Scale Up Smart Supply Chain Logistics
Transcript of Scale Up Smart Supply Chain Logistics
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SO YOU
The Recipe for Success
Scale Up Smart
Supply Chain Logistics
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The Food Entrepreneur
IS THIS YOU? Part or full time job
First business as an entrepreneur
The food industry is new to you
Bootstrapped to this point with your own funds (or
very small family loans)
Everything goes back into the business
You haven’t paid yourself
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Scaling Up
Make More Money
Make It Your Primary Income
Focus Only On The Business
WHY?
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Scaling Up…
MOST WASTE VALUABLE TIME & MONEY
SOME SHUT DOWN BUSINESS
IS HARD!
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Scaling Up
TIMEx2
MONEYMore than you think
INDUSTRY KNOWLEDGEDon’t go it alone
REQUIRES
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RECIPE
• Know your Path to Market
• COGS Efficiencies
• Production Efficiencies
• Licenses & Labels
• Delegate Up
• Cost of Sales & Cash Flow
• Financing for Success
Scaling Up Smart
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RECIPE Choose a business model
Food Business Models That Achieve Scale
and Cash Flow
Go Where the Market is
Local
Regional
Sell Business
National
Sell Business
Stay Small Diversify Income
Horizontally Integrated Businesses
Vertical Integrated Processors
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RECIPE
Your Product
Wholesale
Retail
Food Service
Restaurants
DTC
Ecommerce
Own Site
Amazon
Other SitesMarket
Choose Your Sales Channels
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COGS Efficiencies
• Ingredients
• Packaging
• Labor
• Plan ahead for Wholesale & Distribution
Need price parity from the start
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RECIPE COGS, Gross Margin & Pricing - DTC
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COGS Efficiencies
• Ingredients
• Value Engineering
• Case or Bulk Discounts
• Wholesale Account
• Packaging
• Price discounts in large quantities
• Shop around
• Pick up yourself
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COGS Efficiencies
• Labor
• Time efficiencies
• Specialized Equipment
• Convert ingredients to weights
• Get help
• Co-packer
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RECIPE COGS, Gross Margin & Pricing - Wholesale
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Production Efficiencies
• Commissary Kitchen
• Right equipment
• Proximity
• Flexible hours
• Storage
• Wholesale buy-in
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Production Efficiencies
• Equipment
• Bottler
• Industrial Mixer
• Steam Kettle
• Multiple Ovens
• Labeler
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Production Efficiencies
• Co-packer
• Shop around for quotes
• First run fee
• Quality Assurance
• Negotiate contract terms
• Inventory on demand
• Price breaks
Have a lawyer review your co-
packing agreement for terms
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Licenses
• Wholesale
• State of Colorado
• Depending on product may need:• Process Authority (Juice or Acidified)
• Must update any time there is a change in the recipe
• USDA oversight
• DTC Sales• Non PHF
• PHF Retail Food Establishment License (county health dept)
• Register with FDA
• If ANY ingredients or packaging come from outside the state
• Food Facility is commissary kitchen
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Labels
• UPC Barcodes
• One for product, one for case
• Nutrition Panel
• Ingredients
• Claims
• Certifications
ONLY use GS-1
Hire a graphic artist who knows
labels
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Misc.
• Trademarks
• Tess Search
• Becomes a responsibility
• Bookkeeping
• Accrue your one-time expenses
• Inventory
Don’t use the inventory feature in Quickbooks. Not set up for
WIP and other food nuances.
Do a MANUAL hard count – account for it with a journal entry
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RECIPE Delegate Up
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RECIPE Delegate Up!
Bookkeeper Digital Marketer Sales Website
Production Delivery Shipping
Customer Service Graphic ArtistPR Agency Business Coach
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Where We Meet
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The Magic Numbers
$250,00045% GM
$112,500
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Overhead
• Fixed expenses
• Lease or building payment
• Salaries and associated payroll costs
• Licenses, insurance and other fees
• Legal and accounting costs
• Variable expenses
• Utilities
• Commissary Kitchen
• Sales & Marketing
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Cost of Sales
• Distributor – 20% margin
• Marketing & Sales (~ 20% of sales)
• Broker - % of sales
• Slotting Fees, Chargebacks, Free Fills
• Promotions
• Minimum of 10% quarterly
• Other optional apps and scanbacks
• Demos
• Online Advertising
• Trade Shows
• Contract Services
Can’t set it and forget it
once you are in distribution
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Cash Flow
Cash
Purchase Materials
Produce Inventory
Sell Product
Collect Cash Cash
Purchase
Materials
Produce
Inventory
Sell
Product
Collect
Cash
90-120
days
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RECIPE A profitable food business
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RECIPE
• Plan, Plan, Plan
• Up to date balance sheet
• Projections – 3 years ($250k in sales)
• Sources & Uses Table
• Find Financing
• Friends & Family
• Crowdsourcing
• PieShell
• Equity
Sources Amount Uses Amount
SBA 7a Loan $30,000 Warehouse $15,000
Friends &
Family
$ 5,000 Equipment $ 5,000
Startup Equity $ 5,000 Working
Capital
$30,000
Crowdsourcing $10,000
Total $50,000 Total $50,000
Financial Success
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Don’t Go It Alone
• Find Your Tribe
• Naturally Boulder
• Colorado Food Works
• Join “Grow Your Food Business” on Facebook
• Find a mentor, or two
• Podcasts
• Edible Alpha
• Brand Secrets & Strategies
• Delegate Up!
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A little about me
• 20+ years in food industries
• Restaurants
• Coffee Shops
• Farm – Wholesale
• Farm – CSA Direct to Consumer
• Purchasing
• Commissary Kitchen
• Started a food business
• Year three of food business consulting
• 10+ years Marketing
• Branding
• Social Media
• Graphic Design
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What We Do
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sarikimbell.com/startup