Money Money Money

E-commerce Business Management
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Being there is a lot of uncertainty with the tariffs, economy, sales, etc. I wanted to start a conversation about money and online business’.

How do you use it in your online business, do you borrow via lines of credit, credit cards, manufacturer/distributor terms, wealthy uncle who also happens to be a duck?

Where do you put your money when you want to save, what kind of emergency fund do you have, do you have a favorite kind of bank,account,CD/MM/ETF etc?

How do you fund new product lines, ventures, marketing, inventory, supply chains?

With the exception of those of you out there who may have been born with a silver spoon up your ■■■, (yes, I see the 3 black boxes) the rest of us at one point or another, have had to make business decisions based on only having two nickels to rub together. Let’s have a conversation about how to make your money work for you when times get tough, how you manage it and any pointers on how to manage money.

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We think the nature of this topic should be under Confidential.

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I don’t think anyone here will be sharing anything proprietary, personal or confidential. It’s just basic business finance practices.

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So my routing number is

5

Food for thought.

I started my business on $100 in 1984 with a friend, we were young, no debts, no assets, all the time in the world. 10 years later we had rented a 1000 sqft place, gone chapter 11 bankrupt, survived, rented a 4k sf, then 10K, then 20,000 Sq ft place, then 10K, then that fire, then, then to 1K, where I am now all in a span of 40 years.

Anyway over the course of this journey, I estimate we spent at least $4,000,000 in leases.

We had a few oppportunities to buy, but because of our growth, the cost to move, and the timing of our leases, and finances, we never did.

SO, look at where you are now in your life? In your 30s, 40s - Then I believe that depending of course on many many factors, buying a place, and leasing it back to your business, or not, can become a gold mine in your later years.

I did buy my house in West LA, so I did make my goal mine that way. But I should be a billionare now and I am not !!! Life

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This IS the way.

There’s a reason why our ever-growing Tax Code continues to provide Leasing carve-outs for assets both appreciable & depreciable.

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Wife and I own a 3400 SF home with an ocean view in a gated community in Southern California. We paid 1.05 mil for it in 2019. It has way more room than we need for two people and four pets.

I was not in favor of spending that much, nor of buying something this big. We are at the age that many people begin downsizing.
But my wife liked the neighborhood. And she pointed out that several of those otherwise unused bedrooms could be used for book storage. So I conceded.

I’ve got an office plus two bedrooms for book storage. And lighter stuff, like extra boxes and bubble wrap goes in the loft. In total, I’ve got over six hundred square feet devoted to my business.

Agreeing with my wife has brought more than just domestic harmony. We have owned more house than we needed during one of the periods when housing prices have been rising rapidly. Our house would go for about 1.9 mil if we sold it now.

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So a combo of things.
I do have a business line of credit, I do leverage HARD on my Amex Plum (Net 60 days), and I do use distros with net30. At the end of the month I like to have zero balances on everything, and when I can’t the line of credit gets used.

Business Savings account, but right now, and honestly since 2020 I have been hedging stock, buying when low priced and stacking. Did this with 20TB hard drives in 2020 when I think WD made a price error and I got a case or 2. Just installed the last one from that lot last week.

I used to do trade shows CEDIA, CES, Etc Tech trade shows, but since 2020, no one leans heavy on these any more for announcements and they just became… meh. CES started charging buyers something like $500 to get in and I said NOPE. I’m not paying boosted hotel rates, surge airfare, jacked up taxi/ride share rates (cause you have to thanks to that lovely airport design!). I mean the most normal thing about CES was the Monorail tickets. But rumors even that is going to die soon thanks to some tunnel that goes nowhere.

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An excellent plan! This is exactly what we’re attempting to do, moving to Texas! Move all inventory into the house(or storage in back yard) Plus get the full home-business tax advantage!

Right now, difficult in S. AZ to sell large, family-oriented house( 4 bedrooms w/ study/3/3 w/ pool/balcony). The Richly-Retired, of which there are plenty in this area, demand single-story, smaller homes in gated communities

I like living in a “mixed” area(middle-class bubble our left-leaning daughter calls it-she grew up here. Good-to-excellent schools w/ few security worries. We didn’t even have a front door key for the realtor!! The joke is there are as many police as residents). Live near families w/ kids and teenagers, some ‘empty-nesters’ like us, or retirees living in their forever homes. Heavy-duty HOA-very active!

We started w/ 6K that an old/dear friend, “2nd mother” left me in her will. Started in a 600 sq.loft, thought we’d never fill it up, w/ a partner w/ scholarly ties. Supposedly, he had the contacts; I had love of books/some out-dated training as a book-seller and time; recently retired from my day job-plus a line of credit, in own name..

About 7 years later, when partner got bumptious, my blessed aunt, now a century old, gave me a portion of my inheritance(3 months before the pandemic struck). No, don’t have a silver spoon, just have of friends/relatives w/ no children who out-live husbands by decades.

We decided to use our windfall to increase inventory-and warehouse space, buy out partner! A non-propitious time but we were stuck w/ our decision. Thank God, we sold a lotta books during the first year of Covid… .

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Definitely being able to maintain inventory and supplies in your residence cuts down on storage costs. But it also limits what you can hold or how you can maneuver it, and it does become cumbersome if you have pets (or kids) whom you try to keep away from stock. Plus, if you make changes to living space to accommodate your business, then there could be issues when you want to move out of the house.

All of that said, running a business out of my home made it much more fiscally possible for me personally. It doesn’t work for everyone, but it’s a good way to start out for many.

ETA: I worked hard to start and manage my business without business loans, but I found that to be unsustainable if I ever wanted to scale up. Not wanting to take out loans has been a constraint.

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Let me add, I did not have a Business Line of Credit till about 6 years ago, before then all blood sweat and tears and credit cards. I got the line of credit because I was about to take on a project that was 2x my yearly income and I wanted a cushion JUST IN CASE the client was late in paying, and I was prepared.

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At this point in my life, I can self-fund any business venture I would consider undertaking.

At earlier stages in my life I used credit card advances at promotional rates and for huge sales, arranged to have my buyers pay me and my supplier jointly when I did not have enough cash or credit.

Never needed enough money to justify venture capital. Never was willing to pay the interest on commercial loads for the business. Only time I took a commercial loan was when I bought my second primary residence. Had not sold the first home and the cost of a commercial loan for the period needed was lower than a bridge loan.

I have never been rich, but have accumulated wealth investing in the stock market. Having little confidence in the stock market in the 21st century, I have enough invested in short-term government securities to live for two years or a bit more without having to change my lifestyle.

Having grown up poor, it has never scared me. There is nothing good to say about being poor but it need not be the end of the world. This has made it possible to take the risks being in one’s own business sometimes requires.

Last trip to buy a car, the sales manager was amazed that my credit score was only 3 points below the maximum.I wasn’t, we have always been offered much more credit than we were willing to take advantage of, usually at or below the prime interest rate.

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I started doing this to make a couple bucks on the side. After a couple years I was making more doing this than my “real” job and made this full time, doing other stuff part time. I started with under $10k and just put every penny back into the business, expanding product assortment as I had the capital to do it. Never borrowed any money for this business, never will.

I’ve learned to live below my means and I’m happy with it. I grew up lower income (my father was in the military) and have more than I ever thought I would have. I don’t have a nice, fancy office or a big warehouse in an new industrial park. I’m not knocking anyone that does but I don’t have customers to impress so I spend what I need to get done what I need to get done.

As for long term planning, of course I have retirement plans and investments but as far as the business goes, I put it into CD’s at my local credit union for now. The rates are great and if I have to cash them out, the credit union charges me 2 months of interest, no hit on the initial investment dollars. If interest rates drop a lot, I would look at other options outside of CD’s but I’m good with secure returns with liquidity for now.

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True. I have special A/C venting and pet gates for this.

My books live better than I do.

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Very wise.

I knew a book seller back in the day that had a very troubling canine infestation, that if left uncheck would have contaminated his pristine collection with the dreaded “dog earred” condition.