A clarity-driven guide to help founders diagnose blind spots and prepare for a profitable year.

Scaling Isn’t the Goal — Profitable Scaling Is

A beverage founder hit $2 million in revenue, landed a nationwide retail deal, and celebrated what looked like a breakout year. But a year later the brand was in crisis mode. Margins were razor-thin, cash was tied up in inventory, and marketing spend was outpacing actual growth. “We were scaling,” the founder said, “but we weren’t scaling smart.”

Sound familiar?

You’re not alone. Many founders are heading into 2026 feeling stuck — frustrated by plateaued progress, stretched thin doing everything themselves, and afraid that next year will just be more of the same. But it doesn’t have to be.

Now is the time to do something differently. Whether you’re prepping for your next raise, trying to grow into more retailers, or just craving fewer late nights and more clarity, these five numbers are the foundation of profitable growth. Nail these, and you’ll enter 2026 with confidence — not chaos.

The Five Numbers That Matter Most

1. Gross Margin (Per SKU and Blended)

Gross margin is your guardrail. It shows how much money you actually keep after making your product. High revenue is great, but if your margins are too thin, you’re running uphill with weights on.

Target: Most early-stage CPG brands need at least 40–50% margin on DTC, and 35–45% in retail. Lower than that? You’re either underpricing or overspending.

👉 Track margin by SKU and by channel. And make sure promotions and distributor fees aren’t eroding your real profits.

2. Customer Acquisition Cost (CAC)

What does it cost to win a customer — and is that spend actually worth it?

CAC isn’t just a DTC metric. Sampling programs, field teams, distributor fees, and retail promotions all count toward your acquisition cost. If you’re spending $100 to win a customer who never comes back, you’ve got a problem.

When you’re selling in retail you need to know your trade spend and the ROI on specific trade activities.

Pair CAC with Customer Lifetime Value (LTV) to find the balance.

3. Cash Conversion Cycle

The cash conversion cycle tells you how long your money is tied up in inventory, production, and logistics before it comes back as revenue.

If you’ve ever felt like your business is growing but your bank account isn’t, this is likely why.

Cash Conversion Cycle (CCC) = Days Inventory Outstanding + Days Sales Outstanding – Days Payables Outstanding

• Days Inventory Outstanding (DIO): How long it takes to sell the inventory you buy or produce.
• Days Sales Outstanding (DSO): How long it takes to get paid after selling it.
• Days Payables Outstanding (DPO): How long you take to pay your suppliers.

Real Example:

A snack brand holds inventory for 45 days, waits 60 days for a distributor to pay, and pays its copacker in 30 days.

CCC = 45 + 60 – 30 = 75 days

That means cash is tied up for 75 days before returning. If the brand speeds up production, lands new accounts, or ramps spend without improving CCC, their bank account may still go down even as revenue grows.

4. Inventory Turn Rate

Sitting on excess inventory can quietly drain your cash. Too little inventory? Missed revenue. The key is balancing sell-through with production lead times.

Inventory Turn Rate = COGS ÷ Average Inventory

A higher number means you’re selling through faster. A lower number means you’re tying up cash in products sitting on shelves or in your warehouse.

Real Example:

Let’s say last month you sold $120,000 worth of product (COGS), and your average inventory level was $30,000.

Inventory Turn Rate = 120,000 ÷ 30,000 = 4 turns per month

You’re cycling through inventory somewhere around every 7–8 days. Great, as long as your lead times can keep up.

What to monitor:

• Turn rate by SKU (your slowest movers quietly limit your cash the most)
• Turn rate by channel (DTC usually turns faster than wholesale)
• How seasonality impacts reorder timing

5. Burn Rate and Runway

You can’t lead with confidence if:

• you don’t know what you’re spending each month, and 
• how long your cash will last. 

Burn rate and runway are your early-warning systems.

Burn Rate = Monthly Expenses – Monthly Revenue

Runway = Cash in Bank ÷ Monthly Burn

These tell you whether you’re on a sustainable path or sprinting toward a wall.

Real Example:

Your monthly expenses total $85,000 and your monthly revenue is $60,000.

Burn Rate = 85,000 – 60,000 = $25,000

If you have $150,000 in the bank:

Runway = 150,000 ÷ 25,000 = 6 months

That means you have six months to change the trajectory and stay afloat.  To do this, you will need to improve margin, raise capital, or reduce expenses–or all three

Operational Blind Spots That Steal Profit

Even when the top-line looks good, profit leaks happen behind the scenes:

• Disorganized finances or unclear budgeting
• Inefficient contractor usage
• Overspending on trade promos or shipping
• Doing too much as a founder

This is where delegation becomes a growth strategy — not a luxury. The key is doing it without over-hiring or losing control.

That’s where partners like BELAY come in. Their Financial Solutions help CPG founders gain financial clarity fast, without the cost of a full-time accountant, bookkeeper or CFO. Their deep experience in complex inventory-based businesses can support your growth goals as a founder.  From clean books to strategic forecasting, it’s the kind of support that pays for itself in smarter decisions and less stress.

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