costs of goods sold, aka “Cogs”…

Many food business owners are Confused as to what their costS of goods sold (COGS) are…

• Should my rent be included?

• What about labor?

• Merchant Fees are a COG?!

some know exactly what their food business COGS are, but don’t know why understanding + tracking your COGS is so important…

• My COGS go up and down depending on what I make and sell each month… why do I need to track them?

• WHAT exactly should I be tracking?!

Whichever boat you’re in, You are not alone!

In this video I'm answering these 3 common questions about food business COGS:

1. What are Costs of Goods Sold?

2. Why are COGS important to track, and how do i track them?

3. How can understanding my COGS help me build a profitable food business?

Dig in and comment below to tell me what nugget of info you found most helpful!

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program as well as the host of The Good Food CFO Podcast. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

#74 She Doesn't Wear a Cape or Fly, but She's a Real Superhero - Sarah Delevan, The Good Food CFO

Meaningful Marketplace Podcast · #74 She Doesn't Wear a Cape or Fly, but She's a Real Superhero - Sarah Delevan, The Good Food CFO

I was recently invited to join Sarah Marshall and Sarah Masoni as a guest on their amazing podcast, The Meaningful Marketplace and had a great time discussing MY JOURNEY TO BECOMING A GOOD FOOD CFO, MY APPROACH TO FINANCIALS + WORKING WITH MY CLIENTS, AND OF COURSE…all things food business.

If you’re a good food business owner and haven’t listened to their podcast, stop what you’re doing and listen right now!

A little bit about Sarah and Sarah:

Sarah Masoni of Oregon State University's Food Innovation CenteR:

Masoni's mission is to help food entrepreneurs take their product to market successfully, or give them the tough love news that their product isn't ready for prime time. Masoni has an amazing palate that has guided many companies through the maze of going from the kitchen to the mass production process that gets the product to the consumer's table. She's interested in real food, ethically procured and processed with a fabulous taste and she's very straightforward and candid with her clients. A speaker, sought after panel member and budding author, Masoni considers herself "CEO to a thousand food companies", because her candor and integrity has the ear of the C-suite when they need to hear the truth about their food products.

Sarah Marshall founder of Marshall's Haute Sauce:

Sarah’s passion for canning bloomed when she was a social worker in the Portland, Oregon area. The work was emotionally tough, and canning food at home became her therapy. As she canned more and more, she began teaching others. And she started creating sauces for the children she oversaw. Since many were on the "spectrum", she had to pay special attention to avoiding additives, so her penchant for pure, fresh food took hold. Her recipes reflected this philosophy and became the blueprint for her future products. Taking business classes while still a social worker, Marshall considered a food cart at one time, but decided to can and distribute her sauce instead. Now, her company is a certified kitchen in her home where she, husband and daughter have made a life doing what they love.

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program and host of The Good Food CFO Podcast. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

It’s common for good food business owners to calculate their perfect product price, only to find that it’s higher than they think they can, or should, sell it for.  (So many emotions!)

Doubts often follow as to whether or not you can successfully sell your product at a premium price, or whether the right move is to lower costs so you can sell at a lower price point.  

To help coach you through this decision making process, I spoke with CPG Consultant and founder of Retail Ready, Alli Ball to discuss the steps to making this important decision, and how you CAN build a successful food business with a “high priced” product. 

You can listen to our conversation here, where Alli shares:

• Why looking to your target market is key to landing on
  the right price for your product

• 5 Key Brand Questions to gain clarity on pricing decisions 

• The freeing truth that Everyone is not your target audience

If you decide that lowering your costs is the right move for your business. 

You’ll definitely want to tune in to this video, where I share Strategies for Lowering Your Costs WITHOUT Compromising Your Standards or Quality. 

As always, I’m here to support you as you work through the math and the decision making process. 
Join other food business owners doing this work in the free community. 

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

Our personal money mindset and financial beliefs find their way into our businesses and can affect how we deal with our finances…

from pricing, to how much we pay ourselves, to how much we pay others,
and so much more.

If you find yourself…

• Resisting raising your prices, even though you KNOW you should be charging more 

• Paying yourself at an hourly rate that’s less than what you pay your team
  (or not paying yourself at all)

• Cutting yourself a check each month but NEVER cashing it

KNOW THIS: You are not alone. 

And there are steps you can take to recognize and overcome your limiting money beliefs that are creating barriers to your financial success.

Financial Coach and Founder of Verdi Advising, Caroline Snyder joined me on The Good Food CFO podcast to discuss these and other ways that our money mindset, financial stories and emotions can play a role in our financial decision making.

But that’s not all - She also shared how we can recognize our emotions and overcome the barriers they create. 

If you’re a food business owner that: 

• Feels anxiety, hesitation or fear around the money matters of your food business

• Struggles to raise prices even though you know you need to

• Hasn’t paid yourself, or are paying yourself a meager wage for all the hard work you do 

You’ll find a ton of value and actionable steps to help you understand your money mindset, recognize your fear and emotions, and move forward successfully.

Listen to the full episode here. 

Then join us in the Profitable Food Business Community to share one of your takeaways.

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program as well as the host of The Good Food CFO Podcast. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

I get excited when business owners ask “when is the right time to start paying myself?” because it means you’re actually thinking about it!

Many founders launch their food business with the expectation and belief that they will go unpaid for at least a year and that’s just the way it’s supposed to be.

Most go unpaid for much longer and have no plan in place for when, how or how much they’ll pay themselves in the future.
They simply aren’t thinking about paying themselves - even if they want to, the belief that they shouldn't or can’t, prevents them from really looking into it and taking action.

Does that sound like you? (It was 100% me, about 8 years ago)

One of my top priorities as a financial consultant is getting food biz owners paid! because you don’t truly have a financially sustainable or profitable business unless you’re paying yourself a fair wage.

There is no one-size-fits-all approach to this, but here are a few options to consider:

1. Pay yourself the same hourly rate as your employees.

   This is the approach I take in my business. It forces me to pay myself for my time each week and ensures that there is money left over in the business each month for reinvestment, growth, etc. I sweeten the deal by setting a monthly profit goal - if we achieve it I pay myself a bonus + my team gets one too!

2. SEE how paying yourself your dream salary will affect your business Financially. You may be surprised to find that you CAN afford your dream salary now!

   If you can’t afford that dream salary just yet, how many more units per month would you need to sell, or what other costs could you cut to make it a reality?
   
   If you can afford 50% or some other portion of your dream salary now start there. Then create a plan to increase sales or reduce costs, and increase your salary when you achieve certain milestones.

3. Record an In-Kind Donation to your business for your unpaid time

   If you can’t pay yourself for your time just yet, or can only pay yourself a little bit (there was a point in my food biz where I paid myself just $100/week), Financial Coach Caroline Snyder of Verdi Advising recommends tracking your unpaid time as an In-Kind donation to your business.
   
   Snyder agrees that it’s OK to not pay yourself so long as you have a plan in place for how and when you will start. And she says that tracking your time as an In-Kind donation (although it doesn’t actually affect your business financials) helps you see the value you’re giving to your business each month.

Do you have a method for paying yourself, or tracking your time that you’d like to share?

Join us in the Profitable Food Business Community and tell us all about it!

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 7 years working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

By now you know that the first step in building your most profitable food business is getting a solid financial foundation in place.

Still Working to Build a Solid Financial Foundation?

Or maybe you’re not quite sure what building a financial foundation entails?

Click here to download the free Profitability Roadmap.
It’ll help ensure you have each important pillar in place and are ready to move on to maximizing your profitability.

Got your financial foundation in place?

Great! The next step is to carve out 1 hour per month (yep, that’s it!) to work through the 4 steps for maximizing your profitability.

4 Steps for Maximizing Your Profitability:

1. Get Timely + Accurate Monthly Financials

Your Bookkeeper should provide you with completed financial reports by the 7th of each month, for the month prior. This allows you to see how your business is performing and make timely business decisions.

If you’re doing your bookkeeping yourself, it is imperative that you hold yourself accountable to sitting down at the end of each month to input your financial data and then review your essential financial reports.

2. Create a Profit Plan

Much like a budget, a Profit Plan lays out your business financials for the next 12 months and helps you stay focused on achieving your Financial Success Formula - the revenue goals and cost targets that will help you achieve maximum profitability. You can get detailed in your plan, or just start with the 4 key food business metrics.

3. Track Your Actual Outcomes vs. Profit Plan

Each month, when your financial reports are available, update your profit plan so you can see how your actual revenue, costs and profitability compare to the goals you set.

4. Identify + Implementing Key Strategies

The information in Step 3 can offer amazing insight into how your business is performing and where to focus your attention in order to achieve your business and financial goals.

For example...

• Are your costs on target, but sales lower than projected and affecting profit dollars? You know to focus on growing sales.

• Hitting your sales goals, but your labor costs are too high? Focus your attention on ensuring your labor is allocated correctly and that there are no bottlenecks or backlogs in your workflows that are driving up costs.

• Food Cost % higher than you hoped? Tracking your food costs, or implementing a budget for your purchasing team may help you reach your goals.

Remember, you don’t need to be a financial wiz to build a profitable food business. And I’m here to support you in your work!

The Financial Success Formula Program offers our custom Profit Planning template and hands-on workshops, plus daily support and monthly coaching calls to help you hone your CFO skills.

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About the Author: Sarah Delevan is a Food Business Financial Consultant + Freelance CFO with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

You likely don't need me to tell you that the more cash you've got in your business…

...the healthier it is
...the more likely it is to survive seasonal sales dips, unexpected events, etc.
...the greater ability you have to invest in its growth.

If the events of this year have you struggling to maintain steady cash flow in your business, I've got some info that may be helpful.

Here are My 4 Tips for Improving Your Cash Flow:

1. Make Sure Your Products are Profitable

This may seem like a no-brainer, but many businesses are selling products that have little to no profitability and it’s causing the overall business profitability to suffer. With limited or no business profitability there is no cash to flow in your business!

2. Speed up the rate at which your revenue turns into cash (Accounts Receivable)

Direct to Consumer (DTC) brands have a quick sales -> cash rate. Customers are either handing over cash at the time of purchase, or a 3rd party payment processor is depositing it in your account in just a few days.

Wholesalers and Manufacturers don’t have it so easy, and can have terms as long as net-60!

Exploring options for paid-in-full discounts or 50/50 payment discounts may help you turn your sales into cash more quickly. Just be sure you know how the discount incentive will affect your overall profitability.

3. Slow down the rate at which cash leaves your business (Accounts Payable)

When was the last time you requested a change to your payment terms?

Many new and small businesses are required to pay COD, or are given short net-10 or net-15 terms when they’re just getting started, but after consistent on-time payments you are eligible to request them.

If you’re working with a new vendor make sure you are clear on your starting terms and when you can request an extension of terms - then make those on-time payments, set that calendar reminder, and follow up for longer terms!

4. Look Ahead with Financial Projections

Financial Forecasting is beneficial for LOTS of reasons. One of them is seeing and understanding how your cash flow will change over the next 6-12 months based on seasonal sales trends. From there you can make cash spending vs. cash saving decisions today that will prevent you from being cash-strapped when sales slow down.

Having a long-term cash flow projection is also helpful when unforeseen events happen in your business, or on the planet, as they did this year. In just a few clicks you can see exactly how long your cash will last, how much you will need to rely on credit, or how much your small biz loan request should be for.

Wishing you all the positive cash flow!

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

I recently read “The Top 10 Mistakes That Keep Women Entrepreneurs From Scaling to $1 Million” published on Women / Entrepreneur.

Not surprisingly, several of the mistakes on the list are related to money + finances and offer important takeaways for good food business owners (whether you identify as a woman or not...and regardless of your personal revenue goals).

Here are the money-related mistakes from the article, with a few of my added thoughts specifically for food business owners:

Mistake #6: Insufficient financial know-how

“We don’t need to have finance degrees or MBAs to run our businesses, but we do need to educate ourselves in order to create a cash runway, steward our money better and effectively raise capital when necessary.”

MY THOUGHTS:
You do not have to have a financial degree or an MBA to run your business, and you don’t need to shoulder all of the financial responsibilities, but you MUST educate yourself on the financial realities of your business. Some must-know info includes...

• What your cash flow / cash runway looks like

• How profitable your products and your business lines are, and

• How the decisions you make will affect your bottom-line

Mistake #7: Not having a cash runway

...women are twice as likely as men to shut down their businesses because they run out of cash. You can better avoid this issue by working with an advisor on your cash flow projections or finding a great accountant who can walk you through your numbers. Don’t be afraid to ask for help or say you don’t understand, and be sure to look at what you owe and what is owed to you on a weekly basis so you can have a healthy cash balance.”

MY THOUGHTS:
Agreed! I’ll add that you should also be aware of your vendor terms. Many new businesses are required to pay COD, or are given short net-10 or net-15 terms when they’re getting started, but after consistent on-time payments you are eligible to request them.

If you’re working with a new vendor make sure you are clear on your starting terms and when you can request an extension of terms. Then make those on-time payments, set that calendar reminder, and follow up for longer terms!

Mistake #9: Improperly tracking marketing spend

...marketing is one (of the) biggest expenditures for fast-growing companies. There was a time at Little Pim where we didn’t track where our customers were coming from and didn’t know which marketing channels were performing and why. Eventually, we started keeping a closer eye on our marketing spend — that way, we were able to avoid falling into the money pit that marketing can be and begin getting excellent ROAS (Return on Ad Spend). Figuring out which marketing channels work for you and rigorously tracking your spend is a key part of scaling up.

MY THOUGHTS:
It’s no secret that marketing is an important part of growing your food business, but not having a strategy and not tracking your spend can lead to inefficient spending and take funds away from other important investments.

I had a great conversation about this very topic with Marketing Strategist, Christie Lee of Nourishing Foods Marketing, that will be airing on the Good Food CFO podcast very soon! Click here for updates on the podcast launch, and this episode.

Interested in reading more?
Find the full article on Women / Entrepreneur here.

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About the Author: Sarah Delevan is a Food Business Financial Consultant + Freelance CFO with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

What does slowing down REALLY look like?

Here are a few of the ways that my clients + program members have been slowing down in their businesses:

• Recipe costing (with actual ingredient costs) BEFORE launching a new product.

• Calculating how various discount percentages (15% vs. 25%) for a “bounce back” offer will impact the bottom-line, THEN choosing the option that is a win for both customers AND the business.

• Considering all ingredient sourcing and packaging options for a new (big!) foodservice account to hit the client’s needed price point AND to be profitable.

• Identifying packaging + shipping costs to understand the financial impact of offering free or discounted shipping, THEN implementing the offer that meets customer expectations and maintains profit margins.

All of these examples are situations where the business owner slowed down to look at their numbers and make an informed decision, rather than rushing to get that next sale.

I know what it’s like to launch an incredible online campaign that generates $20,000 in monthly revenue, only to experience $25,000 in monthly losses because of unforeseen shipping + increased labor expenses...

I want you to have BIG sales.
But I REALLY want you to have big profits.
Slowing down makes all the difference.

P.S. Need some support in slowing down, or a little guidance on how to make sense of the information you need to consider for your next important decision?

Join us in the Financial Success Formula Program for daily support + Monthly Coaching Calls. Click here to learn more.

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About the Author: Sarah Delevan is a Food Business Financial Consultant + Freelance CFO with over 7 years in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

Are you considering taking on debt in your food business?

want some advice on whether taking on debt is a good idea?

I often get asked if taking on debt is bad for food businesses, and like so many things in business… IT DEPENDS. 

Every business is unique, and business situations are unique. 

But there is a universal checklist that all business owners can use to help you make the right decision.

If your goal is to create a sustainable business that minimizes risk and grows profitability, and you’re considering taking on debt to make a purchase, or opening a line of credit, this checklist is designed just for you!

#1 Determine if the debt you’ll be taking on is considered to be “Good Debt” or “Bad Debt”

Good Debt is considered to be an investment in your business future, and typically is an investment that will retain or increase in value over time. 

Bad Debt is investing in something you don't NEED, doesn't help you build your business, and loses value over time. 

For some decisions the answer will be cut + dry.
Others (like purchasing a vehicle) are more nuanced. 

To dive a bit deeper into Good Debt vs. Bad Debt, check out this blog post from CPA Melissa Houston. 

If your reason for taking on debt falls into the Good Debt category, by definition move on to #2

#2 Remember Your Business Objectives

Is your food business objective to Increase Sustainability or Profitability? Increase Efficiency? Grow Sales in a Particular Business Line?  

Getting clear on what you want or need to achieve in your business to be successful allows you to identify the right goals to focus your attention on, as well as the actions, activities and efforts that will help you achieve your objectives, and the ones won’t.  

Remembering your business objectives and top 3 goals often makes decisions that seem “big” or difficult quite easy to make. 

#3 Determine if the Debt will move you closer to your business objectives

ASk yourself: WILL this purchase, or will access to this line of credit be used to purchase, things that will move me closer to achieving my food business objectives?

When answering this question it is important that you are honest with yourself and that you do the work to identify real problems that must be solved, rather than symptoms of problems. 

For example, If your business objective is to improve profitability, you must get to the ROOT of why the symptom of low profitability is showing up in your business.  Are your sales too low? Are your costs too high? If the true cause is low sales numbers, why are sales low? Is it Lack of repeat business? Lack of audience? Incorrect message? 

Investing in hiring a sales person or team, or ramping up social media + marketing for a product with the wrong message won’t get you the results you desire. 

When you identify the real problems in your business you can ensure that you are investing in real solutions. 

IF you’ve determined that the purchase or line of credit will solve a true problem in your business and move you toward your business objectives, move on to the last step.

#4 Consider the 2nd order consequences of your decision, financially and otherwise for the business 

We can control the decision that we make, but we can’t control what happens after our decision is made.

This step is an incredibly important exercise in considering the possibility of things not turning out exactly as you plan.

It is the step that most business owners fail to consider (including yours truly) that results in financial loss.  

Ask yourself the following questions…

1. What is the up side? 

2. What is the downside? (What could go wrong?)  

3. Can I live with the downside? 

I recommend talking through #2 with someone else, and remind you to consider the monthly + long-term financial impact it will have on your business, particularly if things don’t work out as planned, as well as who and what it will affect within your business + how.  

Weigh the positives and negatives and make a decision based on the information you’ve laid out.  Determine if you can live with (and afford) the downside. 

Decisions like this often feel like they need to be made quickly. 

But I promise you that thinking through this debt decision checklist and taking your time in the decision making process will produce a better long-term result. 

The less emotion and time play into your decision, the better. 

Having a Profit Plan is also helpful in this process and allows you to run various financial scenarios related to your decision.

Visit our website to learn more. 

AND OF COURSE, THE PROFITABLE FOOD BUSINESS COMMUNITY IS ALWAYS OPEN! 

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

You’ve got big goals for your food business, I know you do! 

Whether you want to build a local family business, a national brand, or a rapidly growing biz that you can sell in a few years…

The path to reaching your goals, and doing so WITHOUT burning yourself out, involves achieving financial sustainability and consistent profitability. 

What exactly is financial sustainability?

Simply put, it’s consistent cash flow within your business that results in no more worrying about if you’ll have enough money to cover the bills, pay your employees and pay yourself. 

why focus on Profitability? 

Profits are the amount of money leftover after you pay for your COGS, operations and labor.  

You can reinvest them to grow your team, expand your operations, hang on to them so your business has cash on hand during slow months…you can use them however you’d like!  The point is that there is money left over for you to put toward reaching your goals. 

how do you achieve financial sustainability and profitability in your food business?

The way you achieve these things is NOT by doing more + selling more.  It’s by understanding, optimizing and maximizing the financial efficiency of your business.

Looking for a hands-on consulting experience?
Fill out this form and we'll set up a call to discuss your goals and how I can help you reach them!

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

When I work with food biz owners 1-on-1 and inside the Financial Success Formula Program, the FIRST thing we do (after making sure they’ve got a solid foundation in place, of course) is focus on achieving financial sustainability + boosting profitability WITHOUT increasing sales. 

We do it by focusing on what’s happening INSIDE the business and…

• Finding profit leaks

• Ensuring their products are priced right

• Identifying inconsistencies within their business

If you’ve ever asked yourself, “WHERE is our money going?!”  or been surprised by big losses, or tiny profits despite growing sales, you’ve probably got at least one of these things happening in your business. 

And it’s holding you back from achieving your financial goals. 

Here are 3 ways to improve your profitability without increasing sales:

1. Find + Fix Profit Leaks

Simply put, profit leaks are expenses in your business that are unnecessary, excessive, or that you are simply unaware of. 
Fixing these is the EASIEST and quickest way to boost the overall profitability of your biz. 

Some examples include:

• Subscriptions that you pay for but never use

• Insurance premiums that jumped and you didn’t notice because it’s on auto-pay

• Bank fees you didn’t know you were being charged

• Over-ordering of inventory or ingredients, or inefficient purchasing.  

2. Price Your Products to Hit Your Target Food Cost Percentage

A lot of people focus on the profit margins of their products… that’s helpful for ensuring that your products are profitable, but not your business - that’s a very important distinction! 

If you’re interested in the latter, and not just having profitable products, take a few minutes to determine the food cost % for each of your products.  If it’s higher than your food cost target the product is hurting your profitability.  From here you can determine if cost reductions or a price increase are the right next step to reach your targets. 

3. Find + Eliminate the Inconsistencies in Your Business

What’s an inconsistency?  Here’s an example: You had a high sales month (exciting!) but your hourly labor costs jumped from they typical 25% to 35% of revenue for the month and ate up 10% of your profits (how defeating!). This jump in spending is an inconsistency and it can happen with any of your variable costs. 

When you experience random or regular inconsistencies in your business it can wreak havoc on cash flow and will prevent you from achieving financial sustainability + consistent profitability. 

Identifying + correcting inconsistencies in your business is a process, but it makes the biggest and longest lasting impact to your bottom line.   


Ready to boost your profitability?!  
I’m excited to hear what you find + how changes will impact your business! 

Need some help identifying your Target Food Cost % or knowing if there are inconsistencies in your business?  Visit our website to explore the multiple services we offer to make your good food business a profitable one.

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of The Profitable Food Business program and the host of the Good Food CFO Podcast. To learn more about Sarah and opportunities to build a more profitable food business Click Here.