Podcast Guest

Nathan Hirsch

CEO of EcomBalance

Podcast host

Martin Zerrudo

CEO SUEG Group

Martin Zerrudo

CEO SUEG Group

July 22, 2022

Achieving Long-term Ecommerce Success With Nathan Hirsch

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Nathan Hirsch is the CEO of EcomBalance, a monthly bookkeeping service for ecommerce stores and other online businesses. He is also the Co-founder of Outsource School and is committed to helping business owners in the ecommerce and online space succeed. In 2009, Nathan started a business buying and selling textbooks on Amazon. Over the next five years, he expanded the business to offer additional products and grew his revenue to over 25 million by 2021. Before EcomBalance and Outsource School, Nathan was the Founder and CEO of FreeeUp, which he sold in 2020.

Here’s a glimpse of what you’ll learn:

Nathan Hirsch shares his motivation and passion for entrepreneurship
The crucial business decisions that helped Nathan advance his career
Nathan describes his biggest pitfall and the steps he took to recover
Why Nathan founded FreeeUp
Advice for entrepreneurs wanting to start their own businesses
Nathan’s goals for building his businesses
A common mistake emerging B2B companies make
How EcomBalance helps ecommerce companies with their accounting
Nathan’s financial tips for business owners

In this episode…

As an entrepreneur, it can be challenging to get your business off the ground as you encounter hardships and failures. With so many factors impacting entrepreneurial success, how can you build a profitable and efficient business?

Life-long entrepreneur Nathan Hirsch says that mastering the hiring process is crucial for sustaining your ecommerce business. Understanding how to find great talent allows you to focus on scaling your company without having to worry about managing your daily workflow. Bookkeeping is another essential skill for business success. According to Nathan, entrepreneurs should not handle their own bookkeeping since it takes time away from profitable endeavors like sales and marketing. With EcomBalance’s accounting services, you can make informed decisions regarding spending to maximize your revenue.

In today’s episode of What Do You Do Next?, join Martin Zerrudo as he sits down with Nathan Hirsch, CEO of EcomBalance and the Co-founder of Outsource School, to discuss how entrepreneurs can streamline their business processes to achieve long-term success. Nathan reveals the major business decisions that helped him advance his career, his biggest pitfall and his recovery process, and financial tips for entrepreneurs.

Resources mentioned in this episode:

This episode is brought to you by Seller Universe Ecommerce Group.

We provide essential Amazon and NetSuite service solutions for brand growth.

Seller Universe Ecommerce Group provides essential service solutions for brand growth and scale. We position brands for success through cost-effective growth initiatives and operational efficiencies. Our synchronized approach allows brands to dominate in today's complex, multiplatform ecommerce marketplace and ecosystem.

Our team at Seller Universe not only helps your brand on Amazon, but we also do Netsuite implementation and anything that gives you a headache around inventory management.

To learn more about what we can do for you and your brand, visit selleruniverse.agency.

Episode Transcript:

Martin Zerrudo 0:00

Welcome to the What Do You Do Next? podcast brought to you by Seller Universe Ecommerce Group. Whether you're just starting your ecommerce journey, finding ways to grow your online brand or can't seem to find the right tool or partner to help you break through. We're here to help. We interview experienced sellers, strategic service providers and other ecommerce experts who will help you answer the question. What do you do next? Hi, I'm Martin Zerrudo, the host of the What Do You Do Next podcast? Whether you're just starting your ecommerce journey, finding ways to grow your online brand or can't seem to find the right tool or partner to help you break through? We're here to help we interview experienced sellers top strategic service providers and other seasoned ecommerce experts will help you answer the question. What do you do next? This episode is brought to you by Seller Universe Ecommerce Group. We are a global ecommerce agency providing essential Amazon NetSuite and Shopify services and solutions are brand scale and growth but today, the star of the show is Nathan Hirsch. Nathan Hirsch. Am I pronouncing that correctly? Hirsch? Yeah, Hirsch got it. Fantastic. Nathan Hirsch is a lifelong entrepreneur and currently the CEO of EcomBalance and Outsource School. Nathan started his first business in 2009. From his college dorm room buying and selling textbooks on Amazon in the next five years he expanded it into other products and scaled it to over 25 million in total sales now in 2021. Just last year, Nathan co founded EcomBalance an online bookkeeping service to help ecommerce business owners better master their finances and bookkeeping dope. Oh man, we need that help. After interviewing 100 plus ecommerce business owners, it was clear that there was a need for a better solution in the market. Nathan decided to tackle it and the company is growing quickly. Originally from Massachusetts, Nathan now lives in Denver, Colorado with his wife and two dogs. Hello, Nathan. Thanks so much for joining us on the show.

Nathan Hirsch 1:46

Yeah, thanks so much for having me. Appreciate just being here.

Martin Zerrudo 1:49

Of course, question number one, the two dogs what are their breeds?

Nathan Hirsch 1:54

They're actually two months. We rescued both of them. We actually got one of them tested and it came back 15 different breeds. And so yeah, my wife is Vietnamese, and one of our dogs that when we got tested, came back part Asian whatever that means. So I thought that was kind of fun.

Martin Zerrudo 2:13

Like it's a furbaby it has ever been. Oh, there you go. And why why Denver you are from the East Coast moved a little bit inland welcome.

Nathan Hirsch 2:21

Yeah, so we sold FreeeUp at the end of 2019. And I've been living in Florida we moved from Massachusetts, I would just go and Connecticut right there to Florida to grow our Amazon business which eventually became growing FreeeUp and once we sold FreeeUp and then the pandemic hit, we were kind of stuck inside and wanted to change and didn't really have any ties to Florida outside of my wife's family who's actually visiting Australia now. And we decided to make a change.

Martin Zerrudo 2:46

Now that's fantastic. You know when somebody hears that you started and you know you help start and still FreeeUp you know, college or selling textbooks. Now you're working on EcomBalance, and with the other one is online, Outsource School. Yep. If I may ask, How old are you now? Nathan? I'm 3333 years old. So somebody listening right now saying man 33 barely have done anything in life. And this guy has started sold and started multiple companies. Where did that entrepreneurial background come from? Yeah, it's

Nathan Hirsch 3:19

a good question. I growing up my parents were both teachers. So I kind of grew up with the mentality that I was going to go to school, get good grades, get into a good college, get a job, have health insurance, save up, retire and be honest. Yeah. I mean, that's what they did. And they they're crushing life. I mean, both of them were were teachers at middle class they saved through my whole childhood. They retired right on time, and they actually live in Colorado. Now they moved here. And they just traveled nonstop. It's hard to keep track of where they are in life. And no, definitely not. But I think I realized early on that, that it wasn't for me. My parents always taught me finances and they made me get jobs from the time I was 15 on and I really hated working for other people. I didn't love the the anti creativity and following other people's rules. So when I got to college, I was pretty determined to start my own business. I just didn't know what that was.

Martin Zerrudo 4:11

Got it. So, you know, everybody says, I don't see everybody but everybody who wants to start their own businesses. You know, I can't work for somebody else. I want to be my own boss. Can you talk to us a little bit about what that feels like to work under somebody that may feel that you may feel like it's stifling your growth or stifling where you're meant to be. And then now how does it feel to literally be your own boss?

Nathan Hirsch 4:31

Hey, yeah, I think so. I've always had an issue with authority. I think that that now I'm a little bit more mature that that maybe I was in high school but didn't love even like listening to teachers back in the day, which is ironic because my parents. So a little bit of a troublemaker, not not too bad. But I remember I had this internship at Aaron's sales and lease. It's kind of like a rental center in Massachusetts. The CEO Dave Edwards was a friend of my mom, which is how I got the internship super lucky. And he was never in the store like you would show up once a month, and he would be on his phone and he was nice enough to let me ask him questions and, and I getting to know him a little bit. He was like, Yeah, most of the time I'm golfing. I'm like working on my phone, I, I really come into the office, I work my own hours. And in my mind, it was like, a lightbulb went off. I was like, Whoa, this is so cool. So I always kind of strive to be like Dave Edwards. And I think that's when it actually came into play. It's like, wait a second, if, if I become Dave Edwards, then then I don't have to listen to the people. I don't have to show up to work on time. I can set my own rules, I can build things and it seems a lot more fun.

Martin Zerrudo 5:38

Of course, now they always say, hey, get grass is greener on the other side? What are some of the pitfalls you have all the autonomy and the ability to set your own schedule? What are the pitfalls of challenges to being an entrepreneur?

Nathan Hirsch 5:48

Oh, definitely. I mean, the four years of FreeeUp, I felt like I was working 24/7 to try to keep the business alive. Like there'd be emergencies on weekends or nights. And it wasn't, wasn't the best for my relationship. My wife's a saint for hanging with me. And now that we've sold FreeeUp and I'm in a much just better place. It's it's good to have weekends off and nights off and know that bookkeeping is a much more nine to five business. There's very few emergencies at 2am on a Sunday in the bookkeeping world. So for sure. So that's kind of nice. But yeah, I mean, there's lots of sacrifices, there's lots of long hours, busy season for our Amazon business for for seven straight years, I would have a big Thanksgiving, and around six o'clock, it would be Black Friday time, and I'd go to my computer, and I wouldn't leave my computer for the next six weeks and just work and and try to get through it. And we're pulling all nighters drinking Red Bull, and there are lots of sacrifices you have to make along the way.

Martin Zerrudo 6:45

For sure, you know, for us Sell Universe, you can see it behind me, right, you know, when we talk to potential clients that we would partner up with the first slide is we scale passionate ecommerce brands, because that they have to be passionate, you can make money, a lot of different ways with a lot of different people, but you want to do it and be successful with people who really have a passion and a purpose and a reason for why they do what they do. So for you, you know, six weeks living off Red Bull, you know, sleepless nights weekends, where you're taking meetings, what is that passion that's driving you to continue to move forward?

Nathan Hirsch 7:19

Yeah, good question. So I mean, for, for me, personally, I wasn't that I didn't find as much fulfillment, doing b2c as I did, as I do. Now b2b. And that's more of a personal thing my way. I mean, with FreeeUp, it was my first experience, growing a brand and going on podcast and networking with different people in the space and meeting influencers and meeting people that are way more successful than I was at an event now. So a part of that, and being able to actually help people, people would make really key hires for their company in FreeeUp and I talked to them over the years as their company was growing. And because I matched them up with that person, it was helpful. Same thing with bookkeeping, or even Outsource School where people take our hiring, process and implement in their business. And you have people that have been terrible at hiring for six years. And all of a sudden, they're making a plus hires, and you actually get to make a difference. So for me that's fulfilling, I also find a lot of fun and building and taking care of our team. When we, when we sold FreeeUp, we were able to take $500,000 from the sale and give it to our team in the Philippines or our internal team and hopefully change their life. So there's a lot of benefits of helping obviously your clients and your internal team and even people like my business partner or families and, and being able to just contribute in a lot of different ways.

Martin Zerrudo 8:37

Did you ever have that conversation with your parents were like, wow, I just sold my first company or you know, we made 25 million off Amazon. What are those conversations like with your parents who seemed to have you know, humble beginnings and they see their son now? 33 years old, just crushing it?

Nathan Hirsch 8:52

Yeah, my parents have always been really supportive. Now, with that said, they've always been very financially conservative, like they always wanted me to take the safe bet to invest less in stocks, more savings. But also, when I was going to graduate college, I had this Amazon business and no one really knew what Amazon was at the time. There were no coaches, consultants, conferences, the wild wild west. Exactly. And so I had a full time job offer with benefits and it was a good career path. I had an internship there and it was the big decision. Do I turn that down and run my Amazon business that could disappear tomorrow? Or do I take the take the full time job? And I mean, looking back on it, it seemed super easy at the time. It wasn't it was very stressful and my parents were were gonna be supportive of me no matter what I did, but they were definitely leaning more towards take the take the job. My parents made it very clear to my sister and I that we were not moving back in after college. So whatever we whatever we were doing when exactly we had to get a job, get an apartment, pay rent, don't end up on their doorstep. Homeless and they'll be happy. So I think now that they're obviously think I made the right decision and they've been super supportive from the second that I made the decision to focus out of full time, but I think they definitely were leaning more towards the safe side.

Martin Zerrudo 10:13

No, that's fantastic. Can you walk us through what that internal conversation must have been?

Nathan Hirsch 10:17

Yeah, sorry. I missed that part. Yeah, so I mean, they've seen the ups and downs so the Amazon business was doing really well. And then we Amazon became harder and harder. There were more competition competition, were drop shipping, drop, shipping became harder. And then one day I tell them, hey, I'm starting FreeeUp. And coincidentally, I actually get robbed very close to when we started FreeeUpmy wife and I, that someone went through our apartment, like stole our laptops, and real they stole my wife's car, like all bunch a bunch of stuff. So

Martin Zerrudo 10:47

I'm so sorry, no, this

Nathan Hirsch 10:49

is years ago, so and so this is 2015 ish. And so we move out of that apartment because we didn't think it was safe. And we're in Florida, we're temporarily living on my on my wife's parents couch, and I'm starting this new company FreeeUp like typing on my computer all day, while everyone's going to work, the Amazon business isn't doing well anymore. And they continue to disbelieve in me and they kind of saw me grow FreeeUp from that to having 1000s of freelance on the platform to getting an actual offer to purchase the company and and going through the six months of stress that that was trying to get this deal done. And and when it when it finally got done. It was a huge sigh of relief. And I remember being there on Thanksgiving shortly after because we sold it in November, and kind of telling them the details and how it went through and then just being like, wait a second, like you're not checking your phone right now. Like you're not checking your emails like this is a new Nate like we haven't seen this time. I was like, yeah, like this next week, like I'm all yours. I got nothing to do so. Yeah, it was it was very unique, and they couldn't be more proud, I think from their side.

Martin Zerrudo 11:57

No, that's fantastic. Let's pause here. People are hearing this man, this guy's fantastic. FreeeUp Great. Amazon 25 million great starting EcomBalance seemingly Great. What would you say are some of the misconceptions that people might have? Because it seems like and I know you're selling sound like a really awesome guy. But what what do people not see? What are the what are the things that they don't know?

Nathan Hirsch 12:21

Yeah, so let's talk about some some horror stories. So, I mean, you're like to have my Amazon business three of my Amazon business, and I am on top of the world. I'm in my young 20s I, I'm in a junior or senior year in college, maybe early senior year, I'm, I'm I'm making more money than any 20 year old could and I'm about to like, get to freedom in the real world. And I'm taking a job like everyone else, and I'm riding high. So I go on this vacation to Myrtle Beach. And I swear I'll probably I'll probably never go back. So on the first day on my vacation, I get a call from my manager who I'd spent the last six months training telling me that his mom he was a college get didn't want him working and going to school. So he was quitting on me. So six months of training down the drain, I'm on vacation, all of a sudden, I'm losing a manager. That's bad enough, then I get a call from our biggest supplier telling us that they no longer wanted to work with us. So we had all our eggs in one basket 99.9% of our sales coming from one supplier. They dropped us they said you got a week to keep selling our products and you're done. And then just to top it off, same day I kid you not I get a call from my accountant that someone filed a fake tax return in my name and stolen my identity and had gotten a $40,000 tax return from the government in my name. And I was gonna have to deal with that when I got home. So I went from like this unbelievable high to like, Oh my God, everything I've worked for for the past two plus years is is coming crashing down moolah. Same time, same day, all three phone calls.

Martin Zerrudo 13:57

What is going through your mind? In the

Nathan Hirsch 13:59

Yeah, I mean, I was on vacation with my business partner, Connor and we just talked about it and drank and complained and probably handled it in a very immature way. Because we were in our young 20s and try to enjoy a vacation that I'm sure we did. And when we got back I mean, we got back to work. We were like alright, what did we what did we learn from this experience that maybe having one person running the whole business isn't the best idea. Let's try to divide up segments of the company and train. So if someone quits, it's very easy to replace, and it doesn't take six months to get some ongoing. Let's diversify our suppliers. So again, if we it same thing doesn't happen if we were all eggs, all eggs in one basket. And before we knew it, we had hundreds of suppliers. We're working with our peak Amazon going after that I think we had like three or 50 suppliers. And then the tax return was a ton of paperwork and wasted time and not that much fun but it wasn't my money that they stole and now I have a pin that I use the rest of my life to file my tax return so no one can can do that again. So I'm I mean, it ended up being a really big lesson that we still use to this day and all of our businesses diversifying. But at the time, it was horrible, and then having to go back and tell my parents, which, in their mind, they're like, alright, that's the risk of being an entrepreneur. Like, that's why you take the real steady job where this doesn't happen. And again, looking back at it, it's all great. But at the time, it was a horror story.

Martin Zerrudo 15:23

Holy, so you're 33? Now what would you have said to your young, 20 year old self with everything that you've learned up until this point in business and entrepreneurship and the challenges that you face? What would you have told your younger self then

Nathan Hirsch 15:34

to stay more neutral? So I feel like with entrepreneurship, your first few years, like every time things are going well, you think you're gonna conquer the world. And when it's not, you think your life is over, and you're gonna be homeless. And now it's a lot more even keel like even today, we had some issues with our new software for EcomBalance, I had nothing to do with client stuff. But the back end portal that our our staff uses, and the Old Navy probably would have freaked out and be like, what's going on? This is chaos. Why can't our developers do this? The old me, the new me is like, listen, it's a problem. It's got a solution. Let's brainstorm it. Let's fix it. Let's figure out how to prevent it from happening again. And when things aren't going great, like like peak FreeeUp last year, before we sold it, you're like, listen, anything can go wrong, like this deal could fall through at any second, we have to stay focused on growing this thing. And let's not take anything for granted, which really helped us because we had some of our best months right before the sale because we didn't just assume the sale was in our back pocket. Because we had a good business, we stayed focused on growing the business and in case it didn't go through. So that's what I would tell my younger self,

Martin Zerrudo 16:36

for sure. You know, when you were starting FreeeUp first of all, where did the idea come from?

Nathan Hirsch 16:41

So back with the Amazon business, I was hiring a lot of college kids. And if you can imagine college kids were not the most reliable they were you like my business partner. And the me to uncross that now, which is kind of cool. One of my first employees in college now owns one of the biggest sporting games out there, big shout out to them. But outside of like those select people, most of the college kids we hired were smoking weed on the job drinking the job showing up late I remember knocking on people's doors to get them to wake up to like come to work. So it was a bad experience. And we we also knew we were investing a lot of time, energy and money into training people that probably weren't going to work with us long term anyway, right. So a buddy of mine told me about the virtual assistant world and the freelance world. And we started using Upwork and fibers and made some really great hires really by luck. We had no idea what we were doing. And meanwhile, we're just every time we have a job posting, we're interviewing like 100 people, and it's it taking so much time to get through people. And meanwhile, our hiring process is getting better and better. But we kept looking for a better solution and Upwork someday, someone that would prevent people before they even introduced them to us. And people that already had ecommerce experience, because that was kind of rare at the time, like now there's a lot of agencies and stuff like that none of that existed, most people didn't have like Amazon listing experience or whatever it was. So we built it, we essentially took the VAs and freelancers from our Amazon business, as that was starting to struggle. We started leasing out to other ecommerce sellers and quickly ran out of RBAs and freelancers and started recruiting and eventually turn that into FreeeUp, a marketplace to connect pre vetted VAs and freelancers to, to ecommerce sellers around the world, eventually agencies and stuff like that. But that's really how the idea came about and off the ground. For those

Martin Zerrudo 18:31

who are listening, you know, the idea for FreeeUp came about from a situation that you were dealing with that you're trying to, you know, is it always the idea comes or is born out of, of an issue that you're currently facing? Or for somebody who's listening, I just want to have my own business? Are there ways that they can find find ideas out there?

Nathan Hirsch 18:48

Yeah, I mean, there's definitely both right, my Amazon business, I was drop shipping baby products. I'm not sure I've reinvented the wheel, their 20 year old single college kid that didn't really I wasn't very passionate about Amazon, or I'm sorry, I wasn't very passionate about baby products. So the business had a lot of success. And maybe if we had gone into private label or something we'd still be selling. But it but for us, like FreeeUp solved a real need. We wish we were looking for a free app. So we built it Outsource School. Man. I wish back in the day someone just said here's a great hiring process. Here are the interview questions. Here's how you onboard people. Here's how you run meetings. That's a real skill that entrepreneurs need to have and a lot of people don't realize that that can be a make or break and EcomBalance. bookkeeping. Bookkeeping is something we did really bad with our Amazon business and the first few years we got better at it. With FreeeUp the best thing we ever did was get a bookkeeper started from day one. So that we had immaculate books, we can make decisions on what the numbers are telling us. We're billing clients accurately. When we went to sell the company. We had four years of Immaculate books to pass due diligence. And so we were creating the service that again while we were going through time Trying to find search spiders we wish that we had found and instead we just hired internally. So that's how we started to look at it. But I don't think it's a necessary thing for all businesses.

Martin Zerrudo 20:10

For sure. When you started up, let's say the Amazon business was the goal always to just, you know, save enough capital to start the next business. Was it to sell to an aggregator? Was it to create the empire of baby products? What was the ideal goal for Amazon?

Nathan Hirsch 20:24

So call us naive. Our original goal was to like take down Amazon and like be bigger than Amazon one day. I mean, I yeah, this

Martin Zerrudo 20:32

was a crazy, somebody always takes down the bigger fish. It happens. Right. And

Nathan Hirsch 20:36

I mean, this was before like the Shopify is of the world. I remember building our own website before that. So we could have gone that direction, too. But yeah, I'm not sure we necessarily have like a 1020 year plan, we're in college, we're still like, Hey, we're making a lot of money drop shipping payment products, like we're going to become the next big ecommerce website. And it didn't play out that way. And I mean, FreeeUp, I guess we kind of have the same thing. We're like, Hey, we're gonna go out to the big players, we're gonna go after Upwork and Fiverr, and be a bigger alternative. And even with EcomBalance, we're competing with bench and xendoo, and a few others. So I think one thing we've kind of learned off of it is, we like big markets, right? Baby Baby industry, gigantic. Hiring space, enormous bookkeeping, financials applies to every business out there. So yeah, I think that that was kind of a lesson through that, but I'm not sure we had a great 10 year plan for the Amazon business. And for

Martin Zerrudo 21:27

FreeeUp, was it always the goal to sell it? Or what was the what was the 10? Five year goal for that?

Nathan Hirsch 21:33

Yeah, so we never even now we don't build businesses to sell them. That we that was actually acquired by one of our clients. So one of our clients that was using her way, and loving, FreeeUp. Yeah, they reached out and they said, Hey, we buy companies we own like, 15 companies right now, we want to get into the freelance space, we know it's growing. We don't want to build it from scratch, would you guys be interested in talking and we really just heard them out. And they asked a lot of questions. We answered them, they ended up making us an offer. And at that point, we were kind of weighing a lot of things from the economy being high, again, pre pandemic, but at the time, the economy seemed like it was in a high place, to hey, can we really take this from 12 million to 25 million without making some pretty drastic changes that have their own risk to, hey, what's the best move for our team in the Philippines, if we don't take this offer, and we run the business into the ground? That's not necessarily fair to them. So let's turn off the things being being considered. But even now we build our businesses. So they're, they're sellable in the sense of they have great financials and a great team and good systems and processes, and hopefully a diversified client base. But it's not like we're we woke up one day and we were like, even early 2019. Before FreeeUp, were like, Hey, we're gonna unload this business. By the end of the year, I was growing FreeeUp and that just kind of happened.

Martin Zerrudo 22:48

What are some of the, you know, essentially a service based b2b product? What are some of the mistakes that those who are entering into b2b service based industry make today, I guess?

Nathan Hirsch 23:02

Yeah, a big thing is billing clients. And this kind of goes into bookkeeping and financials. I mean, we've set up a billing system from day one, there was never a time that we had $100,000 and accounts receivable and we were chasing people for money. We created a system where we kept a client's credit card or ACH on file, they get auto build, it was cashflow positive, we get paid before we paid the freelancer, we would add in a little deferred period in case there are any issues we can handle it. That's a big piece of it. Customer service is a big piece we live in the day and age of 24/7 customer service or close to it. So Korea, we actually created a schedule we had people on all the time, seven days a week 24/7. And so that was a big piece. And another thing is just marketing. I mean, it was our it was our first real experience building our own brand with Amazon, we were just list products and the Amazon had its own customers. With this, we needed a website we needed SEO, we need to blog, we needed to go on podcasts, we needed to create an affiliate program which is another big tip day to have a good program with FreeeUp who is 50 cents for every hour that we build a someone that comes to you forever. For EcomBalance it's $50 a month reoccurring for as long as someone's a client. So testing that we always try to have the best affiliate programs out there. And by the end of three, we're paying out like $400,000 a year in affiliate money. So that's a lot of 50 census. So stuff like that adds up. But all that stuff that kind of goes under the the marketing SEO umbrella is a big piece of it that that we had to learn from scratch.

Martin Zerrudo 24:33

When you say you know we had it all Ach, was there not a significant cost in having all that automatically debited versus you know, manual invoice.

Nathan Hirsch 24:44

I mean, I think it's cheaper, like you pay the same credit card fees or ACH fees whether you keep someone's card on file or whether you invoice them and pay it you end up spending a lot more if you invoice them, then you have to hire someone to follow up with them for payments, stuff like that, but Yeah, there's there's no real additional cost there. And most of that stuff like you don't have to build it yourself, you can use stripe or pay simple or, or whatever it is. And we always have a developer that's building certain things. So there, we have our own payment pages and stuff like that. But we try to automate that and make it as easy as possible.

Martin Zerrudo 25:17

I guess, you know, because we're going through that right now. We're trying to have stripe implemented across the board, there is a transaction fee to it. So I guess the the initial cost, or rather, the recurring costs of having stripe, outweighs constantly having to chase people to pay invoices, because it's not automatic every month.

Nathan Hirsch 25:37

Yeah, I mean, if you're invoicing people, like if you invoice someone on PayPal, it's 2.9%. If you invoice someone on stripe, it's 2.9%. And depending on the situation, there might be slightly higher, slightly lower. But for the most part, it's 2.9%. So I don't there's no like monthly fee for stripe, there's no monthly fee for PayPal. So if you're able to keep people on file, there shouldn't be an extra fee. Maybe I'm just not thinking about that.

Martin Zerrudo 25:58

Okay, we have finance meeting in like two hours. So I'm going to like hey, listen to this conversation, we're going to do exactly how, how Nathan was doing it. So now you have EcomBalance. And, you know, we have an accountant, we have this conversation all the time about, you know, bucketing and and allotting certain, you know, your your revenue in certain areas. What are some of the challenges or some of the mistakes that clients who come to you and need your assistance with? What are some of those things that you see often?

Nathan Hirsch 26:31

Yeah, so to be clear, so EcomBalance, we don't offer tax services, it might be something we add later. But the way that we've always set up our businesses is we have a tax, we have an accountant, a CPA, and we have a bookkeeper. And they each are specialized in their own things. A lot of times, accountants aren't good at getting your monthly books on time every month, they're not good at display in a way for you to make decisions, because they're doing in a way for them to file taxes. And they just cost more to do your bookkeeping. And there's some diversity issues there. If you kind of heard my horror story, like I started a client yesterday who had an accountant who's also doing their books, that person, something happened to them, and now they need to replace both. So for us, it's an accounting for tax, which we can refer someone or you can use your own. And we do the bookkeeping, and we do monthly books. So we charge clients on the first we get them their income statement, balance sheet cash flow on the 15th. We have very customized reports that show trends in your business you can compare to last month, you can compare to same month last year, and you can see the health of your business, and different ways things are going, which is really important. And there are added benefits to having clean books like there's no stress at the end of the year, when you go to do your taxes. When you go to sell your company, you pass due diligence if you're going to get an investment or a loan, or venture capital or whatever it is. But to me, the real thing that applies to everyone is good monthly decisions every month based on what the numbers and the trends are actually telling you. And each business has its own segmentation, too. If you're if you're an ecommerce business, and you're selling five different skews, you need to know if one of them is profitable. And the other four aren't. Yeah, exactly. These are decisions you have to make. So a lot of entrepreneurs, they're making decisions based on what's coming into their bank account or by God, or whatever it is. I encourage people not to do that and make decisions based on real numbers and trends. But also our core services, the monthly books, if someone's behind on their books, and then we catch up or clean up, we can do that. If they're using us for monthly bookkeeping, and they want additional services like cash flow projections, or AR AP sales, tax payroll, we can do that. But our core services that monthly bookkeeping.

Martin Zerrudo 28:36

No, that's fantastic. What would you say are some of the barriers of entry and using EcomBalance. So there are certain conditions that they should have first before this would be an ideal solution for them.

Nathan Hirsch 28:46

So our monthly minimum is 250 a month, which honestly, I think it is not that expensive compared to our market research. So obviously, if you if 250 a month is too expensive for you, then it wouldn't make sense. With bookkeeping, there's an integration period, like from the point you add a payment method to the point we get access to everything and have a kickoff call. That's my number one focus right now we just hired integration person, we're working to make that process as easy as possible. At the same time, you want to integrate with us because if we get a view on the access to everything we need, that's a one time thing and then we don't have to bother you every single month for statements or information because we have it so I would say that is I think in the perfect world people wanted to like add a payment method and boom, we're doing their books, when in the real world that's not 100% possible. And outside of that, I mean, I don't know what are their limitations there are we're very focused on customer service and accurate data and all of that. I would say if you're intermingling like personal and business or doing anything unethical or anything like that, well we probably stay away from you. But yeah, we try to we tried to make it as easy as possible.

Martin Zerrudo 29:51

In terms of managing the financials, how would this compare because we provide NetSuite services its financials that's connected to a lot of different things is EcomBalance capable of doing something similar, or is a different type of segment of clients that you guys provide services to?

Nathan Hirsch 30:05

Yeah, so we're only compatible with QuickBooks in Xero. So we don't do anything with NetSuite. Some people use NetSuite and QuickBooks, which we can work with. We're not trying to reinvent QuickBooks, we're not like building our own QuickBooks replacement or anything like that. We do have our own software behind any business that we build. To be honest, it's mostly for our internal team to help automate stuff on their side and make it easier. Clients have a portal, they log into their reports get uploaded their their affiliate links, their their billings, there will add different features. But right now, it's an MVP mode, minimum viable product. But we're a real bookkeeping service where we're doing the service in QuickBooks and using a to x post just providing you a software where you just do it yourself.

Martin Zerrudo 30:45

Got it? What are some of the words of advice that you have? For those who are listening early? You know, I'm on Google Sheets, I just looked at it once in a while, you know, I think we're profitable, I think we're, you know, I think we're bringing in enough money. Because the elasticity of workforce versus clients who are coming in is always a constant challenge, right? Especially in a service based industry. When you say, you know, we want to have the right information to make the correct monthly decisions, that resonates with me a lot. Because it's so important to not make assumptions based off of what's money coming in versus money coming out. So what pieces of advice would you have to our listeners who are struggling with really making financials a focus, even though it should be as a main pillar, obviously, of any successful business, but what do you think is the challenge for why I guess finances aren't as sexy to think about and why it should be?

Nathan Hirsch 31:34

Yeah, I mean, to me there, there's kind of two main parts of your business that dictate dictate sets and failure, and that's finances, and that's hiring, if you can't hire, you're gonna struggle to grow. If you don't have finances, eventually, it's gonna bite you in the butt. My overall mentality is that entrepreneurs should not be doing their own books, for two reasons. One, it's not a good use of their time, they should be spending their time growing their business and, and there's no serious entrepreneurs out there that are spending 20 hours a month doing their own bookkeeping. And second, most entrepreneurs aren't good at it, I would say nine times out of 10. Any entrepreneur that spends time doing their books are just gonna have to go back and pay someone to do it correctly. Anyway, and there's a lot of disadvantages from paying taxes incorrectly to not being able to sell your company or get investments to running into IRS issues. So get get someone who knows what they're doing someone who knows ecommerce, if you're an ecommerce seller, to do it properly from day one, spend your time on sales, marketing, expansion, growth, all of that kind of stuff. And if you're doing bookkeeping, use one of the big players don't use Wave accounting or GoDaddy books or whatever it is, or Excel, use QuickBooks use zero, we can have a whole conversation about NetSuite, but use the use the main ones, and you're going to be happy. Yes, there's a $50 monthly fee, if your business is going out of business, because you can't pay QuickBooks $50 a month, there's other issues with your company. And there's do it right from day one, if there's one thing I learned from my Amazon days is, it's a much bigger pain to go back and fix stuff than if you just hire a bookkeeper from day one in your company. And if you're already into your company, hire someone now get someone to clean it out, get it caught up, you're gonna even if you pay a few grand, you're going to be so happy that you have a good monthly system going forward. And you're never no one ever gets their books cleaned up and has a good monthly system. And then regrets doing that. And my last tip is just have a meeting on your calendar every month, on the 15th or before with your business partner with your team leaders and go through your books together and make decisions and that's a meeting you do not miss you do not skip over it. You don't have to dive into QuickBooks, you don't have to do your books. You do have to get those reports on time every single grace and go through them together.

Martin Zerrudo 33:47

No, I'm I'm happy you said that. Nathan, you know, for us obviously we're in the service based industry as well when we talk to our clients we're whether it's NetSuite, you know, services or Amazon account management, there's always that push and pull right of, you know, my profit margins already X, you know, paying another third party or vendor or somebody to do it versus in house or for me to do it myself, you know, eats into my profit. You know, for you who's obviously run successful businesses in the past and currently right now what what is the benefit to make that initial investment but it may eat up a little bit of of your monthly and a little bit of your profit margin. They're the experts.

Nathan Hirsch 34:23

Yeah, quality decisions like there. There's nothing that is better than quality decisions in business. And even if you're doing it off your gut, even if you've been in the business for a while or whatever. If you don't actually know what the numbers are telling you. You're going to struggle to make those decisions consistently. You might get lucky, you might have a good gut and steak, but you're not going to make those quality decisions every single month and other stuff down the line. Just becomes worse. Tax season becomes more stressful as you try to put stuff together. If you ever want to sell your business, get bought by an aggregator get funding our investments, they're going to demand clean books. I know a lot of people in those space He says and they're not touching any company that doesn't have their books together, that's a bare minimum to pass due diligence and the like, you don't want to put yourself in that situation too. You never know when you're going to need clean books, whether you last minute you need funding or whatever it is. So just have that stuff, get it get a good system with with a service provider where the month ends, you get a report within 15 days and you go through with your business partner and you don't have that system get it set up.

Martin Zerrudo 35:28

Nice. Is this like? Is EcomBalance and outsourcing? I want to get the name correctly Outsource School, Outsource School is that it? Is that like, Okay, this is where Nathan's gonna be for the next 510 years? Or is this just the tip of the iceberg?

Nathan Hirsch 35:45

Yeah, I mean, if you look at my past history, I stick stick with it until it's through. So my Amazon business I ran for seven years and during that time, that's all I did FreeeUp I ran for four years during that time, that's all I did. Outsource School is a little bit passive, which is the only reason why I'm able to, to run two things at the same time. But most of our times focus on EcomBalance and and that's my business for the foreseeable future. And I love EcomBalance for a lot of reasons. I mean, there's a lot of different directions we can go way down the line, whether it's adding taxes or other services, I think you learn a lot building a business like that, that can help you maybe I maybe I want to acquire a different business in the future and, and FreeeUp your EcomBalance has a lot of benefits there from from my learning site. So you can balance it like we're going for, but we're going all out trying to the moon.

Martin Zerrudo 36:38

First of all, thank you, Nathan, we have Nathan here talking to us, you know, founder of FreeeUp now working on EcomBalance. At the end of the of our podcast episodes, we usually a lot some time for a guest to say thank you. So at such a young age superduper successful who are some of the mentors, people along the way, that's really been pivotal in helping you and your success.

Nathan Hirsch 36:57

Yeah, I mean, sometimes you take things for granted. And I know I did growing up. So I two loving parents, they were very supportive. We were middle class, they were both teachers. I went to school with a lot of kids that they had everything that were doctors, lawyers, their parents were doctors, lawyers, dentists, business owners, whatever. And I think in that perspective, you're always jealous of what other people have. But now I kind of twist that so my wife and I were foster parents and here you're dealing with a situation where people's parents are maybe not the best that weren't supportive weren't there for them were abusive, whatever it was, and you kind of see the other side and you realize how lucky you are just have two people that care about you that are healthy that are in your life that put food on the table every single day. So with without that, I mean there's so many just advantages that you don't think are advantages what when you grew up just the the to have someone pushing me to do well in school or whatever it was like that. That's something that that not every kid has, or my dad teaching me finances as a young age and how to open a credit card like all that stuff on again, you take it for granted, but not everyone kind of has that opportunity. So it's just we're just appreciative while parents

Martin Zerrudo 38:04

know it's fantastic. any mentors or colleagues that you respect to the industry that really helped you in the calm space to really grow?

Nathan Hirsch 38:10

Yeah, Chad Rubin is someone I look up to he just sold his company as Cubana is working on another company. And yeah, I mean, I definitely look up to him. And he's someone who's been able to raise funding that I've never done and and, and really capitalize on that and have an exit where everyone wins. He started the Prosper Show. He was one of the he didn't start it. But he was one of the founding people. They're one of the initial founders, along with a lot of other things in the ecommerce space. I remember seeing him speak at the conference and that made me want to speak at conferences, so definitely see him throughout the year. Which conference Did you see him speaking? So your question um, Ben six years ago? I don't remember I want to say it was in Miami or something.

Martin Zerrudo 38:53

Right? Right. Right. It's nice and warm. So EcomBalance obviously he's covering the financial side of a business other other tools or software service providers that you would recommend to kind of flesh out a successfully you know, a good foundation for our business.

Nathan Hirsch 39:07

Yeah, I mean, FreeeUp still around, we still use them at for our iron Outsource School is there if you need a good hiring process, we use a 2x to connect from Amazon to QuickBooks or Xero. So that's a must have if you're using a bookkeeper that and you're an ecommerce seller and you're not using a 2x I would question that that bookkeeper and what they're doing

Martin Zerrudo 39:27

what are you doing?

Nathan Hirsch 39:30

Yeah, other other tools I mean, I'm a big proponent of slack which is funny because everyone's using Slack but we actually FreeeUp on on Skype for four years and when we sell Skype yeah when we sold FreeeUp the first thing that the people did was move it off Skype and to Slack and that's what we do in all our companies

Martin Zerrudo 39:47

nice nice that maybe another young people using discord now running programs out there. Now that's fantastic again, thank you so much, Nathan for joining us. I feel like we just literally this is like not even 10 And percent of your success, your life and everything that you're doing right now. Um, any final thoughts to our listeners out there who, who just need that extra push that extra push to really start their business and get it going?

Nathan Hirsch 40:13

Yeah, I mean, it's focused on like minimum viable product. This is kind of my biggest advice even with EcomBalance like businesses fail like that happens it happens a lot. So with FreeeUp, like we got minimum viable product out there, we made sure we could sell it and that it worked and people are happy before we just started dumping Time, money energy. Same thing with EcomBalance, we did a ton of market research. We have a blog article on my EcomBalance blog of all the research that we did before we even put a cent and EcomBalance. And yeah, get out there. And if I can help in any way connect with me on social media, pretty easy to contact, love networking with other entrepreneurs. And if you're just using Outsource School, contact us on the site, we'll have a special deal for you. Do you want to get in there and for EcomBalance mentioned this podcast and you get two free months of bookkeeping.

Martin Zerrudo 40:58

That's fantastic. And the websites where EcomBalance Outsource School is just Ecombalance.com. Outsourceschool.com Yep, exactly. Fantastic. Thank you so much, Nathan, Nathan Hirsch from EcomBalance Outsource School. Thank you again so much for joining us today. It's it's fantastic interview hopefully not the last time we'll have you on again in the near future. Thank you so much.

Nathan Hirsch 41:16

Absolutely. Thank you.

Martin Zerrudo 41:20

Thanks for listening to the What Do You Do Next? podcast. Make sure to tune in again next time and make sure to click subscribe to get updates on future episodes. Take care

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