Category Archives: Business Planning

Food For Thought: A Workshop for Food and Drink Businesses

Plans for the Food For Thought workshop are coming together now, and its looking exciting.

I’ve lined up great speakers to join me, and together we will address:
* pinpointing what your customers value,
* which products or customers are worth most to you
* getting noticed by the right customers

All building towards making sure sales growth in 2018 brings profit growth at the same time.

The idea behind the workshop was the number of businesses whom I have met with in the last 5 years who have got themselves into trouble because they put all their effort into getting more sales when what they really wanted was more profit.

If you sell more than one product, to more than one customer I would be prepared to bet that some of the sales are super profitable, but some only just cover their costs.

That’s usually unavoidable, but the key thing is to make sure YOU have made a decision to make the not so profitable sale instead of just being led by what the customer wants.

Selling what the customer wants is not guaranteed to make profit for your business. However, direct profit isn’t the only factor to consider; there’s also issues like keeping customers happy, spreading delivery costs, and establishing a reputation to allow you to develop other products. The challenge was illustrated quite nicely by a business that I met with last month:

The have two product lines which sell well, in large quantities, and are profitable. They have another product (product C) which sells in smaller volumes, is not profitable and causes lots of problems for their factory because they need different processes and different ingredients.

From a finance perspective product C is a disaster and should be discontinued as soon as possible and the factory manager would agree wholeheartedly with this.

However there are other things to consider; the customers who do buy the product love it and the retailers who stock it can’t get enough. Also, competitors who make either one or both of the profitable lines don’t make product C so retailers will not move away from this business while they offer something that no-one else does.

So, from the sales and marketing team’s perspective the business should sell more of this product, even though it is not profitable!

The solution here is to have enough information to know that some sales of product C is good, but more isn’t necessarily better. And a balance between the perspectives of sales, marketing, operations and finance is essential to success.

On the day I will be joined by:

The workshop is at The Cedars Inn in Barnstaple on 27th February from 9.30am to 1.30pm.
Tickets are £30 (inc VAT) until the end of January and can be booked here

Food For Thought: A Workshop for Food and Drink Businesses

Too many businesses that I have met with in the last 6 years have defined their success based on their turnover; how many packs or litres they can sell, but most of all how much money they take in sales.

This is all very well, but at the end of the day does this really matter? More sales doesn’t necessarily mean more profit, and it is profit that brings in the cash to pay the bills!

So why is it that businesses keep measuring success in terms of sales? Well, its easy to measure for a start. And it’s easy to do things to get more sales too, much easier than it is to work out how much profit you make and how to increase that.

It is true of course that without sales you won’t get any profit, but there is a balance:

What if some of you sales are more profitable than others? If you grow the wrong sales your hard work may actually reduce the profit you can earn.
What if you reduce the price in order to sell more but the extra sales don’t give you enough profit to replace the money you gave away?
What if you take on a new customer who looks profitable, but they need extra work (more packaging, an extra delivery, or additional admin) and that eats up the extra profit?

The way to make sure that you make the right decisions is to understand who your best customers are, what they value about your products and how much profit you make on what.

On 27th February 2018 I am hosting a workshop specifically tailored to Food & Drink Businesses, where we will discuss practical ways to target more of your best sales, focus on what your customers value, how to grow profitably and Brexit-proof your business.

The workshop will be held at The Cedars Inn in Barnstaple. Building on the success of the 2015 workshop it is designed to be a day of constructive and open discussion for all ambitious food and beverage producers.

Tickets are available at £30 per head (including VAT) until 31st January; click here to register.

For more details, or specific information call Susie on 07801 199671.