If you are pre-revenue in consumer goods…please make sure you have done your diligence on the margins and margin expandability of your business model…before you order ANY product. Or invest in a pilot facility… While you’re at it, you should project three years of operating expenses and cash flow too. No more easy money = no more easy launching the silly 2010s were an aberration. #startups #entrepreneurship #business
One area that is frequently overlooked and can result in a major cash & profitability issue is launching into WFM & Sprouts out of the gate with the slotting costs, distributor fees, and necessary promotions. Brands can go 4 to 5 orders with no cash coming in - just deductions exceeding the value of the invoice. Launching a brand into the retail channel requires deep expertise on trade spending -regardless of where you are starting. It's not the 'fun & sexy' part but it's critical!
Great points and I would add to this: Start with a product with low MOQ. Start with something that works well in DTC. I'm a big believer in using DTC to start and then retail to scale.
Wise words! Projecting margins and cash flow is crucial before scaling. Any tips on finding the right manufacturing partners to maximize margins? 🤔
Amen. Amen. And, amen!!!
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2w👍...Do this even if you are post revenue!