The back office dilemma
There may be some good posts on this, but I haven't seen anything in my searches so thought I would ask. My talent and experience lies in building product, sales go-to-market and marketing, what I lack is the knowledge of actually running the business back-office (Accounting, Legal, Taxes, Business Entity, Etc.) The product I'm building is a B2B SaaS offering, that could theoretically be consumed by anyone in the world.
I'm at a point right now where I have a near working MVP, have some of my initial messaging and GTM pulled together, but I'm stuck on how to launch without having a complete back-end mess. I don't have the time or expertise to knowingly do this right, and it's become a real blocker for me.
Here are just a few things that are stuck in my head, and there are probably a ton of other questions that I should be asking that I don't even know yet. I'm wondering how other single founders are dealing with these issues themselves.
-
How are you handling day-to-day tasks for accounting such as order processing, handling payment disputes, etc? How do you handle revenue recognition if someone purchases a multi-year subscription? How are you 'managing the books' as a single-founder, when there are just an unlimited amount of things to do?
-
How are you handling taxes if someone purchases from any US state, or for any country anywhere in the world? How do you even stop someone from procuring your service from an embargoed country? How does a company need to be setup to allow people to purchase globally?
-
How does structuring your company now (say starting as an LLC) impact your ability to hire, bring on business partners, seek investment in the future? The formation structure seems like a pivotal moment for any company that could have significant downstream effects.
-
How are you handling things such as Terms-of-Service, Contracts, and other legal matters that are often involved with a company procuring a software service?
Is there any easy button here? Is there some SaaS company that caters to SaaS companies to remove these obstacles so that you can stay focused on what you are truly great at? Is there a course or guide to properly setting up your SaaS back office that covers these sorts of things?
I can only speak for myself as I like actually owning things I do. It usually takes just a little bit more time.
Stripe or Paddle have automated invoicing so I guess you could just send those through to your accountant, or accounting software inbox and handle them yourself (on the weekends) or by someone else.
Again, stripe or paddle (and probably others) really streamline the process. You don't have to care about it.
I mean, it depends on your country, right? It's best to consult with some accountant and/or lawyer. They can give you better insights. Like I wanted to open one kind of a company in Poland - sp. z o.o. - which is basically LLC. But it turned out that there's much better option for a startup - PSA (simple joint-stock company).
There are also companies that can open a company for you, e.g. you live outside of US and you want to open a LLC but I'm not sure how it really works.
I wouldn't say that there's an easy button but consulting your concerns with lawyer, accountant is probably the best long-run strategy :)
Also @Adam8 don't worry too much. All of the things I've mentioned, you can tweak, change, scale later. Get your customers excited and everything will be great
Just out of curiosity, are you willing to share what you're working on! Just wanted to see what the comments here were, but the suspense in the background is killing me.
I'm working on DIY Startup School right now so always very interested in everyone's starter-upper journeys
use "merchant of record" (search for this term in google) for selling products. What this essentially means are they will be taking the payments on their books and as far as your business is concerned you will just have single transaction monthly or weekly depending on what configuration you choose. This will take care of sales/vat issues for different states in us or different eu countries. It will also simplify your accounting as you will have a single customer with predictable number of transactions. You will have to pay higher fees with this approx 5-10% of your revenue. Some popular mor are paddle, fastspring etc.
Investment problem: If anyone decided to invest in your company (assuming you are going for vc route) they will help you in structuring your company so that they can make the investments and company can always be restructured later. This is not the issue you should be worried about right now.
What you should worry about: Getting revenue and making profits. Do not wait for launching it might take longer than you expect to get revenue and you might have to launch multiple times.
Thanks! This Merchant of Record thing is really interesting, may be a good way to pay for these problems, rather than solve them on my own to start.
Paddle does look interesting. I had done some early ChargeBee Integratoin, I wonder if there are any payment gateways that support MOR with Chargebee..
Yes, it can be overwhelming, but I think everybody's solving this bit by bit.
For example, you've mentioned a multi-year subscription, do you believe that this will occur in the first weeks or even months after your launch?
Hiring isn't likely to be a question you'd need to solve in the coming weeks.
I'd advise solving questions as you go, as it's really easy to get overwhelmed with all the things in advance, whereas it's too early to think about them.
A lot of things you've mentioned are likely to be solved by Stripe or analogs, and you could always send those questions to them, they may help sort things out :)