Use our digital checklist with monthly board meeting agenda templates to help you hit the ground running.

Congratulations! You’ve just bought an ecommerce business. Now what?

Buying any business inevitably introduces chaos. Buying one in the fast-paced, ever-changing world of ecommerce adds an extra layer of volatility. 

Our goal at Tadpull in working with private equity investors and portfolio companies is to get everyone moving in the same direction using:

• Clean data 
• Machine-learning driven forecasts 
• Clear measurement of progress toward goals
• Predictable workflows 

With these goals in mind, we created a structured, 100-day roadmap to help investors and operators meet key strategic and operational milestones. 

Following the plan will help you accelerate the transition period, mitigate risks, and facilitate quicker realization of synergies and – ultimately – value creation. 

Phase 1: Initiation (Day 1-30)

1. Due Diligence and Knowledge Transfer
Review the key information on the acquired ecommerce business. This includes:

• Financial statements 
• Customer lifetime value cohort data
• Supplier contracts and inventory positions
• Digital marketing performance, focusing on acquisition costs and customer retention 
• Any existing strategic plans from management

It’s also important to ensure all necessary legal and financial requirements for the acquisition are complete within the first 30 days.

Tadpull Tip: Tadpull is often pulled in for a data, ecommerce performance, and financial review during the diligence phase. As an output, we deliver an in-depth roadmap that highlights growth opportunities from the list above along with a detailed evaluation of the tech stack, a review of the organizational chart and the in-house talent, and tactical digial and ecommerce strategies that can be implemented to achieve goals.  

2. Initial Stakeholder Meeting 

Organize a 90-minute meeting with key stakeholders, including the existing management team and ecommerce operators. Use the meeting to ensure all parties understand the acquisition and listen to their thoughts, concerns, and aspirations for the business. 

Before the meeting, ask your ecommerce team to prepare for a discussion about the following questions:

• What opportunities do they see for the business? 
• Are there any technology or data collection needs?
• What competitor threats do they see?
• What key things should the new team all understand from the previous years?

Create plenty of space during the meeting to hear their thoughts. 

Pro Tip: It’s important to set the right tone with this first meeting. These employees will have concerns about their job security. Lead this discussion with empathy in order to build trust and create an environment where people are comfortable sharing crucial information with you.

3. Establish an Integration Team
Form a team that will be responsible for the smooth integration of the business into the PE firm's portfolio. When selecting the members of the team, incorporate executives, managers, and day-to-day ecommerce operators from both the PE firm and the ecommerce business. 

Bear in mind that the selection process will carry some internal politics. Ideally, the leaders and experts on the team surfaced organically from the due diligence phase, but don’t be afraid to go deeper at this point to truly understand where the value creation opportunities lie.

Pro Tip: We strongly recommend assembling a cross-functional team that includes, at a minimum, people from:

• Marketing 
• Operations
• Finance  
• Technology

Have each team member rank and vote on the top five key issues to tackle over the next 90 days with the goal of presenting them to the board.

Phase 1 Milestone: First Board-Meeting Agenda
Goal: This first board meeting formally sets expectations and outlines what the ecommerce business can expect from the PE operating partners. It’s also the time to establish goals and the metrics that will be used to measure success in reaching these goals.

Recommended Agenda Items

• Quick review of due diligence findings 

Highlight growth opportunities and align teams around this focus. 

• Introduce integration team members

 Share value-creation initiatives the team will spearhead over the next two to three months.

• Present the top five key issues for board approval.

Center the discussion around the growth opportunities that the integration team will tackle. 

• Define who is responsible for meeting goals and share information on how data will be stored and how progress will be tracked toward goals. 

 Demo an online portal.

Tadpull Tip: Not sure of a good online portal solution? Tadpull Ecommerce Data Pond unites customers, campaign, and catalog data with automations and performance reporting.  

Phase 2: Alignment (Day 31-60)

4. Strategic Planning
Begin strategic planning by focusing on the top five opportunities for growth, approved during the board meeting. 

Set achievable milestones for the next twelve months with an eye on two- and three-year goals. The valuation gives you a sense of what is possible and the strategic planning makes it clear how you will achieve growth. Get detailed with your action plan by outlining choreographed steps. 
Other tasks to tackle with strategic planning follow:

• Review the company’s vision and mission
• Set the strategic direction
• Commit to yearly calendar milestones

Also, ensure your team reviews predictive analytics for metrics such as traffic, conversion rate, and average order value (AOV) to establish reasonable expectations for driving revenue and determining where to invest. Much of this can be estimated with time-series datasets from Google Analytics or transaction data from an ecommerce platform (i.e. BigCommerce, Shopify, etc) and the power of machine learning.

Tadpull Tip:  “Shocking Simple Math of Ecommerce” details three key levers that drive online revenue. For example, a 0.1% improvement in conversion rate can drive six- and seven-figure returns for revenue. Tadpull’s shockingly simple math puts ROI figures behind strategic decision making. 

5. Operational Efficiency Review
Perform an in-depth analysis of current operations with an eye toward reducing costs and making efficiency improvements. Examine these areas:

• Procurement
• Fulfillment 
• Customer service
• Digital marketing support 
• Technology infrastructure 
• Data infrastructure 

At this point, you want to be looking for redundancies and constraints that were either the result of too much or too little capital.

Pro Tip: Look for paid media campaign waste that might be driving up Customer Acquisition Costs. Often teams can get bamboozled by going after audiences that are already familiar with the brand, and they anchor on a Return on Ad Spend (ROAS) metric. Make sure your campaigns aren't paying for customers you already have. Paid media campaigns should use your investment to acquire new customers.

6. Finance and Reporting Systems Review
This may seem fairly obvious but analyzing the existing finance and reporting systems for quality and frequency of data can reveal some startling deficiencies. For example, does the ecommerce business have revenue, costs, and campaign performance data coming in on a weekly cadence?

The goal is to use systems that can provide robust, real-time reporting that enables data-driven decision-makings. All too often operations teams don't have visibility of inventory turns and as a result stock-outs of best sellers brings site conversions to a grinding halt and so does free cash flow.

Pro Tip: Your technology and data infrastructure is paramount to creating value. Many acquired assets see huge gains simply by adjusting their tech stack and bringing on expertise to appropriately manage data.

Phase 2 Milestone: Second Board Meeting Agenda

The goal of the second board meeting is to build a recurring agenda that the business can report against. Align all stakeholders on the goals for the next 1 to 3 years while collecting feedback on where the issues lie (much of which should map fairly well back to due diligence). 

Recommended Agenda Items

• Present and approve the strategic plan

Those responsible for milestone performance should present their 12, 24 and 36 month goals and the metrics they will use to monitor progress.

• Present efficiency improvement opportunities across customers, campaigns, and product catalog, along with technology systems improvements

Operations teams can present their findings. 

• Present consequences and opportunities of the finance and data reporting systems 

Aim to get approvals for necessary upgrades. For portcos with more hands-on operators, adoption of tools such as Miro, Slack, and Asana should be approved so that internal teams can easily complete day-to-day tasks and report back on those efforts.

Phase 3: Execution (Day 61-100)

7. Strategy Execution
After 60 days, all data and financial systems are wired in and a source- of-truth has been defined. With the appropriate tools in place, you have the  confidence to start executing tasks that will help you achieve your 12-month strategic-plan milestones.  Also, two months post-acquisition you have identified each individual responsible for tracking progress against established goals.

If additional technology, staffing, or outsourced human resources are needed, these should all be fleshed out.

Pro Tip: Teams require alignment with clear goals and accountability, starting from middle management to interns. It is crucial to incorporate the input of team members in the execution of strategic plans, allowing them to contribute to monthly goals and explore possibilities. By combining their insights with financial predictions, a balanced approach can be achieved. This process fosters trust through a transparent measurement system and engages individuals in shaping the future of the business.

8. Optimize Operations:
In this sprint, we implement changes from the operations review, aiming to streamline processes, reduce costs, and improve customer service. 

For example, we might spin up a live chat feature on certain parts of the website to help answer key questions for customers. Or, if using Ecommerce Data Pond software, you can put systems in place to alert the customer support team of real-time low Net Promoter Scores with the aim of streamlining any issues while also capturing high-value customers.

Pro Tip: A visual dashboard that shows progress to goal is extremely powerful for aligning your team. Reducing waste and inefficiencies can seem a bit theoretical until the team can actually see the time to ship orders falling by days and then even hours. If you can tie these goal metrics to a prize or cash bonus, even better.

9. Financial Systems Upgrade (Optional):
Here’s where the “source of truth” for financials starts to emerge as a key tech upgrade needed as the acquirer wants to be able to consistently close out the books. For many portcos, this tends to follow a standard tech stack. For example, some may run Magento or BigCommerce as their ecommerce cart but the ERP will likely be NetSuite for a mid-market PE owned company. 

ERP systems are a gold mine for ecommerce as they can be fine tuned with AI to drive all sorts of key decisions around digital marketing campaigns. For large SKU count businesses, this is likely already in place to some degree. However, mapping what high lifetime value customers buy and the acquisition channel is one of the fastest ways we’ve seen to earn more revenue.

These data feeds can be fine-tuned to back into paid campaigns to hit goals for customer acquisition costs (CAC) or Return on Ad Spend (ROAS) KPIs. 

Pro Tip: Push hard into the financial data as massive opportunities exist here and are often neglected due to marketing and operations/finance not coordinating consistently. Our data science team frequently uncovers SKUs that should never be in an ad feed or SKUs where there is significant price elasticity and a simple bump in price shoots right to the bottom line. Sadly, most of this data lies locked up in Excel files or the cloud of a boring ERP interface but having ecommerce partners and employees who can support putting this inventory to work for profitable returns is key.

10. Performance Review:
After three months, the rhythms for teams should be coming into clear focus. Data and rituals tend to build trust as teams in-house and out execute against common goals. Knowing a performance review is on the horizon is extremely helpful for uniting groups if done in the right way.

In our experience, the first 60 days are some of the most challenging for collaboration among teams which are increasingly remote these days. Everyone feels the pressure of a new board and adapting to new expectations and cultural norms. At the 90 day mark though, teams are figuring it out and some individuals may opt out (and that’s okay).

However, the performance review should be celebrated as a unifying goal. Not everything will be green check marks. However, as the systems implemented in the first two phases come online, better data tends to build better expectations and should be driving better execution as a result.

Pro Tip:  Ecommerce forecasts are a tricky thing with all the volatility of ad platforms and shifting inventories. However, we are big fans of using time-series forecasting with machine learning to set rough expectations on what is possible for top-line revenue. We start here on our due diligence and growth plan offerings so that both sides of the table can lean a bit on the science for what’s possible. Often at the 90 day mark, we’re fairly close to what the algorithm was predicting and that helps remind everyone that compounding takes awhile to get moving.

Phase 3 Milestone: Third Board Meeting Agenda 

Goal: All teams know the agenda, the data, and are tracking progress toward the 12-month goal. The team also has an eye on larger initiatives such as an ERP upgrade or tech stack rewrite. If appropriate, have key internal leaders present their dashboards and findings but only if the underlying reporting and data sources are vetted and trusted by all.

Recommended Agenda Items

• Review  execution progress against forecast (ideally, using AI for time series metrics  like revenue, traffic, campaigns, etc.

 Deliver contextual commentary on pros/cons of the past 90 days.

Review needed operational changes and the reasoning along with possible financial systems upgrades with timelines. This should be present in simple terms of “this does that against our goal for this department”.  

• Share simple dashboards that map out each key part of the ecommerce engine and explain any headwinds/tailwinds. 

We are partial to working backwards from revenue with traffic (campaigns), conversion rate, and average order value. 

• Start to unpack customer analytics and begin to describe the most valuable customers, from what campaigns they came, and the product catalog items they buy. 

Start to watch cohorts by quarter/year to identify any future problems in hitting forecast goals.

In Closing - Nail These 3 Things

At the conclusion of the 100-day plan, some private equity firms will have successfully integrated the ecommerce business into its portfolio. They have implemented a strategic roadmap, enhanced operational processes, and upgraded financial systems. 

Manywill also fail. Likely because they couldn’t overcome cultural differences or they had little to no data upon which to act. 

If you can do nothing else, success will come from these three action items:

1. Unite all your data in one place to ground everyone in reality. This will be a journey as no firm has perfect tech and upstream data sources. The investment pays off tremendously at exit.
2. Simplify the goals and the outputs of the strategy. Push the team to rollup daily progress to weekly, monthly, quarterly and  yearly results. Small changes compounding at just 1% a week can gain 52% in a year.
3. Amplify the results with rhythms and AI. Better data and better execution will help you hone in on your highest-value customers. Ultimately you can acquire more of them and retain existing high-value customers. Building on this, campaigns can be segmented with this data and ultimately rolled up to the product catalog.

The acquisition and integration of an ecommerce business can be a complex process. There are a few common pitfalls where most 100-day plans can go wrong. Read about what to avoid here.

Sample Scorecard for Measuring 100-Day Plan

A balanced scorecard is a strategic performance measurement tool that can help quantify and track progress toward the key objectives of a 100-day plan. Here is a balanced scorecard framework with a specific focus on an ecommerce acquisition:

The measures, targets, and initiatives in this table should be tailored to suit the specifics of the ecommerce business and the objectives of the PE firm. Monitoring this scorecard regularly (for example, on a monthly basis) would give the firm clear, quantifiable insights into how well the 100-day plan is performing and where improvements need to be made.

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