Accountfully regularly interviews consumer packaged goods (CPG) business leaders on our podcast The Month End. Many of our CPG business podcast guests are those we have helped with our outsourced accounting services, and others are industry stakeholders and strategic partners that we have met along the way. The one thing they all have in common is their wealth of real-world knowledge to share. Each episode is jam-packed with advice, and we encourage you to listen to each episode in full, but, if you are like us accountants, who are (mildly) obsessed with the “bottom line”, we narrow down each to the do’s and the don’ts.
Volume seven guests are a nice mix of founders and industry heavy-hitters, and the advice does not disappoint. We’ve got gems from supply chain pros and inventory champions who can share a few things about making on-the-spot decisions for long term success. Here is your recap of the two most important pieces of advice we get from each episode: one do and one don’t, summing up the most notable aspects of running, starting, and growing an inventory or product-based business.
For more context and to experience the full episodes and show notes, visit our podcast page.
Juli knows a thing or two about managing supply chains and product development so that business can meet consistent, high consumer demand. If your goal is to get into the big players, like Target, she has the game plan for you to follow. She takes her decades of experience managing supply chains and vendors and shares that insight with consumer brands.
JHL Solutions is a consultancy dedicated to helping build phenomenal private-label partnerships. Juli gives us a glimpse into how brands can prepare themselves to establish lucrative and collaborative retail relationships in the episode.
“I touched on it earlier, but it bears repeating. It’s, ‘ask a lot of questions’.
"Just coming to this business space, entrepreneurs are excited about their idea, they're curious about creating something new. Make sure you're bringing that curiosity to the partners that you're working with."
It absolutely applies with retailers. I find that suppliers that don't ask a lot of questions often don't understand the full agreement that they're reaching. So that's a must-do for me.”
“Don't forget to focus on the other party's perspective. Try to anticipate what's going to be most important to them in framing the conversation. What are they hoping to get out of the agreement? Whatever type of agreement you're trying to reach. I think that's a way to help create some more value and find solutions that aren't so you-focused but that ultimately are creating a bigger slice of the pie again (pick your euphemism). Don't forget that other perspective.”
Keith Kohler brings his experience as both a businessman and CPG consumer to help brands set themselves up for success through preparing for using business funding to accomplish their goals. His focus is finding the right financing at the right time. He is such a wealth of information, we did two episodes. Episode 29 focuses on the types of financing out there.
“You don't have to do this all by yourself. Now more than ever, when you're making these decisions in an uncertain market, I think it feels terrific to feel supported, and know that people are aligned in the [financing] strategies you want to pursue.”
“One of the important things in a hard market is the importance of knowing how you yourself are going to make it if all these other sources just don't want to work with you and have nothing to do with you as a person. It's just you no longer meet their algorithms or criteria.”
Our second conversation with Keith focused on the action items associated with earning financing for CPG brands. He answered the question; you understand the options out there, now what?
Keith reminds business owners that understanding their credit score, keeping their finances dialed in, making sure they are filing taxes and understanding what is on their credit and background report ahead of time is best. Knowing what to get ahead of when speaking to a lender will set them up for success.
“I'll say it again; the proactive person really has the best chance of getting the best result, the fastest result, and the most variety of financing available to them.”
If you are experiencing growth and moving forward toward your revenue goals, your taxes should also show this journey. Keith still sees a lot of discrepancies with founders not wanting to pay taxes, yet needing to show the revenue of their business in its true form to earn funding. Being misaligned can make it extremely difficult to earn financing when you need it.
“A very classic example is all too often I see a founder saying, ‘Hey, I'm still all about growth.’ And yet, what did they tell their tax preparer? ‘Well, I don't want to pay any taxes’. Right? And then you get this quandary of how can you support growth, if you're not going to even report what you're really making or even maximize your opportunities by what proper showing a lot of profitability can do for you. So I still find that there's often misalignment by even founders going to war with themselves about what they might want to achieve, versus the way they historically have done things, particularly if for the first time they're experiencing growth, or they see good opportunities. And I also see misalignment even internally on finance teams, right?”
Bryan Gerber is known as “The King of Cones'' because he is the largest supplier of Hemp related products in the USA. It all started from an idea, some drive, and a solid foundation of business and accounting knowledge. He shares his insight and various marketing strategies used, like subscriptions, celebrity endorsements and ways he tackles selling a regulated product to the average consumer at high volume.
“You know, I think there's something to be said about having a vision, but being so militant on it can put you out of business."
"In your early days, you need to remain as flexible as possible. Pivot five times; who cares, right? You're gonna figure it out but if you stay on this one path and that one vision and you can't hear other people's opinions or thoughts, it's not going to go well for you.”
“Don't over purchase products. Don't tie up your cash in inventory yet, right? I know everyone thinks that they've got a winner on their hands. Do five tests before you do five smaller runs. You know piecemeal, talk to your vendors, ask them for you know maybe a blanket ship schedule, quarterly shipments, don't lose your business because you throw all your money into inventory.”
Eran knows that one of the biggest challenges food and beverage brands face is finding a consistent, reliable and high quality supply of the ingredients they use to create their products. Consumers that require specialty ingredients that are free of allergens, or certified organic, or sustainable rely on these CPG brands to be there for their dietary needs. Eran sources these ingredients and offers a reliable, transparent process for founders. In the episode he talks about not only the foundational business challenges, but financial tidbits all business owners can benefit from.
“I think the biggest ‘do’ was just come in every day, make my list, understand the things that I need to push for.
"As long as you're pushing forward and your prioritization is correct, or like, roughly correct, I think you will start to see results, right?"
I think as soon as you start to find yourself in a situation where you're constantly challenging the priorities of what you should be doing, instead of just doing, I think, then you're not learning and you're not moving forward. And that can, that can definitely hurt you as a founder.”
“Before you say yes, do a quick analysis of what this could mean for your business and your resource allocation. I think with resource allocation planning is—no one does it—it’s a simple spreadsheet, and just be realistic. And I always see it; I see with myself, I see it with Aalap my partner, and I just, we always try and say yes to more things than we can do. And that's great in theory, but it doesn't move things forward.”
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Look at all of that insight, and that’s only two questions highlighted from a few episodes! Make sure to check out our podcast page and subscribe to your favorite streaming channel. We also share each episode on our YouTube page, if a video is more your style.
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