Jessica Mah is the founder and CEO of inDinero, a company that provides accounting, taxes, payroll and back office management for small businesses. Mah said, “We essentially take care of the entire accounting department for these small businesses. Companies are spending all this time and hundreds of thousands of dollars building out their accounting team with bookkeepers, tax specialists and a CFO, when they really should hire us and spend half that amount.”
Mah recently shared with us how she’s used business credit to help grow her business while preserving cash.
Starting Out
Why did you start your business?
I have started businesses since I was in elementary school. Accounting is super painful. I thought, “It shouldn’t be this hard for entrepreneurs. How can we solve this problem through software and delivering a better service.”
I actually come from a programming and computer science background. I looked at the accounting industry and thought about how backwards it was. Everyone in the accounting industry tends to be on the older side, they’re not very tech-savvy, they’re very slow moving and not really up-to-speed on technology and innovation, to put it lightly. I think that really left an opening for us to come in.
How did you get the funds to get going?
We bootstrapped it at first. We used money from savings and friends and family. We got some rent money because we applied to a few programs while we were in college that would give us money if we won a business plan competition. We won two of them – The biggest grant we got was about $35K, which was pretty awesome.
Have you heard of business credit?
I use business credit in my business pretty extensively. I’ve done loans in the hundreds of thousands and now in the millions of dollars. In some cases I’ve drawn, but right now I have a multi-million-dollar line of credit that I have not drawn on.
I don’t love the idea of doing personal loans for the business that are tied to me personally. Life is scary enough as it is, why make it even scarier? I’ve only done business loans. I’ve never had any credit card debt for my business and I’ve never done anything tied back to me personally.
Managing the Business
What’s most challenging about running your business?
I think the most challenging part is probably managing a growing workforce. We have over 100 employees at inDinero. Keeping everyone running in the same direction is probably the hardest part. And adding more headcount without breaking the bank account!
How do you finance your business to manage cash flow or growth?
I’m a big fan of equipment leasing. Basically, when you hire a new employee, you’re going to spend money, like $1,500 at least, on their laptop and their monitor, and another few hundred bucks on the Aeron chair they sit in. It really adds up, so we do a lot of equipment leasing, which means we pay for the equipment over a 36-month term. That makes it far easier for us to add headcount without adding capex.
Do you use trade credit from your vendors or suppliers?
We have asked for some credit. I have tried to push my payment terms back. Usually it’s 30 days, but sometimes I can get 90 days.
I never pay for things up front. I never do annual billing up front, even if someone says we can get the service for 10 percent cheaper or something if we pay for it up front. I never do that – I always pay for things monthly. All these simple things add up from a tax bill perspective.
What’s the biggest mistake you made early on?
Before we fully knew what we were selling and how we were going to make money, we tried to hire too many people too soon. The revenues weren’t coming in to pay for all those added costs. The mistake we made was not realizing that soon enough and not being stricter about cutting down our expenses when we should have.
What’s the smartest thing you did in your first year?
After I made that mistake, I went to the opposite end of the spectrum and became extremely cash frugal. I stared at my forecast and budget multiple times a week. We’re incredibly good at planning now, and that helps us make better business decisions like taking out a line of credit, doing equipment leasing, pushing back payments and doing anything I can to preserve cash.
What’s the most rewarding thing about owning a business?
Being able to work with people I actually care about. Being able to be in the company of others who are passionate about helping other small businesses.
Future Plans
What does the future look like for your business?
We’re growing a lot. We’ll probably have about 150+ employees within the next 12 months. We’re growing 2-3X a year. Our goal is to help every business with all of their accounting problems.
What advice do you have for someone starting a business?
Be patient. Don’t be so much in a hurry to throw things out. Give yourself some breathing room to make mistakes, because you’re going to make lots of mistakes.
This article was originally written on April 6, 2015 and updated on February 2, 2021.
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