#awinewith Judith Hobdell
MEET Judith Hobdell, Founder of The eCommerce CFO
You can find them here:
Transcript
Danielle Lewis (00:05):
Judith, welcome to Spark tv.
Judith Hobdell (00:08):
Thank you for having me.
Danielle Lewis (00:09):
So good to have you here. Let's start out by telling everybody who you are and what you do.
Judith Hobdell (00:16):
So I'm Judith. I am the e-commerce CFO. I predominantly help my e-commerce clients get clarity on their numbers so they can come to me. They are usually generating a good amount of profit, but then they don't have the cash in the bank account to reflect what's on the p and l. So I basically literally find the holes in the leaky bucket initially. So I'm a little bit vegetative on the numbers.
Danielle Lewis (00:48):
I love that. I feel like cashflow is so obviously the e-commerce problem because large inventory purchases and it's a really interesting delicate balance in the e-commerce business, but I feel like every business struggles with cashflow. Yeah. You're looking at that p and l and going, I really should have money. What's going on?
Judith Hobdell (01:11):
Yeah, yeah. It's really just about keeping it simple. It's simple, and just literally having, keeping things in a lane, a large part of what I do is apply the profit first method to build up the foundations first within the bank accounts. So they have those, I see them as the guardrails when you go 10 pound bowling and there's the guardrails in the side and you're rolling the ball. So literally that's what I am to my clients is those guardrails so that they know where they should be spending within certain bank accounts.
Danielle Lewis (01:43):
That is so good. So for anyone who doesn't know what the Profit First Method is, can you give us a quick overview of that? Actually, such a great thing to bring up. I think for anybody listening who has a business.
Judith Hobdell (01:55):
So Profit First is a book and it's a cashflow. People say method, but I relate it more to behavior. So you're changing behavior to get a better cashflow strategy. So to sum it up in layman's terms, your money goes into one bank account, the income account, and then from there you do allocations into different accounts for the e-commerce side of you. In Australia, your GST register, I do the first one with G-S-T-G-S-T, then your profit, and then you do your tax account as well as your payroll account, ad spend and infantry account. So you break it down. Initially, you'll start with less accounts, and then as you go through time, you'll probably add on more accounts. The book does suggest that you do allocations twice a month, but for my e-commerce clients, I ask them to do allocations once a week on the same days. I ask them to do the payables in the same day, and it's getting into a habit of doing that. So basically keeping to that schedule as well, so you can actually see the timing of the frequency of your cash going out in your bank account. And then from there, any nuances or if the money that's going in is not matching what's needed to go out, then that's the area that you need to look into more.
Danielle Lewis (03:18):
I love that so much because exactly what you just said, if the money isn't there to go out, what's happened. But when you do that practice, the money is there and you're like, oh, I have a tax bill. I go to my tax account, and that money is just sitting in there waiting, waiting for me to pay my bill, and it's like life changing.
Judith Hobdell (03:36):
Yeah, that's the best feeling for me. I'm not a bookkeeper or an accountant, so I don't deal with tax, but one of the biggest fulfillments I have for my clients is that before it comes to bus time, they already have the money sitting in there, so they're paying it and they don't have to stress about paying that bill. So it's a good fulfillment for me anyway,
Danielle Lewis (04:00):
So good. So that's a really interesting point. So you said you're not a bookkeeper and you're not an accountant. So how did you get into this line of work,
Judith Hobdell (04:10):
The actuarial profession? So I was in that industry for a good 10 years in the uk, so I was advising trustees what they should be doing with their defined benefit pension schemes and advising them how they should vetting their money so that their risk of bear. And then I came over to Australia, and when I came over to Australia, I left the corporate world behind me and amongst all that, I did meet my husband and he introduced me into the entrepreneurial world. And he had, it wasn't an e-commerce brand or company at the time, it was more to your supplement stores, it was the wholesale model. We did then start an e-commerce brand together. So we grew very fast and we had a multiple seven figure brand very fast. And then that was 2014. So I did come from the finance industry and then moved over into the e-commerce industry. And then from 2014 to 2019, we then pivoted our infrastructure to create a digital marketing agency.
Danielle Lewis (05:21):
So
Judith Hobdell (05:22):
We were using our infrastructure as operational leverage. So we then had the clients coming in to a digital market, and then we use it also serving our e-commerce brands. So our e-commerce brands had literally zero on the operation line now. And then from the digital marketing side, I then observed from our clients that they were providing our team with unrealistic targets for their revenue goals. And then from there, it was literally a case of, okay, well why are you saying that you need this target? And I'll go into their books and I would say, okay, I would restructure these differently. A lot of the time you might have lots of nuances in advertising spend, but it's not actually advertising spend. It's a different fixed marketing costs, which is a different part of the p and l. And then also there gross profit could be they're not making enough in the gross profit, so they need to think about areas to basically put the plug into the hole in the bucket and stop losing the profit first before you come to the advertising side of things. Because if you can increase revenue, you're still having the same problems. So I was matching the books and then providing that link between the books to the digital marketing team.
Danielle Lewis (06:43):
Oh my God, I love that. It's such a good point you just made, if you don't have the infrastructure and you've got a leaky bucket, making more money doesn't solve that problem.
Judith Hobdell (06:55):
No, no. You still have the same problem. You can still have the same, A lot of the time clients can have the same amount of revenue, but actually increase their profit just by doing different strategies or negotiations or looking at, because I also know, understand the digital marketing side of things, the advertising side of things, I could also look to see whether they're losing money and acquiring a customer or is it the, it's not. A lot of the times it's revenue that's just propping up the company, whereas you want to try and make sure that you're not remarketing to the same client, the customers again.
Danielle Lewis (07:32):
Yeah, absolutely. That is so interesting. I just feel like I love what you just said. You can create more profit in your business just by tweaking a few strategies by actually looking at the things that you're doing actually diving into the p and l. It's so true. I think that oftentimes as business owners, we just go, if we just make more money, it'll solve everything. If we just make more money, just get more customers, just get more customers. And it is that oftentimes on this podcast actually, we talk about stopping, taking a breath and actually reviewing what is going on in the business. Are there some common places that people are making mistakes in their finances that you often see, like recurring themes come up when you dive into people's numbers?
Judith Hobdell (08:22):
A lot. A lot. So the first one, if we are thinking about the e and ls, like a funnel, some top downs of revenue comes in, and then there's costs that keeps being associated off of that. The first one is the money that's in your bank account as a payout and before the payout, that is other costs associated with it. So you've got your sales, but then a lot of the time the discounts are missing, the returns are missing, the shipping income's missing. And then also what's missing is fees associated with it. So a lot of the Shopify, Afterpay, PayPal, they all have fees associated. So those line items within a p and l are often missed, and that gives me a lot bigger of a picture. If I can see that data, I get a better story of what's actually happening within the business. And then from there I can start using, well, these are the areas to look at. And then we can also use this data to forecast not having. So if you're looking at the next section would be your cost of sales.
(09:29):
A lot of the time they just need to negotiate either better prices or going back to the fulfillment or looking at increasing the price that they're selling at. But that's all p and l side of things. And then also the next part under that would be, I put advertising spend underg gross profit, so you've got gross profit, then you've got the advertising spend and make sure that there's no fixed costs in there, there's no marketing expenses, it's just ad spend. And then under that I have a contribution profit line item. And I think that's one thing that's always missing in the p and l as well. So that's the p and l side of it. So I can look at the profit side, but then on the balance sheet, people forget, most people forget the balance sheet, and a lot of the times the cash is sitting there in the balance sheet, there could be line items missing that's not explaining where the money actually is held or they're way too much stock that's building cash.
Danielle Lewis (10:30):
God, being an e-commerce business is such an interesting balance. I often hear e-commerce founders run into that problem where they're going, I feel like we're profitable, but we just never have the cash to rebuy inventory. If we can't rebuy inventory, then we don't have anything to sell. And then it's kind of this vicious cycle. That's a really tough one when it comes to e-commerce. But I mean even any other business who's wanting to invest in their growth of their business, finding that cash somewhere and making sure it's available when it's time to invest, whether it be inventory or in a project for the business, super critical.
Judith Hobdell (11:13):
And the one thing I like about having the profit workforce method is that having that inventory account as well, so that gives founders the ideals of how much they should be purchasing. I do see a lot of founders purchasing too big of a purchase order, especially on new products they haven't tested as well, and they just sit on the balance sheet and then it's just, I like having that bank account for infantry.
Danielle Lewis (11:43):
Do you think that they do that because there's a perceived discount to buying more stock, or do you think they're just not forecasting correctly?
Judith Hobdell (11:51):
Forecasting not forecasting correctly, and then a lot of the times, lead times are really slow. So it's more so that scarcity mindset that I need to buy now rather than having that strategic output or having that forecast. And then you can play with the numbers to say, okay, well this will get us through to this point and then we can purchase again.
Danielle Lewis (12:12):
Yeah, interesting. I mean, it's so fascinating because it always just makes me think this is why you need someone like you on the team, because there's just so many different nuances in so many different businesses. And as a business owner, we probably started our business because we were passionate about the industry or the niche or we have some kind of skillset. And often our skillset isn't finance, and it's so important to learn finance and be financially literate. However, there's such nuanced things that we can do to improve the health of our business. Having someone like you sit down with us is just so valuable.
Judith Hobdell (12:54):
And that's definitely one of the reasons why I serve my e-commerce clients now, is that we did have that one purchase order that tipped us over the edge. And I wish I did have the same guidance that I provide at the early stages because we had one that was our biggest mistake and was we made a purchase order of half a million USD at the time we were manufacturing wireless Bluetooth headphones. I would never do electronics again. Lesson learned. And at the same time, that's when I had my first baby. So it was 2019, she was months old, and this purchase order that we had, it was out with our customers and then fault started happening. And then so we were getting the feedback and they were like, oh, shit. So then the manufacturer at the time wouldn't replace the product. We hadn't built a strong enough relationship with our manufacturer and we put too much into that one purchase order that we had to pivot, and that's when we pivot into a digital marketing agency at the time. But yeah, that's one of the reasons why I serve clients at an earlier stage of their business because I wish I had that guidance at the beginning as well.
Danielle Lewis (14:16):
Oh my God, isn't that crazy? I love people that build a business of their experience, and sometimes the experience isn't always positive, but I love that if you can turn that this happened to me, let me make sure it doesn't happen to you. That's incredible.
Judith Hobdell (14:33):
You need that resilience as a business owner.
Danielle Lewis (14:36):
Oh my God. I think that's the number one skill you need as a business owner is okay, the world is falling apart. What can we do? How can we get through this?
Judith Hobdell (14:44):
Yeah, collect yourself and pick yourself up and go.
Danielle Lewis (14:47):
Yeah, exactly right. Oh, I love it so much. So that's a interesting story. Do you think that was your biggest challenge so far in business? Or what do you think has been some of the biggest challenges you've faced when growing businesses? You've grown multiple businesses?
Judith Hobdell (15:03):
Yeah, so we have four at the moment. Yeah, I think with financially, yes, that's the biggest challenge because we literally had to quickly pivot at that time and also from also
Danielle Lewis (15:23):
Working with your partner. That's the other question in my mind. Do you mention that? How do you navigate that situation?
Judith Hobdell (15:31):
We do it really well. We compliment each other very well. I think the trick with us is that just to know and stay in your
Danielle Lewis (15:38):
Lane,
Judith Hobdell (15:40):
So there's certain aspects that he can do and I do the other, or just stay in your lane and just let them get on with their part and you get on with your part. I think there has been previously a slight, I'm so independent and driven myself, and then connecting with my husband and running a business with my husband. He's the extrovert, so he's always the one in the face. I have had that over the so many years of stepping back a little bit and letting him be the face. So that's probably one of my bigger challenges now is actually to, hold on, wait a minute, step out the way and let me drive most of the, get more of the limelight. Step out. Step out,
Danielle Lewis (16:29):
Get out of the way. Man, I love it. I mean, it's interesting. I think that there are different seasons in our life where we want to be the face or not be the face and different for different reasons. Sometimes it's because perhaps where it's growing the family and that actually has to take priority or there is nope. Now this is what we're doing. We're focusing in on my side of the business. But I do love what you said about staying in your lane. That's exactly what I found when I worked with a partner, and it was just that trust factor. You just had to trust that they were going to do as best as they could for their side of the business. Nothing good ever came from, I think you should do it this way.
Judith Hobdell (17:18):
Yeah, you can put some ideas in sometimes. Well, a lot of the times I find that I have the ideas and I give the ideas, and it's not until someone else is given the idea that he goes ahead with it, so I have to pause someone else to say it.
Danielle Lewis (17:34):
Yeah, totally. Just slip a note to somebody else. It's a great idea. Yeah. So you just have to have that awareness that that's kind of what it's like working with a partner sometimes. And as long as you have that awareness and you've got strategies to work together and work around each other's personalities, then it can work.
Judith Hobdell (17:57):
Yeah, we do compromise other very well, and we don't, I don't think we've ever had that traditional relationship in a sense. Everything we've done has been back to front where we were in the digital nomad scene before 2020, so we kind of had the untraditional jobs, if that makes sense.
Danielle Lewis (18:21):
And
Judith Hobdell (18:21):
Our lifestyles went back to front, so we had our kids before we were married, and also he's more into cooking and shopping than I am. So he does that. He plays that role in our relationship, and I'll build stuff. So I am the DIY person around the house.
Danielle Lewis (18:42):
Oh my God, that's so cool. And look, that's it isn't, it's knowing that about yourself, knowing that about your partner and playing to those strengths.
Judith Hobdell (18:53):
Yeah. Yeah.
Danielle Lewis (18:55):
I love it. You mentioned you had four businesses. What's the actual heck? How do you manage four businesses?
Judith Hobdell (19:05):
Structure, SOPs, staying in lane delegating? Yeah, so two e-commerce businesses, our digital marketing agency, and my main focus is which my CFO business.
Danielle Lewis (19:21):
Wow. That is incredible. Interesting. Do you have a team for any of those or people that you manage for any of those?
Judith Hobdell (19:30):
Yeah. Yeah. So it's basically our digital marketing agency is our hub. So we use that for operational leverage for everything else. So all the expenses go through our digital marketing agency and then every other business is treated as a client, like a customer,
Danielle Lewis (19:44):
Kind of like a client. Yeah. That's really interesting. That's so smart. What are your e-commerce businesses in now? Are they still supplements
Judith Hobdell (19:52):
Or supplements? So with our clients, we niche down into the supplement industry, and so the two of them are supplements as well, but they're kind of sister companies. They are predominantly aimed at males with the dad bod natural supplements for testone boosters and
Danielle Lewis (20:18):
How good, no, that's so interesting and it's kind of fascinating to me as well when you say that they all work together. So the e-commerce businesses have now kind of become, or they're treated as clients of the digital marketing agency. And then obviously your E-commerce CFO business is complimentary to all of those clients as well. And I think that's an interesting way to make multiple companies work because you are thinking about it like an ecosystem. It's not like you've got an agency on one side and something completely different, a physical retail. So it's something completely different where you'd have to fully context switch. They all are actually super complimentary,
Judith Hobdell (21:01):
Especially with the team. I find that as soon as we niche down within our digital American agency, then all of our contractors knew exactly what they were doing. You're not adding in a completely new brand. And the lingo was different and the avatar was completely different. They're very similar but different, and they knew exactly what they were doing, so it's not relearning over and over again. So V became very optimized as well.
Danielle Lewis (21:27):
Yeah, no, I love it so much. It's actually niching down is really interesting and there's so many different schools of thought as to whether you should niche down or be multi-passionate, all of these different pieces of advice floating around the internet. But I think that until you've nailed one thing, perhaps having multiple things is not a great idea. So I'm actually a huge fan of niching and focusing in until you are amazing at it and or have built it to the level of success that you desire.
Judith Hobdell (22:03):
And it's exactly the same with my CFO businesses. I only take e-commerce businesses on, I can do profit first for pretty much any business because this is the same method, but I don't take that on. And I also being very specific in who my clients are, so for my factual CFO services, I'm very specific in that they have to be on zero in Shopify and they have to have 3 million above revenue for me to work with them unless they can go into my done with you service. It's slightly different, but your messaging becomes so much easier as well.
Danielle Lewis (22:43):
Yes. Oh, a hundred percent. And I actually struggled with that. So from a spark point of view, we just talked to women in business. That's easy, amazing, great. But I've, in my previous business, scrunch, which is an influencer marketing agency and platform, we were always struggling to speak to the brand side, the agency side, and the influencer side. And it was sort of like, do we have multiple social channels? Do we have multiple learning paid? It was always mixed messaging. So I do love that idea if you're just super focused on who your ideal customer is and scale because there's enough, right? There are enough of our customers. I promise you whoever's listening, whoever your customer is, there is enough for you to be a multi, multi successful business owner.
Judith Hobdell (23:32):
100%. And I believe in the abundance mindset as well. I think when you start getting to the scarcity mindset, you're just basically providing yourself with limiting beliefs as well. If you have that abundance mindset, they just doors open for you.
Danielle Lewis (23:47):
Oh, I love that so much. It's actually interesting. I just wrote on my to-do list before we started affirmations because I've been finding my little brains been being a bit naughty this week saying some naughty things. I'm like, got to get back into that zone. And the quickest and easiest way for me is just feeding positive thoughts, feeding good affirmations into my brain, and then I find myself just come out the other side as this positive, happy Danny. But it is so true. There is enough, there is abundance. We just have to adopt that mindset and keep going.
Judith Hobdell (24:23):
Yeah. Do
Danielle Lewis (24:24):
You have any particular practices that help you stay in that abundance mindset?
Judith Hobdell (24:33):
Yeah, I think that whenever I get stuck, I think about the otoplasty practices that I can place in my day-to-day. And I've been practicing this with my daughters. I've got a six and a 2-year-old, and I've been practicing with both. So whenever I'm stuck, I get a journal or a book and it's nothing heavy. It's literally in the morning, three things that I'm grateful for.
(25:03):
And then in the evening, it is one thing that you did well that day. So even if you have a bad day, you still find that one thing that you did well that day and one thing that you're looking forward to tomorrow. So it realizes your brain to think more positively and it keeps you in the moment as well, rather than getting overwhelmed or over anxious about everything else and just keeping you more focused on the moment. I think that relates back to keeping myself in the abundance mindset that it comes out of fear and the scarcity side of things.
Danielle Lewis (25:44):
Yeah, I love that. That's really interesting that finding that one thing that you did well today, oftentimes, I literally had that thought this morning. I was texting my mom and she was like, oh, how's your day? Blah, blah, blah. And I was like, oh yeah, did this, this, this. And she's like, oh, wow, you sound like you've been really productive. And I was like, oh, I have had a great day. I have achieved all of these
Judith Hobdell (26:06):
Things.
Danielle Lewis (26:07):
But it's so easy to let the day pass and just think, oh, another day now it's time to cook dinner. It's all over. But actually stopping and appreciating what you did, your efforts, whatever you were grateful for, it's super powerful.
Judith Hobdell (26:24):
So powerful, and you don't realize how much you've achieved. I was on a call last week, a week after a mastermind. It was just accountability call to see what you had done in that one week. And I thought I'd done nothing. And then I was telling everybody what I'd just done that week, and they're like, oh my gosh, you've done a lot. And you don't realize the days go by faster and faster. And it's not until you actually stop and reflect on what you've done that week that you realize, okay, well, I have made the small incremental compound movements that's going to get me further
Danielle Lewis (27:01):
Along. I love that. Oh my God, if anyone takes anything away from today, I want it to be actually stopping. So stop and look at your financials and find the leaky places. Stop and reflect on the things that you've done and the achievements you've made and what you're grateful for. I feel like it is really that sometimes you just have to stop because as business owners, we just sometimes are a bit of a slave to our to-do list, and we keep going, going, going, going, going, and we don't see those opportunities or things to be grateful for.
Judith Hobdell (27:34):
And even that to-do list, as long as you have that to-do list there, sometimes there's, you've just got to put a shit aside and actually do the one thing that's actually going to make momentum. I have a massive to-do list because there's just my OCD and tidying up and everything has to be clean and all the rest of it, and I have had to let go now that I'm a mom, let go of my massive to-do list and just, well, what's going to make the most increment today? Rather than doing 10 things, I'm just doing the one thing.
Danielle Lewis (28:05):
I love that. Oh my God. And it is that busy work on our to-do list oftentimes. I love that idea of what is the one thing that is going to make the impact, help me achieve whatever milestone, whatever goal, whatever my measure of success is, what's that one thing I can do? And if I've done that, then today is a success.
Judith Hobdell (28:26):
Yes.
Danielle Lewis (28:28):
So good. Now, I always love to wrap up these podcasts with one last piece of advice. So reflecting on your time in business, what would be one piece of advice that you would give to another woman on her journey?
Judith Hobdell (28:45):
Get to know your numbers as soon as possible. Yeah, so get to know your numbers to either provide you trigger or a budget of at what point do you need to reassess as well. I'll see a lot of businesses that they're just throwing a lot of money into generating revenue, and they're not realizing that they're losing profit, and that if you are scaling fast, then you can actually be a lot more risk to losing it all faster. So get to know your numbers as soon as you can and get a coach to help you with that.
Danielle Lewis (29:26):
Absolutely incredible. Judith, thank you so much for your time today. So many amazing nuggets of wisdom that I know the Spark community can latch onto and use to grow their business. So grateful for your time.
Judith Hobdell (29:40):
Thank you very much for having me on.
✨ Thank you to IP Australia for supporting the SPARK podcast and women in business ✨
