GA actually works, it’s not as simple as just placing it and letting Google’s magic work.
The basic tag fires when the page loads. For ecommerce it’s much more difficult. A data layer has to be built that pulls in all of the product data from the store’s pages *dynamically*. From there Google grabs different data points from the data layer to send to GA depending on the page. This needs to work no matter the theme or shop setup.
I’ve grossly oversimplified the process but let’s say just say it’s a pain in the ass to build it for one store. It’s an even bigger pain in the ass to build it in a way that’s applicable to every Shopify store no matter the theme or setup. More to come on this in the next 30-45 days…
I’m going to quit my job to start a business. What do you think?
To be fair, the question was coming from someone that had a much better plan than the question leads on. He already had everything in the works, a large audience, and an immediate plan to monetize. And it will probably work too.
I just can’t, in good conscious, advise this route.
The problem is, what if your assumptions are wrong?
Then you’re quitting your job heading into a recession in a field where a lot of people are getting laid off. Hard to get another job in that scenario…
His worry is a legal conflict of interest with having a second income stream while working there. I get it. I’ve been in a similar situation. It’s a very tough choice to be in and very attractive to go out on your own when you have such a large audience.
For those unaware, a good rule of thumb is business income being 2X day job income before you quit. (after tax)
There’s 2 other options to go down rather than just taking the full plunge. #1 may actually be the only option.
Find a new job that doesn’t have that contractual requirement then start the business. You may have to take a step down. You may have to go in an adjacent field… It’s not ideal but it’s better than jumping and not having a secondary parachute.
If it works out, great. Quit your new job after 1-2 weeks when your assumptions are validated.
If it doesn’t, you still have money coming in and you’re not running negative cashflow. If you hate the job, then start searching for a new one immediately.
I’m going to caveat this with talk to a lawyer first… I would never advise this without it getting signed off by counsel to see what your employment agreement actually says in legal terms… This is not legal/financial advice. I’m not a lawyer.
If your employment agreement isn’t actually breaking the law… Just stating you’ll get fired if you do… The only risk is being fired…and potentially ruining your reputation in the industry… Then one option is to plan to quit in 2-4 weeks and start monetizing immediately with an anon WY LLC.
If your assumptions are correct, quit. You’re making enough money and it doesn’t matter.
If your assumptions are incorrect, stop the monetization and reverse course immediately. If the SEC or any government agency is involved in your job, you probably don’t even have to worry about talking to a lawyer as this route is likely illegal and you shouldn’t do it.
When should I switch to a 3PL?
Short answer: As soon as you can afford to. Do you want to spend your time packing boxes when you could be using that time driving demand and growth?
Longer answer: Unfortunately, it doesn’t make sense if you’re shipping 1-2 orders a day. Just batch and ship out 2-4 times a week.
If you’re at that level but you’re seeing strong growth, it may make sense. There’s no perfect answer here but 300 orders a month is a good number. If you’re flatlined (or slow growth) at that number or you’ll hit that number within 30-60 days, it makes sense to push forward with a 3PL.
I can’t code and want to build a technology company. How would you go about looking for a technical founder?
I wouldn’t if I was you.
Non-technical cofounders that want to team up with someone that can code and build a technology company are a dime a dozen. You need to have a skillset that compliments the technical co-founder. *Expert* marketer is a good skillset to be a specialist in.
“I will work really hard and really want to do it” is not.
There's absolutely no reason for *someone good* to found a company with you unless you're an expert marketer or cover a gaping hole in the other person's skillset.
So you have a few options.
Learn to code.
Pick a different type of company.
Spend a few years becoming an expert in marketing or a skillset where good developers have gaping holes. Become an expert, don’t just say you are…
Try to partner with someone not good and you'll have a failed project on your hands in 6-12 months.
Lastly, feel free to ask any questions in the comments below.
If you’re subscribed to this newsletter, you need to keep in mind why we’re here.
Your boss and company, no matter how nice, doesn’t care about your future. Nobody outside of a few family members and select friends care about your growth and your future.
You are the only one that can save yourself and make your life what you want it.
Single player. Just you.
This Substack is here to help you build a business and build the life that you want. I’ve laid out the basics to understand, analyze, & grow most any online business.
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Disclaimer: Nothing written here should be construed as legal for financial advice of any kind. These are opinions and observations, written by an anonymous cartoon Opossum, built up over years working in e-commerce & affiliate marketing.