Do you have a clear financial picture of your business? Put another way: Are you getting your daily dose of FP&A)?  Financial Planning & Analysis, or FP&A, is the underpinning of decision-making as you navigate a blizzard of important choices.  Perhaps you have solid bookkeeping and maybe even a reasonable cadence of financial reporting, but robust FP&A unlocks key insights and without it you are flying blind.

Here are the key questions you need to be able to answer as you’re running your CPG Business:

Growing My Business

• Revenue Composition: What will be our composition of revenue (by channel, by product lines) in three years? In five years? Are these answers strategically compelling to the Founder and to investors present and future?
• Headcount planning: More revenue can fund a bigger team but we need a bigger team to grow the business – what do various scenarios look like from a cash flow / burn rate perspective? What size team do we need / can we afford as we grow?
• Product innovation / adjacencies: we’re doing well in our core market and should take advantage of obvious adjacencies: but which ones should we pursue first, second, and third? Which metrics of opportunity should guide us? How can we translate target addressable markets into potential sales for our brand?
• Product pricing: Are we priced too high? Too low? If we adjust prices, how might sales be affected (elasticity of demand)?

Making My Business (more) Profitable

• Gross Margin: Gross margins are often too low and need analysis on product pricing, discounts, product costs, freight-in and freight-out, and other variable costs. How can we raise gross margins? If Gross margins are up or down vs last year, how do I unpack the drivers (what contributed most vs least)?
• Margins by account: which customers are high margin for us, and which ones are draining us, and why?
• Product margins: which products are generating the most margin before, and after, variable marketing costs (contribution margin)? What drives some products to offer low contribution margin?
• Marketing budget allocation: which programs are most and least productive?

Channel Harmony vs Conflict

• Offline vs Online channels: is there pricing consistency or pricing conflict?
• Amazon vendor central vs Amazon seller central: should we make the move to Seller Central? if yes, how will we do it? What will our top line and bottom line look like as we go through the transition? What will be the inventory and cash flows impact before during and after?

Running a More Efficient Operation

• Raw material inventory planning (if we don’t have turn-key suppliers)
• Finished goods inventory planning
• 3PL efficiency or lack thereof

Pursuing Equity Funding

• How much to raise: What is the “right” amount of equity funding at this stage? Will it be enough? Is it achievable in the venture market right now?
• Scenario planning: which revenue and expense scenarios will be most appealing to investors? What is gross and net burn rate in each?
• Use of proceeds: saying “to fund losses” is not enough of an answer; a proper Sources & Uses analysis over a future time period is best able to showcase exactly where the money will go
• Looking backward: how did we spend prior rounds of investment, and how can this be positioned most favorably?
• Ownership table: What will the next funding round do to my capitalization table? Analyzing multiple scenarios is ideal.

If you are in need of robust FP&A services, reach out to Rich at Olympic Advisors, Inc., who has substantial experience and ability to apply two decades of food & beverage knowledge for your business.

Whether your FP&A needs are narrow or broad, give us a call and we can tailor solutions to get you answers in the way that you need them.  Learn more at www.olympicadv.com.