I help Food & CPG Founders build Profitable Businesses | Accelerator Program Mentor | Former Founder | Fractional CFO
It's often easier to stick with the familiar than deviate off path and do something new. I was chatting with a fellow founder recently and was struck by a $40,000 example of this. One of his flavors was not scaling well into their new co-packer. They were ready to spend $40K on a food scientist to get it to work. It's easy to get trapped in the familiar, to just throw money at a problem, creating a false sense of certainty and preserving the status quo. But being the financial-math nerd I am, I couldn't help think about the ROI of this. What struck me was that this investment would NOT: 1) increase volumes 2) lower costs, or 3) increase pricing power The incremental earnings potential was therefore $0. So I encouraged them to think about what else that $40K could be spent on, and ask themselves whether any of those other ideas might generate a better ROI than this one (which is essentially 0%). Like I said; It's easy to get trapped in the familiar. But when you take a step back, and think about the big picture, very often alternative options will appear - and often times they'll be better than the status quo. ----- Enjoy this? ♻️ Repost it to your network and follow Nate Littlewood for more. Want to Learn How to Manage Your eComm or CPG Finances More Efficiently? Sign Up For My Newsletter: lnkd.in/equWNs5e
