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A few weeks ago I was asked by an industry peer what causes most businesses to fail, and what can they can do to avoid failure?

That's a pretty big question! But the answer is actually fairly simple...

Most Businesses fail because founders launch without a clear picture of: 

1. The type of business they want to build

2. How and when the business will be profitable

3. How much money it will take to reach profitability

It All Starts with Your Vision

Creating a vision for your business is much more than just an exercise in wishful thinking or day dreaming, it informs critical elements of your business and enables you to make decisions from day one that will create financial confidence and set you up for financial success.

Determining if you want to be a local, regional or national brand informs who you will sell to, how your product will get to your customers and the partners you'll need in order to reach your growth goals.

For example:

• As a Direct to Consumer business, you have a direct sales relationship with your end-consumers.

• In Wholesale Direct channels, you sell to Retailers who then sell to your consumers.

• With regional or national distribution, you may sell to distributors - who then sell to retailers, who then sell to your consumers.

• Via B2B E-commerce sites you sell (and ship) directly to retailers who then sell to your end consumers, but the sites also take a % of revenue.

The more businesses between you and your consumer, and involved in each transaction, the smaller your margin and the less you make on the sale of each unit. Knowing who you'll sell to today and in the future informs how you price your product in every channel - even those you aren't selling in yet - and the margins you'll hit in each. While we do have margin benchmarks for creating a financially sustainable business, the most important thing to know is how your margins will affect your overall financials - particularly how many units you need to sell to be profitable, as well as if (and how much) you'll need to leverage debt to scale and grow your business.

When you have a vision for your business and use that vision intentionally to identify your customers and the partners you'll need today and down the road to achieve your vision you're able to make informed pricing, margin and growth decisions today and eliminate many surprises down the road.

Looking for More Support?

Let us complete your Profit Assessment, we’ll dive deep into every aspect of your business’s finances to analyze your performance, diagnose problems, and strategize a clear path towards your profit goals. 

CFO Profit Assessment - We’ll do the work for you so you can focus more on what you love to do!

If you are looking for additional help in getting clear on your vision and creating a financial plan to achieve it, we have a suite of courses and tool kits that you can access inside The Good Food CFO Community , including our Vision & Goal Setting course.

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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 serves 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.

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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 2nd 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 #3.

Spend Intentionally

As business owners, there is so much that is just completely out of our control — this recession included! However, how we spend our money is firmly under our control, and when you create a budget and spend with your eye on the ROI, good things happen — like profitability!

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.

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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.

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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.

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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.

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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!

Through the years, I’ve identified three 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 #1.

Know Your Costs

Do you have a system in place that enables you to track all your costs so you always know exactly how much you’re paying?

Tracking your ingredient and packaging costs is fundamental to keeping a healthy profit margin — you can quickly assess whether that $2/lb price increase *really* is affecting your bottom line. It could be minor, but it could be catastrophic. By tracking each and every cost, you’ll be able to quickly assess what moves you need to make accordingly.

I can’t stress enough how important it is to have accurate data . We’ve had clients go through all the trouble of raising their price by $.25 only for them to report back that it didn’t impact their finances because it wasn’t a large enough to boost the 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.

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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.

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I've got big news for you:
You CAN be in control of your cash flow.

Do you feel like you're controlled by your cash flow instead of the other way around?

I'm here to tell you that it doesn't have to be this way. In fact, it's a common misperception that food founders can't achieve control of their cash flow prior to profitability. This is a myth!

You don't need to be profitable before taking control of your cash flow. What you do need is:

1. A profitable product
2. The ability to achieve gross profits at least 8 months out of the year
3. A diligent eye on customer invoices and follow-up for timely payments

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If you've already got those three essentials squared away, here are some additional tricks and tools you need to effectively manage your cash flow.

Ignore Your Bank Account

Yep, you read that right. The most successful way to be in control of your cash flow is to create a budget (we love YNAB!) and to spend according to it, not your bank balance! Bank balances can be misleading — they can feel huge and comfy right after customer payments come in, and uncomfortably low after your big first-of-the-month expenses hit. These financial swings can cause a range of emotions (and spending).

Budgeting your cash allows you to assign a job to every dollar, which allows you to know exactly how far into the future your cash will (or will not) carry you. You'll know how long your operating costs and payroll are covered, and you'll also know how to prioritize following up on past-due invoices.

By looking at your budget instead of your bank account, you'll reach a new level of freedom. You'll find the confidence to withstand the days of low bank account balances and the fortitude to hold off on big spending when your bank account feels a bit too comfortable. Being a business owner comes with plenty of ups and downs as it is, but by ignoring your bank account and trusting your budget, you can maintain control of your cortisol levels and your cash flow.

Know Your OGSMs

OGSM stands for Objectives, Goals, Strategies and Measures. More simply put? Have a plan and stick to it. Start by identifying your business goals and objectives for the year. Then, determine the ways you'll work toward those goals. Identify what a metric of success might look like, and as you work toward these objectives, keep going back to those success metrics.

Are you on track? Are your strategies working? Do you need to adjust or optimize? Go back to your plan.

When you know what your plan is, you're far more likely to spend in a way that drives results, rather than making financial decisions that split your focus and ultimately add up to big expenses with little progress to show for them.

Always Be Bootstrapping.

Like Jack Stack, author of "The Great Game of Business", I am a believer in operating a company with a bootstrapper mentality. What does that look like? For me, it means being hopeful and excited about the future, but never taking it for granted. And not believing the myth that if you just keep working harder everything will turn out right — I did that once, and I'm here to tell you there's a better way.

"Bootstrapping" is not rooted in a scarcity mindset. It's not about nickel-and-diming your way to profitability or always doing everything yourself, never risking the expense of hiring experts. Rather, it’s about being intentional with our money and fully informed about the financial health of our business so that we can easily determine the best next steps.

Want some examples of how to maintain a bootstrapper mentality? Stay close to your key performance indicators. Perform weekly and monthly financial reviews, careful to note if your COGS are fluctuating. Be aware of when your sales or margins are dipping or if you're hitting your Accounts Receivable targets and turning sales into actual cash.

🙋‍♀️ I’m a proud bootstrapper with a profitable business, a growing team, and big dreams of helping you build a profitable business while changing our food industry!

I’m also here to support you — so join us in the Profitable Food Business Community to ask questions and get more great tools to guide you toward profitability.

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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.

ARE YOU CONSIDERING A BIG FINANCIAL DECISION FOR YOUR FOOD BUSINESS?

WANT SOME ADVICE ON HOW TO MAKE THAT DECISION CONFIDENTLY?

I often get asked my opinion on big financial decisions that food business owners are making - "is it a good idea?" "is it a bad idea?", "what would you recommend?". My response is usually to walk them through this 3-step process.

Every business is unique, and business situations and decision is unique.

But there is a universal process that all business owners can use to help make financial decisions confidently.

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

#1 REMEMBER YOUR BUSINESS OBJECTIVES

WHAT DID YOU SET OUT TO ACHIEVE THIS YEAR THAT WILL MOVE YOU CLOSER TO YOUR BIG BUSINESS GOALS?

Business Objectives are measurable targets that define progress toward your annual goals, and in turn move you closer to achieving your big business vision.

Creating a clear vision for your business, setting clear goals, and identifying 3 measurable objectives that will help you reach those goals is essential work for good food business owners. This work enables you to focus your attention, energy and money on the actions, activities and investments that will help you achieve your goals, and the ones that won’t.

Don't have a clear vision, goals or objectives for your business? Check out this post.

3 STEPS TO SETTING + REACHING YOUR BUSINESS OBJECTIVES

#2 DETERMINE IF THE INVESTMENT WILL MOVE YOU CLOSER TO YOUR BUSINESS OBJECTIVES

ASK YOURSELF: WILL THIS PURCHASE, INVESTMENT OR DEBT 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 the real problems that must be solved, rather than symptoms of problems.

Here's an example: Your business objective is to improve profitability. To do this you must get to the ROOT of why the symptom of low profitability exists in your business. Are your sales too low? Are your costs too high?

If you identify the cause to be low sales numbers, ask yourself (and your team) why. Is it Lack of repeat business? Lack of audience? Incorrect messaging?

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

When you identify the real problem(s) in your business you can ensure that you are investing in real solutions.

IF you’ve determined that the investment will help to solve a true problem in your business and move you toward your business objectives, move on to the last step in the process.

#3 CONSIDER THE 2ND ORDER CONSEQUENCES OF YOUR DECISION

WE CAN CONTROL THE DECISION THAT WE MAKE, BUT WE CAN’T CONTROL THE OUTCOME.

THIS STEP IS AN INCREDIBLY IMPORTANT EXERCISE IN CONSIDERING THE POSSIBILITY OF THINGS NOT TURNING OUT EXACTLY AS YOU PLAN.

This is the part of the financial decision making process that most business owners fail to consider (including yours truly) that results in financial loss, and regret.

When you're faced with a big financial decision ask yourself the following questions:

1. What is the up side?

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

3. Can I live / can my business survive with the downside?

I recommend talking through the second question with someone else, and if that someone else is outside of your business that even better. You are seeking all the potential negative outcomes and an unbiased point of view is extremely helpful. In the process, remember to consider the monthly + long-term financial impact it could 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, determine if you can live with (and afford) the downside, then make a decision based on the information you’ve laid out.

BIG FINANCIAL DECISIONS OFTEN FEEL LIKE THEY NEED TO BE MADE QUICKLY. 

I PROMISE YOU THAT THINKING THROUGH THIS FINANCIAL DECISION CHECKLIST AND TAKING YOUR TIME IN THE DECISION MAKING PROCESS WILL PRODUCE A BETTER LONG-TERM RESULT. 

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

Having a Profit Plan or Financial Projections is also helpful in this process and allows you to run various financial scenarios so you can actually see all the possible outcomes.

Visit our website to learn more.

AND OF COURSE, THE FREE 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 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 had the honor of being a guest on an amazing and resourceful podcast "Honest Ecommerce" hosted by Chase Clymer.

If you haven't listened before, I highly recommend it. Honest Ecommerce is a weekly podcast, community, and endless resource for ecommerce store owners and managers who are focused on continued wins.

In the episode we discussed:

• The Financial Success Formula

• When to Raise Your Prices

• How to determine the financial health of your business

And more…

You can listen to the full episode here, enjoy!

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Join us in the Profitable Food Business Community where we're talking Shipping Offers, Product Bundles + Discount Strategies for a Profitable Holiday Season!

If you haven't yet, complete your Profit Assessment to get a clear understanding of your numbers and make informed financial decisions as we head into the holidays. Learn more here.

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 8 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.

Celebrating success in good food businesses is always motivating, but reflecting on failures is vital.

I recently read an article featured in Food Business News about a good food business that “failed” but whose owner said it was “not a waste”.

Here are the 5 Lessons Kyle Peters, founder of Carter & Oak learned from his experience as a Good Food Business owner:

1. Margins matter: 

“Everyone says it, but margins, margins, margins. Your margins need to make sense from the jump. I can’t stress it enough that you should be reaching out to co-packers before you need one to learn what the cost structure could be if/when you eventually are ready to scale.

“Reach out to your suppliers and find out pallet, half truck and truck load pricing. This also will help you get a better idea of what your COGS (cost of goods sold) could be in the future. If the numbers don’t work, then you need to change something.”

2. Adapt, but don’t compromise: 

“People think all you need to be successful is hard work and passion. That’s not true. Economics matter. The finance of the business matters. You need to understand numbers and also realize that saying, ‘I can’t create this product the way I want to for the price I need to’ and then moving on, that’s a strength. That’s a win.”

“You may have failed at making that product successful, but you’re succeeding in becoming a better entrepreneur and a better person because it takes a lot of self-awareness to recognize that, and ultimately that makes you stronger. Now you can put your efforts and energy into something that will work.”

3. Be realistic: 

“I was blinded by that grind, hustle, success culture in the beginning. I quit my job right away and had nothing else, and that’s silly. You have to be practical. You have to look at things with a business mind. You’re going to come into those situations where you do need passion, you do need drive and grit and everything else to push through, but for me, right now, this wasn’t one of those times. I couldn’t passion or grit my way to better unit economics.”

4. Be patient: 

“Have aggressive patience. You need to understand that things take time, but that doesn’t mean just forget about them or stop working on them… Give people (especially buyers) the appropriate time and space. But don’t get discouraged after a month… or six.”

5. Be humble: 

“Have a clear plan and vision for how you want to execute on your business. But don’t get so married to the original plan that you fail to recognize if/when things need to be changed… like a rebrand. You must learn to put the business and others before your ego.” 

You can read the article in its entirety here Five Lessons from a Failed Food Business.

Join us in the Profitable Food Business Community where we host Free Live Q+A Sessions on the first Tuesday of every month.

If you haven't yet, complete your Profit Assessment to get a clear understanding of your numbers and make informed financial decisions as we head into the holidays. Learn more here.

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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.

Profit First is a Cash flow Management System that supports prioritizing Financial Sustainability and getting business owners paid.

It is a tool for helping you implement a financial strategy that will lead to financial sustainability and profitability. I am a proponent of the strategy because it has proven to be a valuable extension to the work that I do with my clients and program members, BUT Profit First will NOT make you financially sustainable and operating as a cash-based business overnight.

What Profit First CAN Do is:

1.Help with the implementation of your financial strategy

Have you ever created a budget, a financial model or plan, and after a few weeks or months the whole thing is out the window because you didn’t stick to it? It’s totally normal and co common because it’s human nature! Many of us, me included, need some guidelines on spending to stick with the plan. Profit First is a strategy that can provide that for us.

2. Normalize Cash Flow

Rather than peaks and valleys in your cash accounts, rather then getting caught in the “debt cycle” where you pay off a bunch of debt with the cash on hand, only to run short on cash a few weeks or months later REQUIRING you to rely on Credit again, the Profit First cash flow strategy helps bring consistency.

3. Enable you to understand HOW and WHERE you are spending money in your business

Separating your cash into different accounts allows you to easily identify where you spend the most money, and if you have a tendency to 'overspend' or make purchases without thinking about the overall budget and ROI, or if you’ve been hanging on to money that could be reinvested into your business to help it grow.

a group coaching program member recently shared with me…

“I want to thank you for implementing Profit First in your coaching - it has really given me the confidence to buy materials and ingredients to prep for the holiday season! And your tools have been so helpful for assessing our new wholesale prices.”

Join us in the Profitable Food Business Community where we're talking Shipping Offers, Product Bundles + Discount Strategies for a Profitable Holiday Season!

If you haven't yet, complete your Profit Assessment to get a clear understanding of your numbers and make informed financial decisions as we head into the holidays. Learn more here.

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About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 8 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.

The holidays are among us and we want you to have a successful holiday season!

We know how important it is for CPG brands to impress past, present and future costumers during this time of year, but you don’t have to sacrifice profits to make that lasting impression.

You CAN have a profitable holiday season and we've got some resources to help you figure it all out:

• CNET article detailing all of the changes for USPS shipping

• Resource Roundup of USPS, Fedex, and UPS rate charts + a Calculator to help you understand your costs

• The Good Food CFO Podcast Episode 26

• My Blog Post: 4 Steps to Creating a Profitable Shipping Offer

Want more support and resources?

Join us in the Profitable Food Business Community where we're talking Shipping Offers, Product Bundles + Discount Strategies for a Profitable Holiday Season!

If you haven't yet, complete your Profit Assessment to get a clear understanding of your numbers and make informed financial decisions as we head into the holidays. Learn more here.

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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.

The USPS recently announced a slow down in delivery speed and a temporary increase in shipping rates for the holiday season. Likewise, Fedex and UPS both raised their prices in 2021.

So, what can you do as a business owner to ensure that you’ve got a shipping offer that is both enticing to your potential customers AND protects your financial sustainability?

Here are 4 Steps For Creating a Profitable
Shipping Offer:

1. Know the Cost to Ship Your Product(s) -- Both individually and in any popular bundles or combinations.

• If your products fit into a Flat Rate shipping box or envelope your shipping costs are pretty easy to determine

• If your products don’t fit into a Flat Rate box your Shipping costs will be based on the size/weight of the package and how far you are shipping it.
  
  Each carrier uses a “Shipping Zone” system for calculating the costs for domestic shipping - if you aren't sure what it costs to ship your package we’ve got a roundup of USPS, Fedex and UPS resources as well as a really great calculator from ShipStation to help you understand how the “Shipping Zone” system works, and to find your max shipping rates based on where your business is located. Click here to access the shipping cost resources.

  Knowing this information will help ensure that you’re factoring the RIGHT shipping cost into your shipping offer.
  

2. Know Your Margins

Know and use your margins as a guideline to determine how much you can afford to spend or contribute to the cost of shipping without hurting profitability. For example, do you have 5% of online sales revenue to contribute to your shipping costs or are your margins tight at this phase of your business and you need your customer to cover the cost of shipping entirely?

Knowing your overall business margins, as well as your margins for your online sales channel and EACH of the online platforms you utilize can help ensure that you’re selecting the right offer for each site.

You DON’T have to have a consistent shipping offer across all online platforms!

3. Consider the Shipping Offers that could be well-suited for your business financially, and offer benefits to your customers:

You may offer…

• Free Shipping on ALL Products , and work all or some of the cost of shipping into your product price.

• Flat Rate Rate for ALL Shipments (even if you don’t use a flat rate box) - this means that you and your customers share the cost of shipping - but remember to check your margins and only contribute what makes sense for your business.

• Free Shipping Only When Customers Spend a Certain Amount of Money

• Free Shipping Only when a set minimum number of items is purchased

• You may not have an offer - you may charge for shipping based on actual costs and pass any business discounts on to your customers
  

4. Know your Customer

Online data and research is conducted across all retail categories and customers of mission-driven food and beverage businesses tend to have different values than the general population.

So while knowing that, in general, the majority of online shoppers expect free shipping, learning more about your customers values is an important element to determine IF a free shipping offer would indeed have a positive impact on sales, or IF charging for shipping is deterring people from purchasing your product.

This may not be something that you can ASK your audience, but we’ve seen a lot of success with testing -- for example, a seasoning blend company based in Oregon recently did A/B Testing to see how customers responded to lower product price with a fee for shipping vs. a higher product price and no shipping fee. They tracked consumer behavior on the website, the number of abandoned carts and at what point in the process the cart was abandoned to determine the best shipping offer option for their audience.

For more insights into creating a Profitable Shipping Offer check out Episode 26 of The Good Food CFO Podcast.

And join us in the free Profitable Food Business Community for additional resources and support for a profitable holiday season!

Sarah’s Instagram: @sarah.delevan.consulting

Connect with Sarah on LinkedIn

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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.

Profit First is a Cash flow Management System that supports prioritizing Financial Sustainability and getting business owners paid.

It’s a tool for helping you to implement a financial strategy that will lead to financial sustainability and profitability. And I am a proponent of the strategy because it has proven to be a valuable extension to the work that I do with my clients and program members. 

BUT Profit First will NOT make you financially sustainable and operating as a cash-based business overnight.

There are 4 Steps to Implementing Profit First in Your Food Business:

1. Understand where your business is financially right now

2. Identify WHERE you want to be, and by when (your financial goals)

3. Create a Plan for achieving those goals

4. Then, begin implementing Profit First cash flow strategies to assist in becoming financially sustainable, profitable, and eventually Cash-based.

Let's dig into each.

STEP 1 - Understand where your business is financially right now. We do this through a Profit Assessment

Profit First offers a Profit Assessment structure, but for Food Businesses it will look a bit different.

They refer to a category called Materials & Subs -- stands for Materials and Sub--contractors, and the items that are included in Materials must equate to 25% or more of real revenue.

For Food Businesses we eliminate “Materials & Subs” and utilize COGS - Specifically your Ingredients & Packings, Labor or Co-packing Costs AND all other COGS -- we want to see every penny that you are spending to produce and deliver your product / service to your customer. And that includes Merchant Fees, Sellers Fees, Market Fees, Shipping Costs, etc.

These costs are variable and affected by how much product you produce and sell, so we want to get VERY clear on what they are.

We also look at your Operating Expenses, current Owner’s Pay, Business Tax Savings and Profit to get a clear picture of you Business Profitability, not just your operational profitability.

The Assessment helps you to see your business finances in a whole new way, and identify what’s working, what’s not, and exactly where to focus your attention to improve your financial outcomes.

STEP 2 - Get Clear on Your Financial Goals, or what we call Your Financial Success Formula

What COGS% is going to help you maximize your Gross Profits, or as they call it in the Book your “Real Revenue”

And what % of your real revenue do you want to be able to set aside as Profit?

What Owners Pay % will help you reach your salary goal

What Tax Savings % will cover your quarterly or annual tax payments?

And What Operating Cost % is going to help you achieve financial sustainability?

These are your TARGETS. When you’re clear on your targets you can create a plan for getting there from where you are right now.

Step 3 - Create Your Roll-out Plan for Achieving these goals.

Financial sustainability comes by making incremental, meaningful changes to reach your targets in the time-frame that is right for you.

What is that time-frame? Is this an emergency financial situation?

Do you have some time to make these changes? Once you identify the time-frame you can see how your targets will change between now and then.

For example, if you are not currently paying yourself, your current allocation is 0% to Owners Pay - Your goal may be 40% of Real Revenue in 12 months. They might break down into 10% allocation increase each quarter from now until the end of the year to reach your goal.

So at the end of quarter one you’re allocating 10% to Owners Pay, at the end of Quarter 2 you’re allocating a total of 20% of Real Revenue to Owner’s Pay and so on…

Step 4 - Identifying the Strategies to Reach Your Goals

You want to take Implementation Step-by-Step based on where you can make the most financial impact, and remember it’s VERY RARE that the answer to your financial problems is ONLY to SELL MORE. You may need to increase sales but what can you do INSIDE your business - the things you have control over - to improve your financial situation?

Inside our Profit Assessment Online Course we’ve got a Roll-out Calculator And Strategy Finder to help you do this work.

When your Roll-out Plan is created, your key strategies are identified it’s time to Open Your Profit First Bank Accounts & Make Your Allocations

To learn more or to schedule a free 30 minute consult visit our website you an also find Sarah on Instagram: @sarah.delevan.consulting and LinkedIn

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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.