Reaching Profitability During a Recession :: Fundamental #2
IT’S TIME TO ADDRESS THE NEWS OF A RECESSION AND RECESSION-PROOFING YOUR GOOD FOOD BUSINESS.
As costs continue to rise, and talk of the impending recession heats up, good food business owners have finances and profit margins at the top of their minds. And understandably so!
In my last blog post, I told you about the 1st of 3 main fundamentals in maintaining a healthy profit margin. These are, by no means, the end-all-be-all of recession-proofing your business, but they are a great place to start, here is #2.
Protect Your Margins
The levers that most good food founders can pull to protect their margins are:
-Improving Production Efficiency
-Changing ingredients and/or sourcing
-Price Increases
All three of these levers must be seriously rooted in data in order for your efforts to be effective. We’ve seen business owners go through all the trouble of raising their price $.25 only for them to report back that it didn’t impact their finances because it wasn’t a large enough to boost their margin. However, that price increase when coupled with more efficient production practices, did ultimately make a meaningful difference.
Now is the time to make informed, strategic decisions for your company around pricing, labor, and COGS, and my goal this month is to provide you with as many tools as possible to make your business recession-proof.
I’M HERE TO SUPPORT YOU — SO JOIN US IN THE PROFITABLE FOOD BUSINESS COMMUNITY TO ASK QUESTIONS AND GET MORE GREAT INFORMATION AND RESOURCES TO GUIDE YOU TOWARD PROFITABILITY, EVEN DURING A RECESSION.
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.