If I Started Citizen Supply Again

Platforms feed into QuickBooks terribly. Here is what goes missing:

That leaves you with a false read on your own performance. Financials should be organized to help you understand the business, and channel level detail is the fastest way there.

What it looks like: every dollar of revenue is tagged to the channel that produced it. Then every cost that exists because of that channel gets tagged the same way. Cost of goods obviously, but also merchant fees, shipping you paid, discounts you gave, returns you ate, freight in.

Notice the cost lines are different per channel. Amazon has a referral fee and FBA storage. Wholesale has a Faire commission and freight out to the stockist. That is the point. Each channel costs a different thing to serve, and blending them hides it.

This one is huge. Gross margin is a key metric, but when you are dumping money into ads it is incomplete. You have to know your marketing profitability.

That number tells you how much money you actually have to cover everything else. If you are not tracking it, I would bet your ad spend is running wild. Agencies love spending your money and charging you for it.

Ask your bookkeeper or finance team to organize the P&L this way. If they say they do not know how, fire them.

A P&L is hard to read in a way that translates for a creative entrepreneur brain. This is a Sankey diagram. All the work in 01 and 02 is what makes it worth looking at.

This can be as detailed as you want or need it to be.

If you struggle to understand the bland financial reports, you are not alone, and this diagram can really help you.

Every consumer brand is a stack of a few repeating units. Your business movement is just those units multiplied.

The initial exercise is to write down the current state of these units. This brings clarity. Even if it is ugly, you will see clearly the area of the business that needs your attention.

If you cannot find certain items, that will lead to some healthy conversations with your team.

Once you know the units and their numbers, a forecast stops being a big number you threw on the wall. It becomes math. How many of each unit, at what health, over what period.

Naming the units is the first half. The other half is deciding, in advance and in writing, what a healthy one looks like.

An order is healthy at this AOV and this contribution. A customer is healthy at this acquisition cost and this repeat rate. If how you live your days is how you live your life, then how healthy your units are is how healthy your company is.

Do not do this alone if you have a marketing agency, a finance team, or anyone else running the areas you are defining. The definitions are yours. Those people still need to be in the room if you want alignment.

Margin discipline is a term every entrepreneur should know. Financials are not set and forget. They ebb and flow, and you need to know when they ebb too far. This is ownership, not micromanagement.

If you know fulfillment should be 8% of net revenue and it is running at 12%, you have a specific problem in a specific place.

Export your last twelve months, separated by month, with this view. Watch how those percentages change. That tells the story of your finances.

Two things on the agenda. First, cash trends for the last four weeks plus the forecast for the next thirteen. Second, review your unit economics, because those units are the lead measure on your cash situation.

Note what is in that outflow list. Inventory and payroll are the obvious ones. The card paydown, the line of credit and the loan are the ones founders forget, and together they are $151,200 of this quarter. Cash that leaves the bank but never shows up as an expense on your P&L.

Your cash is directly correlated to everything above. If cash is off, look at margins first and volume second.

Your bookkeeper or accountant does 90% of this. The mapping, the payment schedules, the tie out to the bank. You own the sales forecast and you co-sign that the rest is right.

Set your minimum before you need it. Marlow's $150,000 is roughly six weeks of fixed costs. Pick yours, write it down, and treat crossing it as an event rather than a feeling you get on a Sunday night.

Any time you force something through in a business, another area takes the hit. Force a salary the company cannot afford and you are probably robbing the tax reserve or next season's inventory.

Your salary is an expense, not a reward. The only question is what the right sized one is.

Three tests. Use the last six months of actual cash flow, not the forecast. Check it against your leanest month, because a salary that only works in November will crush you in Q1. The goal is to cover your life with margin, or the company's money starts leaking into your personal one.

Once it is set, leave it. Do not go backwards, and fight like hell to protect it.

In addition to your monthly salary, pay yourself a consistent percentage of profit. That is what gets you paid on performance. Monthly if your season is steady, quarterly if it swings hard.

The goal is to fill the gaps your salary did not cover, and as the company grows, to build wealth and savings.

30 / 40 / 30 is Marlow's split, not the law. A brand carrying debt or buying deep inventory should push retained earnings higher. Ask your CPA what your tax percentage should be, because it depends on your entity and your state.

Three rules make it real. Set the percentages once and review them yearly. Transfer monthly, because the split only exists if the money physically moves. Accept that a loss month distributes nothing.

Across the full twelve months Marlow's owner took $97,906 in distributions this way, on top of the $96,000 salary.

This is the hardest pill to swallow if your company is in a bad spot. It also forces the decisions and behaviors that make it healthy. Everyone I have seen implement this hates it and ends up grateful for the process.

When the financials are not tended to properly, you are the one who suffers. The leaks, the employee not doing their job, the surprise your bookkeeper missed, the MCA interest. All of it cuts down what you can pay yourself.