Do you ever wonder if you’re selling your products at the right price? If you have ever Googled what your target profit margin should be, you have probably realized that those figures have been calculated for restaurants and not necessarily “good” food businesses. Not only do good food businesses undervalue their products, but they also miscalculate the true cost of labor and often find themselves struggling to turn a profit. Today’s guest, Sarah Delevan, understands all too well that more sales don’t necessarily equal more profits (or any profits at all). Sarah, also known as The Good Food CFO, is a food business financial consultant, Fractional CFO, Founder of Sarah Delevan Consulting, and the host of The Good Food CFO Podcast. As someone who has been a food business owner herself and has made a career helping food businesses make more money, she shares some of her wisdom with us on all things financial. We discuss the different ways people come up with prices for their products, why people underprice their food, why people miscalculate the true cost of labor and the difference between a profitable product and a financially sustainable business. To hear about Sarah’s ‘finding your financial success’ formula and how to create a profit plan to achieve not just financial sustainability but also profitability in your food business, tune in today!
Get to Know Sarah:
Name: Sarah Delevan
Location: Los Angeles, CA
Years in the food industry: 11
Favorite Food: Israeli Meze with warm Mountain Bread – the colors and flavors of all the dishes, and the many combinations that you can create… I love it!
Least Favorite Food: Coconut
The last thing I ate and loved: I had Mole Verde con Pollo for the first time and love it. It was made by a good friend and he shared some special New Mexico peppers with us so that we can make it for friends as well when dinner parties are allowed again!
Key Points Mentioned in this Episode:
Get to know Sarah Delevan and what her company, Sarah Delevan Consulting does.
What a fractional CFO is and why food brands and other smaller businesses may need one.
Some background into Sarah’s six-year journey from food business owner to food business financial consultant.
What she learned from her pop-up business: more sales don’t equal more (or any) profits!
Her second big lesson: Google’s answer to your target profit margins is very inaccurate.
Why people underprice their food and how good food business owners need to change their perspectives on the value of their products.
Hear about the different ways people come up with prices for their products.
The importance of considering the labor costs for the business as opposed to just the labor costs for each product.
How Sarah’s company creates profit plans in order to achieve financial sustainability and profitability.
Sarah shares her ‘finding your financial success’ formula.
Her thoughts on the book, Profit First by Mike Michalowicz.
Some of the different CFO consulting services Sarah’s company offers.
The impact of the pandemic on Sarah’s company and her clients’ businesses.
Thoughts on how to sustain a business’s new revenue channels created during the pandemic as the rest of the business returns to how it was before.
Learn about the future plans for Sarah’s company.
How to get comfortable with charging a price that’s fair for your products.
Links Mentioned in this Episode:
Click Here for Full Transcript:
[0:00:00] Sarah Delevan:
Some things, some pivots, some changes proved to some people, “Hey, we don’t have to kill ourselves to earn a living,” right? That was one positive that I could see that came out of this whole experience and then, on the other side, is the business model we had before is the right one for us, so let’s get back to doing business that way.
[0:00:22.1] Georgiana Dearing:
Welcome to The Virginia Foodie Podcast. Where we lift the lid on the craft food industry and tell the stories behind that good food, good people, and good brands that you know and love. If you’ve ever come across a yummy food brand and wondered, “How do they do that? How did they turn that recipe into a successful business?” Then we’ve got some stories for you.
[0:00:48.7] Georgiana Dearing:
Hey there foodies, how comfortable are you with the money conversation? Do you ever wonder if you’re selling your products at the right price? I’m asked about pricing a lot and, while I absolutely know how to help you communicate what your brand is worth, I’m not qualified to evaluate what you, in particular, should be charging for your products.
How a brand determines the retail price is different for every single product. Even within the same category, the price can vary wildly. The Specialty Food Association shares an example of mustard pricing that spans from budget brands at $1 per unit, all the way to a luxury brand priced at $22 per unit. There is a bunch of reasons why a product is priced the way it is and that’s why I’m so happy to have met Sarah Delevan.
Like me, Sarah is a consultant to the food industry but she calls herself ‘the Food Business CFO’. She is the chief financial officer you wish you had on your team. I love what she says on her website, “I help food businesses make more money.” Listen in and you might see yourself in our conversation today as we talk about some of the common challenges for small food brands who are trying to grow their business and stay profitable at the same time.
[0:02:21.3] Georgiana Dearing:
In my work with craft food brands, I get asked a lot of money questions that I don’t always feel qualified to answer. That’s why I’m excited to dive into the money conversation today with The Good Food CFO, Sarah Delevan. Sarah, hello and welcome to the podcast.
[0:02:37.4] Sarah Delevan:
Hey, Georgiana. Thank you so much for having me.
[0:02:39.8] Georgiana Dearing:
Yes, I’m happy you're here. Can you take a minute and introduce yourself to our audience?
[0:02:44.2] Sarah Delevan:
Of course. My name is Sarah Delevan. I am a food business financial consultant and fractional CFO. I am the Founder of Sarah Delevan Consulting and, as you mentioned, the host of The Good Food CFO Podcast.
[0:02:59.6] Georgiana Dearing:
Fractional CFO, could you explain that just a second for me?
[0:03:04.1] Sarah Delevan:
Of course. Many businesses have CFOs so chief financial officer and for many businesses, that’s a full-time position. For food brands and other smaller businesses who need financial help but don’t have the budget for a full-timed salaried CFO position can hire someone like me who is called a ‘fractional CFO’ and essentially just means part-time CFO.
[0:03:28.4] Georgiana Dearing:
Okay, you're part of the team but you’re not a full-time equivalent.
[0:03:32.1] Sarah Delevan:
Exactly, yeah. The work looks a little bit different for every client that we work with but it’s more of a hands on, roll up your sleeves, help do the work kind of role as supposed to just a consulting strategy kind of role.
[0:03:46.2] Georgiana Dearing:
How did you end up doing this financial consultation for food brands?
[0:03:51.2] Sarah Delevan:
How much time do we have?
[0:03:53.6] Georgiana Dearing:
Maybe you have a cliff notes version?
[0:03:56.0] Sarah Delevan:
I totally do. I’ll frame it this way and say that it was six-year journey from food business owner myself to food business financial consultant and the cliff notes are that, as a co-owner of a food business who from the outside looked very successful, right?
We had a beautiful business, literally, the food was beautiful, we were supporting an amazing mission, which was helping local farmers and ranchers and fishermen and artisans, right? We had clients who loved what we were doing and came back to buy from us week after week after week. No matter how much we sold and how hard we tried to grow the business, the financials just weren’t working out, right? We weren’t literally paying ourselves, I think it was $100 a week and whatever leftover groceries there were. I had a stocked fridge all the time but my bank account wasn’t looking so pretty.
We closed that business and I went on and became a buyer for a large catering company in Los Angeles who needed to help sort of walking the walk, right? They had done the work, sort of set-up sustainable practices in their business but they needed someone to really help cement it in place and during my time there and then over the next few years, having had my experience as a good food business owner myself, I became keenly aware of what wasn’t working for these types of businesses, right?
Googling “what should my food cost be?” and then trying to implement that number, 30 percent, or whatever it is, into a small, sustainable, good food business that just wasn’t working. Becoming hyper aware of all of these amazing businesses and brands that were trying to do things differently but were failing, not for a lack of an amazing product and not for a lack of – just working their tushes off, but because the numbers weren’t working out.
I found myself six years after owning my own business, available, kind of without a position and people just started asking me to consult, so I was doing initially a little bit of food sourcing because I was known as a buyer and as people learned about my experience, kind of digging into the numbers and helping the businesses I had worked for become financially sustainable, my work slowly but surely started to shift. I really finally owned the fact that I am a numbers nerd, an Excel nerd and that this is really where my passions lie in I think it was 2018 and so that’s when I officially started calling myself a consultant at that point.
[0:06:24.5] Georgiana Dearing:
Well, I’ve listened to some of your discussions and I wondered, could you talk a little bit about the two big lessons that you took away from that pop-up business?
[0:06:32.7] Sarah Delevan:
Sure. Gosh, so many lessons but for sure, the two biggest are number one, more sales doesn’t equal more profits or profits at all, right? In every case. This idea that many of us have, “If I just sell more, if I could just find more customers, everything will be okay,” I think it’s a sort of a misguided belief that I learned the hard way in that popup business.
Then, the other big lesson is that you can hit all the right numbers in your business. As I mentioned before, if you Google, “What should my food cost be or what should my target profit margin be for my business?” you’re going to get answers but those numbers are, number one, designed for restaurants. That’s what Google defines as a ‘food business’, not a CPG brand or a meal delivery business and on top of that, these are sort of old industry standards that are designed for high volume, low margin businesses, right? That’s not what good food businesses are.
I again, sort of learned that the hard way but once I stepped foot into the catering business and can sort of step back from that owner role and was more of a supporting purchasing and financial person, I was in that role, I could really see, “Hold on a second, I’m hitting the targets that my boss is asking me to hit but at the end of the day, we’re not comfortable financially, we’re not paying the distributors or paying the team even without stress. What can we do? Because clearly, these targets aren’t the right targets for us. How do we find out what is and then how do we go about hitting those?”
It’s sort of a lesson that I understood during the popup but then really dug into and kind of figured out how can we fix this and how can we do better in the work I did, in the following years before becoming a consultant.
[0:08:34.1] Georgiana Dearing:
That’s really interesting when you talk about more sales equals more profit because my business, in the creative side is a different industry but we actually went through that same cycle where we were doing more and more work and it was costing us more and more to produce that work and you have to go, “Oh wait a minute, something’s broken here” and you have to back track and solve that.
I thought that was really interesting when you said that. The other thing I think is when you speak about good food brands, they’re not mass-market brands and you know, I always say to my clients, “You’re in the specialty food industry, you’re special, you’re not mass market, you're not competing the same way, you’re providing something different.”
One of the things I see, at least from my point of view, is I think they’re underpricing quite a bit. A lot of these smaller brands starts small in they are cautious about that in retail price and my other suspicion is that they undervalue their labor. They’re afraid to price too high, they undervalue their labor and there’s a point where the ingredient cost for small production runs actually cost more than if you were buying in bigger bulk but maybe you could speak to some of these because you have bought ingredients.
[0:10:00.3] Sarah Delevan:
Yeah, I’ll start touching on something you said about the price just in general, being hesitant about pricing too high. I think something important to remember as we continue our discussion right now is that in America, and this is a bigger discussion, the food that we are used to buying in grocery stores is kind of inappropriately underpriced, right? Chicken for 99 cents a pound, it actually isn’t being produced for that amount and if it is, think about how the people are being paid, right? All along that food chain.
I had a discussion recently with an HR professional who said, as small business owners, we sometimes get accidentally start to recreate the corporate businesses that we left because we think, “That’s the way it’s done, that’s the way we need to do it if we’re growing and scaling,” and I had an “Aha!” moment where I thought, as good food business owners, we are trying to change the food industry. If that is the case, we have to stop thinking that we too are part of the low-margin high-volume game and we have to stop I think trying to compete on price with products that are not the same as ours, right? That are not specialty, that are more kind of commodity and mainstream.
[0:11:24.7] Georgiana Dearing:
Right. I’ve had this thought as well that I’m voicing it publicly probably for the first time but I thought, part of my mission is that we have to stop thinking about food as cheap as it has been, you know? It should cost, if we’re going to have healthy wages all the way down the line then we have to start thinking about the cost of all those, all of those people that go into making a product.
[0:11:52.2] Sarah Delevan:
Yeah, I think it’s part of a bigger conversation, right? I’m not knowledgeable enough to have necessarily and, certainly this isn’t the place for it, but want to acknowledge that and I think yes, the price of food, I think just from the business owner perspective, we have to keep these things in mind. With that, I think you’re right.
Number one, I kind of want to touch on some issues or ways that food business owners go about pricing their products and they do this with the best intentions but again, it’s like a little bit misguided. That is using a standard formula for pricing. They think, “Okay, well these are my costs and so I’m going to just multiply by two or multiply by three and that’s how I come up with my price.”
Again, if you go to Google, people are going to tell you, certain resources will say, “That’s how you do it.” Other people price with their gut and that’s something I think you are kind of hinting at, right? You compare to what’s on the retail shelf maybe and you price according to the competition and not necessarily what’s really happening inside of your business or you say to yourself, “What would I pay for this?” or you ask your friends. “What would you pay for this product?” Right?
I had a chef that I worked for who would bring around his beautiful food and say, “How much would you pay for this” right? Before I knew better. I would give him my opinion. It’s just not helpful for us to price that way, I’ll touch on again to the labor. You’re absolutely right.
Another thing that we’re taught which is sort of one of those – what I refer to as “old school” or maybe just not the right strategy for a sustainable good food business is that we incorporate the labor to produce our product into the price of the product. When we do that, a couple of things can happen. One is that we say, “Okay, this is the exact amount of time that it takes to make one unit” right? That’s not encompassing all of the labor, time and money, that you're going to be incurring in your business, right? When you think about it, people don’t just magically show up to the kitchen and everything they need is laid out for them and someone else cleans it up for free, right?
There’s time to actually produce the product and then there’s time to set-up, there’s time to clean up, there’s time to package your product maybe to get to where it needs to go, who is doing the ordering, just so many things that go into the business.
What we talk about is, number one, yes, definitely understand how much time it takes to produce your product, there’s a ton of value in that that I won’t get into right now but in addition to that, think about all of the other activities that take time in your business.
When we think about pricing our products, what I like to do is take a more wholistic approach and say okay, “I need to have one team member” let’s say, for example. In order to do all of the work associated with producing 100 units of my product, right? Maybe that’s a run. How much time is that going to take from start to finish, right?
It may take two hours to actually produce the product, it may take an hour on either end of the production time to really complete all of the work. What is that labor time? To think about it that way, you can think about, “Okay, what are the labor costs for my business as apposed to what are my labor cost for my product?”
What that does is allows you to say, “Okay, here’s my labor is X and my operating cost that I know are X.” Now, I also know my ingredient cost and my packaging cost, and together, all together, you can say, “Based on this cost information, how do I need to price my product in order to have not only a profitable product, meaning, I got a positive gross profit number, but also a financially sustainable business so I’m breaking even or I’m making money on the profit line?
[0:15:53.0] Georgiana Dearing:
Right. I see that and I see a lot when you talk about all the setup and then breakdown and I see people struggling with trying to figure out really, “How do I add that value?” I like the holistic approach that you have.
[0:16:09.9] Sarah Delevan:
Thank you, it’s some things that I think came over time, right? Testing it out with businesses that I worked for as an employee and saying, “Okay, well, it takes this amount of time,” but when you get to the end of the month and you look at the PNI and you go, “Oh, well our labor calculations were off. We spent more money than we thought we did” and then investigating why did that happen. We didn’t account for this additional time that goes into supporting the business and the production of the product.
It’s a lot of what I do and what I try to teach is a new way of looking at and thinking about your business because again, you’re not a corporation, right? You don’t have people who show up to a manufacturing line and do a job for a certain set of time and then leave, right? In small businesses, all of us do many jobs and we kind of can take more time than we realize.
[0:17:05.8] Georgiana Dearing:
Yeah, I mean, in a large corporation, there’s just the person who is keeping the machines running for you, right? That’s all they do is make sure that nothing is – there’s no downtime. Okay, well, that gets folded into there somewhere.
[0:17:22.3] Sarah Delevan:
[0:17:24.1] Georgiana Dearing:
Are there other typical issues that you see for small brands when it comes to sorting out pricing?
[0:17:31.0] Sarah Delevan:
I think I covered the primary ones, the using a standard formula or what’s considered a standard formula pricing with your gut. I had a really great conversation with Ali Ball and I think she said during the conversation, it’s on our podcast, she was like, “It is not our job to determine what other people are willing to pay for our product, right? It’s our job to determine what the appropriate price is based on the values of our business and the financials of our business,” right?
If we are wanting to pay our farmers and wanting those farmers to pay their employees a fair wage and we want to do the same for ourselves and for our employees, we’ve got to be honest with that looks like and that should translate all the way to the price of your product and I fully believe that. I think there is a lot of mindset work that business owners need to do around their finances and I say that even in my consulting role.
My very first consulting job, I did food sourcing for a Michelin starred chef and I charged her $25 an hour for my time. Because I thought, well, in my old job I got paid X salary and that would break down to this amount of money per hour and so then that’s just what I charged her and it was like, I was thankful for the opportunity, obviously, and it was a great experience, but looking back in hindsight, it’s like, there was no way that I could ever build a sustainable business for myself, charging someone that much money, right? We all go thought it.
[0:19:07.3] Georgiana Dearing:
When you work for yourself, you're not consulting 40 hours a week, right? You’re doing all the other things and that I mean, in my creative business, we worked with a consultant who specializes in our industry and only really only 60% of our work time could be directly related to working for a client. The rest of it is training and marketing ourselves and all of the other stuff that takes to keep us there to answer the phone when they say, “I need it now.”
[0:19:40.0] Sarah Delevan:
Yeah. I share that story and I’m sure you’re sharing yours as well because just to say it’s not exclusively happening for food business owners, it happens I think for entrepreneurs of all types and so doing the mindset work and really getting comfortable with charging a price that’s really fair for your products so that you can earn a living from your business if that is what you want to do, right? That we want to support that.
[0:20:09.9] Georgiana Dearing:
Yeah, that education kind of goes both ways, right? You know, the value of the services that you’re hiring and the value of their own time. Yeah, we could do a lot just on that topic alone.
One of the things I see in these small businesses is they’re running their financials like a checkbook. If I have it in the bank, then I can spend it and I wondered if you had ways that you talked to businesses about sort of their spending budget and their planning budget.
[0:20:39.1] Sarah Delevan:
There two parts of that for us, so I love that you say they treat their business like a checkbook. That is human habit, it’s either feast or famine sort of and if there’s a lot of money there, we think, “Okay, we’re going to pay down that debt or we’re going to pay this bill that’s upon us” and we think, “Okay, we’re doing the right thing. We are taking care of things in the business” and then what happens sometimes when we do that is we haven’t looked to the future to say, “Oh, we are in a seasonal slump and now the money isn’t coming in like it was a couple of months ago,” but we went ahead and spent that money and so now we were struggling, right?
That happens, it happens in food businesses, it happens in consulting businesses, it happens in all types of businesses, so we do two things: One is we work with food business owners to create what we call a profit plan. We are really looking at their business, we’re looking at their revenue projections, we’re looking at their cost of goods sold and what those projections are for the next 12 months as well as operating and labor cost and we utilize that tool, number one, to understand where the money goes in the business generally and number two to say, “Is my business as financially efficient as possible?”
In other words, as I sell more am I going to make more profits? Is that money going to land on my bottom line or am I going to be spending more to sell more and have a wash at the end of the month? We do the profit plan to understand the numbers, to understand the business and to achieve financial sustainability and then eventually, profitability but having a plan only gets you so far, right? You can have a plan and then go spend all of that money elsewhere.
This is kind of a funny story but over the past two years, people have been reaching out to me saying, “Do your philosophies and what you teach align with Profit First?” and I would say, “There’s some similarities but I don’t teach that” and I can’t remember my exact response but I’ve never read the book and it sounded great, but I didn’t really know anything about it and so I would just answer their question and then move on.
After the tenth person reached out to ask if my business taught strategies that align with Profit First, I thought I have got to read this book and so I read the book over the holiday, you know, December to January. We always take two weeks off, my husband and I read the book and I thought, “Goodness, why have I not read this book sooner?” This is, number one, it helps you overcome that human habit of, “There’s money in my bank account. I can or I should spend it in certain places” but not only that, it correlated with our profit plan and the strategy that I teach, which is called ‘finding your financial success formula’.
Which just really quickly I’ll say it’s understanding, what’s my target costs of goods sold? What’s my target operating and what’s my target labor cost as a percentage of revenue? That if I hit those targets consistently, I will have a consistent financial outcome in my business. That is sort of core to a lot of the work that we do and Profit First is saying, your budget should be broken down by percentage and you should be allocating it that way and spending accordingly.
It took the plan that I had been building and working with, with my clients and program members and then literally created that next step for us to say, “This is how we actually implement the cash flow management system.” After reading the book, I reached out to them, I found out that they have a certification program and I am going through that certification process because I think it’s a natural extension of the services that I currently provide and the tools and information that I currently provide to say, “Okay, here’s the plan for me and the strategy for making your business better. Here is an actual tool that you can utilize it. A system that will help you implement that day to day.”
That’s sort of the two things that we do internally to help folks budget but then actually implement that budget successfully.
[0:24:41.8] Georgiana Dearing:
Well, I’ve read that book, so I am going to be really curious and come back to you when you go through this certification because I am going to have questions I’ll tell you that.
[0:24:51.6] Sarah Delevan:
Okay, yeah and I will say this too. The book is just the – like tip of the iceberg and one of the big challenges that I had for them when first reaching out was they had these things called ‘taps’, which are like if you’re making a certain amount of money, your money should be allocated in this way and I was like, “This won’t work for a food business.” This is not designed for a food business, these allocations are – that’s not going to work.
I challenged them on that in our first meeting and they said, “You’re the expert in the food industry, you determine what is appropriate so you can still use the strategy but make it make sense for the food industry specifically, the good food industry that you are working with” and I thought, “Okay, challenge accepted. I’m ready” yeah.
[0:25:37.9] Georgiana Dearing:
All right, well I’ll circle back to you because I am curious about that a lot. Who are your best clients? We’ve talked a lot about the things that you’re doing but what does your best candidate for your CFO services look like?
[0:25:57.0] Sarah Delevan:
The CFO services are the high end service, right?
[0:26:00.6] Georgiana Dearing:
[0:26:01.0] Sarah Delevan:
They’re the most expensive service that we offer because it’s quite hands-on. We’ve got a standard, what we call the standard CFO consulting service, which is we create a financial plan for you. We do an in-depth financial analysis, we create a strategy but then we meet once a month and so, there’s hands-on guidance, there’s a little bit of hands-on work but it’s at a slightly lower cost and it’s more of like a CFO coaching or CFO consulting kind of service.
The more high level, which we call customized CFO services are we’re meeting every other week or every week. We are working with your bookkeeper one-on-one. We are digging into pricing, we are digging into recipe costing. I am digging into all of those things with you. All of the clients and program members that we work with sort of the umbrella is you’re a good food business, meaning you have intentions that are clear and you mean to purchase ingredients from farmers or providers who are offering sustainable, regenerative growing and like sea food and on all of those things, right?
You are supporting those kinds of businesses, you are supporting farmers and ranchers and artisans that are paying their employees fairly, right? All of the things that are sort of considered a good food or mission driven business, that’s who we want to work with because the mission of Sarah Delevan Consulting is to change our food industry and we’re going to do it one profitable food business at a time. That means whether you are in a financial position within your company to pay for those sort of higher cost CFO services or not, there’s an opportunity for you to learn, get support and achieve financial sustainability in your business.
I’ll just mention the alternative to the hands-on CFO consulting is the online program that we offer, which is much more approachable financially but still offers weekly check-ins with me in a group format and an online course element that helps you to do your own financial analysis and create your own profit plan with videos to guide you and then need to support you personally during group coaching calls.
We want to help people no matter where they are on the financial spectrum because, at the end of the day, whether you’re bootstrapping or you’ve got investments, if you’ve got a great product that can really help people and change our food system, we want to support you.
[0:28:27.6] Georgiana Dearing:
Well, thank you for that explanation. I think a lot of our listeners are going to see themselves in some of that but we’re talking right now in the spring of 2021 and we’re hopefully seeing our way out of the pandemic in the near future, and I’ve been asking all of my guests, the food industry really took some big hits in the last year and I was wondering how that impacted your clients and in your business.
[0:28:54.4] Sarah Delevan:
We work with food and beverage business owners but to really clarify that a little bit more, we don’t work with restaurants and I know restaurants obviously in the news and we’re really experiencing a lot of tough times, we work with CPG brands, you know, delivery businesses, catering companies and sort of like café size or like grab-and-go style restaurants, if you will. As a result, thinking back to March of 2020 it was just such an emotional rollercoaster for the businesses but also internally for our team because we would have a phone call with one of our catering clients, you know, the conversation would be, “We’ve lost all of our business for the foreseeable future.”
[0:29:39.4] Georgiana Dearing:
[0:29:40.0] Sarah Delevan:
“We have a little bit of money in the bank and we want to take care of our staff” and the number crunching that we were doing at that point is, “How far can we get with the money that we have and how much money do we need to ask for to be able to survive this?” and in the beginning, we were thinking six months, right? Or we were thinking and that just then became longer and longer.
[0:29:57.8] Georgiana Dearing:
[0:29:58.4] Sarah Delevan:
On the flip side, you know, I would have a meeting thirty minutes later with the CPG brand who had a decent regional business who was now exploding in terms of sales and growth because the distribution channels were sort of mucked up and because they were regional and they were distributing on their own, they could get their product onto the shelves of those retail stores and the retail stores needed product.
We were seeing just a complete loss of revenue and an unsureness of what was going to happen with certain businesses and then just incredible growth in the sales side for other businesses and so our work there was, “How do we manage this? How do we not lose money in this growth phase, right?” Then in between, there was the people who lost their business as they knew it and needed to pivot and wanted to do that in a sustainable way but quickly.
It was really – we were kind of all over the place and it was crazy but I’ll say on the bright side, that’s where the notion to not just offer one-on-one services came from because it became very clear that people are going to need help and they weren’t going to have $375 a month or $800 a month to get one-on-one service and so how could we be there for our industry that we wanted to support in a meaningful way without having to cost a lot of money.
[0:31:34.6] Georgiana Dearing:
Yeah and I imagine now as we’re sort of they speak of life coming back to normal but I think work in business in general has got some pretty big changes but for the food industry, I imagine that you’re going to be spending some energy in “What do we keep and what do we discard from this transitional period where we were sort of like, let’s get something done.”
[0:32:00.9] Sarah Delevan:
Yeah. There was a huge shift to online for a lot of businesses that never sold online before. In some cases, that worked out well and in other cases, free shipping offers that weren’t really considered thoroughly resulted in really big loses for people and so it sort of lessons learned the hard way but you’re absolutely right, some things, some pivots, some changes proved to some people, “Hey, we don’t have to kill ourselves to earn a living” right?
That was one positive that I could see that came out of this whole experience and then on the other side is like you know, the business model that we had before is the right one for us and so let’s get back to doing business that way.
[0:32:45.2] Georgiana Dearing:
One thing I saw with some of our package good clients is there was a lot of goodwill purchasing being made online particularly brands that do a lot of work at farmer’s markets or these in-person events and so there was a lot of goodwill spending happening from their client community and now they’re like, “How do we keep this online arm as health as it has been” and then augment it with other channels of income and that’s something they were really working on and doing a lot of analysis of like, “Okay, where do these people come from” or part of the problem is breaks and record keeping.
You may have been doing online sales differently and it wasn’t functioning, so you quick set-up a new site and you’ve lost some of that connection and the data.
[0:33:36.4] Sarah Delevan:
It’s so interesting that you bring that up and I would like to hear back about what you learned as you do that analysis because I am thinking of one brand in particular but like their farmer’s market sales for example shifted online and so they have this amazing online revenue and things are going great and then slowly overtime, it just started to trickle away and not all of that business transferred back to the farmer’s market, so then some of that business was coming from somewhere else. There was a point for that business in particular where like, “How do we project our revenues for this year going forward?”
[0:34:15.8] Georgiana Dearing:
We are actually doing transactional analysis. We’re trying to correlate these sales and looking at multi-unit sales versus like maybe there was somebody who bought one or two in the past and the pandemic hit and they were like, “I don’t know when we’re getting out and I really like this brand and I want them to survive, so I am going to buy six instead of two” you know? Which means, depending on your shelf life, they don’t need any more now.
[0:34:42.1] Sarah Delevan:
Yeah, oh fascinating.
[0:34:44.1] Georgiana Dearing:
Yeah, so we’re doing some of that work right now and just because we’re trying to help them have a plan forward like let’s keep the good stuff that happened and then you know, augment it and have a more realistic expectation for online growth.
[0:35:00.4] Sarah Delevan:
[0:35:01.0] Georgiana Dearing:
Well now, we just got really nerdy and business-y.
[0:35:05.1] Sarah Delevan:
We can’t help it.
[0:35:07.1] Georgiana Dearing:
What else is on the horizon for you? Is there anything new coming or is it just maintaining?
[0:35:12.1] Sarah Delevan:
Oh, always something new I think. We especially over the last year really, the priority in 2020 was understanding what business owners need from us and as I mentioned a moment ago, that meant the existence of our online program to meet a need and we recently through dialoging with folks, we realize that there was a gap, so we have these one-on-ones for CFO level services and then we have this online program but there’s a gap and in that gap are folks who don’t have the budget to afford the level of one-on-one help that they want.
They also don’t have the time to devote to the online program and so we talked to those folks who were kind enough to give us the feedback and say, “Neither of services work for us” and at first I was like, “What do you mean? We thought we covered all of our bases” but what they said was, “You know, we have a bookkeeper and we have a CPA and is there anything you can do to just give us your food industry expertise and guidance so that we can do it internally but not through the program.”
After some internal discussion and really thinking about it, we’re offering a new service that we hope will fill that gap, which we’re calling the CFO financial assessment. We’ll do a 12-month financial analysis for you. We will dig into your goals that you have for your business and create a strategy for you like what are the top three strategies that you as a business owner and your bookkeeper can start to implement to get your business going in the right direction and for some people, that’s first and foremost getting their books set up right.
It’s really important, so you can get a customized plan of what needs to be change in your books and how you can start seeing your numbers in a more user-friendly way, right? Then also, if we identify your food costs are too high or your labor costs are too high, we can inform you about that and kind of set you in the right direction, that’s the intention, to set you in the right direction so that you can go about implementing and I am excited about it and I think it will fill that gap for those who need direction but have a team who can go about implementing at once, once they have it.
That’s what’s kind of most new and exciting for us but I think too, we’re just always wanting to innovate and make our tools better and make our services better and that’s exciting. I am excited to keep going.
[0:37:41.5] Georgiana Dearing:
That sounds great. It sounds like you’ve really been responsive to your community and adapting what you’re doing, that’s just I love to hear those kinds of stories. It is not a one-size-fits-all, that’s great. Before we close, can you tell our listeners how to find you, how to get information about your programs?
[0:38:03.2] Sarah Delevan:
Definitely, so you can visit sarahdelevan.com or thegoodfoodcfo.com. All of our services are listed on the website, you can get to them from the homepage or the work with me page and if you want to connect, you can definitely find me on Instagram. I love that social media platform. My name there is @sarah.delevan.consulting and then last but not the least, we have a free community. We host it on Mighty Networks and we do a live Q&A session every month.
The first Tuesday of every month, we do a live Q&A and we have a theme for the month, so as we’re talking right now, we’re kind of heading into May and our theme is going to be cost of goods sold because so many people have some questions surrounding cost, so we are tackling that but every month we have a new topic to tackle there and I think again, it’s just a resource to try to meet people where they’re at and that’s a big part of what we want to do.
[0:39:00.1] Georgiana Dearing:
That’s a great resource. I am sure a lot of people are going to take you up on that one.
[0:39:03.8] Sarah Delevan:
We love it. I love spending time in that community.
[0:39:06.6] Georgiana Dearing:
Well, thank you so much for sharing your story with me today. I find it really fascinating and I think that you’re providing a service that I know a lot of my clients actually need and I can’t provide because I don’t have the kind of background that you have, so I am so glad to make the connection and talk to you.
[0:39:22.5] Sarah Delevan:
Thank you, me as well. This has been an absolute pleasure. I feel like I could talk to you for hours but thank you so much for having me.
[0:39:29.6] Georgiana Dearing:
Thank you. Bye-bye.
[0:39:31.9] Georgiana Dearing:
Thanks for listening and if you want to learn more about how to grow your own food brand, then click on “grow my brand” at vafoodie.com. If you’re a lover of local food, then be sure to follow us. We are @vafoodie on Instagram, Facebook and Twitter. Join the conversation and tell us about your adventures with good food, good people and good brands.