Today Lyndsay, Mark and I attended a Grow-talks event on lessons from scaling food businesses. Along with delicious samples from the speakers (and coffee from Reading’s own Tamp Culture) it was a fascinating insight into how businesses in the food industry can grow from literally using an airing cupboard as their stock room to being suppliers to major supermarkets.
The speakers, Nick Coleman, Founder & CEO, Snaffling Pig. Suzie Walker, Founder & Chief Fire Starter, The Primal Pantry, Joe Munns, MD, BakedIn and Kyle Turner, CEO & Co-founder, Fungry were refreshingly open and willing to share.
Interestingly some themes emerged about scaling. I made some notes that I know some of my clients and also students might find of interest:
- Cash flow unsurprisingly a common challenge and at different stages the companies had taken funding for working capital and expansion from sources ranging from credit cards, personal savings and business angels to loans.
- Invoice financing while ‘expensive’ was also recommended to enable expansion something that can happen extremely quickly in the food industry – winning a client like Tesco was quoted as going from 3 pallet to 60 pallet orders.
- There was agreement around the panel that however much finance you raise when going out to the market you probably need more.
- There was also an interesting focus that at least two of the businesses had on trying to increase their direct to consumer sales, partially for improved margins but also to shorten their working capital cycle.
- Similarly inventory management was something that had an impact on cash – the short life of food products (or in the case of Fungry the nature of restaurant preparation) being a push towards what an accountant would call Just in Time inventory management but the ability to get discounts in packaging leading to buying in bulk for other areas. Obviously something that requires a bit of modeling and thinking through.
- Recruitment of the right people and staff was also a huge issue, and in a tweet to me afterwards Suzie suggested that this could be an ideal topic for a future event.
Aside from really hoping Fungry expand into Reading soon and looking to place an order with Bakedin my biggest take away from it was a lesson that probably applies to truly any business:
Nick was clearly passionate about his product (as were all the speakers) and his advice was that if you have created a business and products that you love your best sales person is you. You know the business, have the passion and no-one else will be able to convey that vision to clients and potential clients in the same way.
His advice? “Whatever is stopping you, the founder, getting out and selling – find someone else to do it and delegate.”
Wise words, I am sure this is of the reasons our virtual finance team is winning clients who are planning to grow.