Are Your Numbers Credible?
The Business of Food
by Jennifer Barney
Are your numbers credible?
2-min read
If investors are interested in you but doubt that you know your numbers or doubt your number’s validity, you have a problem.
Too many food brands are basing their growth hypothesis on not much more than something sketched out on the back of a napkin. I’m only half kidding. You’ve probably got your unit economics in excel and have applied volume and velocity in another tab to come up with your pro forma.
But even this isn’t going to cut it.
Not to compare problems but Oatly was just accused of “overstating its revenue and margins.” Whoa. This stuff is important.
As you’ve learned by now, pricing, promo, and margin structure are different not only between channels but within them. Not to mention cost differences between SKUs. If you get it wrong it can be devastating not only to the bottom line but to your future in the biz.
Once you go out with a price to a customer you can’t easily raise it. You can’t go back and say “my investors said I need to raise price because I’m not making my margin”. They don’t care.
Building a customized velocity-based growth and financial plan is the end result of having a sound matrix of price points, customer margins, and all-in (trade spend inclusive) unit economics for each revenue stream scenario.
One of my superpowers is guiding my clients on how to build this for themselves. Unless you are an excel jock, it can get super tedious. But it must be done.
That’s why I’m happy to announce someone else has built a template for you.
Check out Margin Velocity Planner. Here are all the things it can do:
Establish unit economics
Analyze price points at retail
Estimate trade marketing expenses
Determine viable COGS ranges
Build a multi-year financial plan
I have demo’d this with founder and creator Manoli Kulutbanis and it’s pretty slick. For a few hundred dollars (read: not thousands) you can save a bundle of time and frustration.
What’s even better - Manoli is offering a 10% discount on the Starter subscription (2 user licenses + 1 hour Zoom support) exclusively for my readers! Before you head over to purchase, Manoli is offering to walk you through the tool AT NO CHARGE so you can see how it works. To schedule a demo, click here and let Manoli know I sent you!
Go get ‘em!
All my best,
Jennifer
News
Chloe Sorvino goes inside Spruce Point's attack alleging mismanagement and false claims at Oatly by Forbes Fresh Take
Here are five ways that food makers, grocers and restaurants are making up for higher costs - Wall Street
Amazon is expanding its selection of products recognized under its Climate Pledge Friendly program. Here's how you can qualify
I'd love to hear from you - get in touch at jennifer@3rdandbroadway.com