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.

Your Financial Reports are meant to summarize your food business financial data and present it to you in a meaningful way.

financial reports should provide value to you, and help you make key strategy + business decisions.

For example, you should easily be able to answer the following just by reviewing your Profit + Loss Statement (aka Income Statement):

• Which line of business is bringing in the most revenue?

• What does it cost to package + ship your online orders?

• What are your total labor costs with taxes, benefits and fees included?

If your Profit + Loss, or Income Statement, isn't providing this type of valuable info about your food business (without having to do side calculations or dig for additional data) you're working with what I call "Basic" financial reports in need of a revamp.

Still not quite sure if your financials are in need of a revamp?

Here are 3 signs that they your food business financials
need a revamp…

#1 - All of your sales are lumped into one line item

Even though you sell online, wholesale and at farmer's markets... if you've got more than one revenue stream you should see individual income data for each of them.

#2 - All of your Cost of Goods Sold are lumped into a single line item

I know you've got more than one COG!

#3 -Your Expenses are shown in a simple list - likely in alphabetical order

Accounting software includes a "standard" list of common business expenses. Categorizing your expenses to fit into this simple list will NOT help you understand how your business is performing and build a profitable business.

Your expenses WILL be unique, and your financial reports need to reflect that.

Does this describe your reports?

The good news is that you have a say in what your financial reports look like, and these things are easy to change!

When your reports are designed for YOUR business and are working FOR YOU, you can count on them to show you how your business is performing, set meaningful goals + get to work on building a profitable food business!

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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, 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 have been working to bust the “30% Food Cost” and other ‘industry standard’ MYTHS for years. 

Good news: progress is being made and the result is an increase in profitable food businesses all across the country! 

Why am I so passionate about this? 

Simply put: Industry Standards are a danger to your profitability, period. 

Partially because the “standards” are for restaurants, NOT CPG Brands, Meal Delivery, Catering or Wholesale businesses. Partially because they are old and outdated. Mostly because industry standards are taken out of context and not incorporated into a holistic approach to building a profitable food business. 

That’s right, I said it. HOLISTIC. 

The parts of your business don’t operate in a vacuum...

...They are all interconnected
…Each must hit its goal
...They must work together to produce a profitable outcome.

Your business must be viewed as a whole. 

30% Labor Costs might be the right goal for your business! 
IF your other costs total less than 70%.
If they total more, hitting a 30% labor cost will result in monthly losses instead of profits.

One member of the Financial Success Formula program joined with a 25% labor cost and struggled with cash flow + financial sustainability

Another hits 38% labor costs and is consistently profitable! 

Let go of industry standards and find the RIGHT MIX of revenue + cost targets for YOUR business. 

READY TO GET STARTED? 

Get the control and confidence you need as a business owner and get your Profit Assessment to identify WHERE your business is on the road to profitability, and the next steps you can take to find the right targets for your business.

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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 grow a more profitable food business Click Here.

I know… You want your prices to be competitive. 

You may be thinking...
They are a successful business at the top of their game, so if I model what they are doing I’ll be heading in the right direction. Right? 
Wrong. 

NOTHING is as rosy and perfect as it looks on the outside.  
Take it from me - there are lots of  “successful” businesses with awesome products, killer sales numbers, and not a penny of profit to show for it. 

Pricing your products based on what the “top” brands in your market are doing puts you on the fast track to financial struggle. 

To achieve long-term, sustainable financial success you need to price your products right for YOUR business. 

Here’s a little story for you…
New clients of mine recently pivoted their business model to offer weekly meal delivery service. 
The changes to their business model were quick - they needed to create menus, price them, build a new webpage and start promoting FAST. 

To set prices they looked at other businesses making the same pivot and mimicked the pricing of the company that everyone respects and admires in their industry….

“We saw their pricing and figured they know what they are doing (they are super successful) let’s match their pricing and we should be good.”

Well, two weeks later that successful company was raising their prices!  
The message that sends is that they DIDN’T have it all figured out. 
They were likely losing money at the low price point they set and needed to make adjustments. 

Now my clients were seeking help to set prices that were right for their business, and stop chasing what others were doing. 
Smart Move! 

The time and money lost over the first few weeks can’t be recovered, but corrections can be made. 

Pricing your products based on the competition, your gut, or an industry-standard is one of the biggest mistakes I see food business owners make. And it costs you a lot of time and money. 

But, don’t feel bad if this is a mistake that you’ve made or are making. 
It’s an easy fix and I’m here to help you get it right. 

Building a financially sustainable and profitable business starts with knowing YOUR Financial Success Formula.  

If you’re eager to learn more…

Visit our products page here

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 and is the host of the Good Food CFO Podcast. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.

You do NOT have to be a financial wiz to build a profitable food Business!

If you have these 3 key ingredients in place you can achieve financial success.

In this video I'm sharing:
- 3 Key Metrics to Know + Track for Your Business
- The Importance of Setting Cost Goals - it's not ALL about sales!
- My #1 Strategy for Achieving Your Food Business Goals

Share your takeaways and next steps for your business in the comments.

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AND OF COURSE, THE PROFITABLE FOOD BUSINESS COMMUNITY IS ALWAYS OPEN! Ready to dig into the work?

Download the FREE Profitability Roadmap.