Mistakes of the costly kind

What if you didn’t need to make them?

When I joined Ella’s Kitchen it was already a very successful business that had overcome its growing pains, a stark contrast to my time at Metcalfe’s Food who were going through their ‘hockey stick’ moment. All small consumer brands aspire to experience exponential growth and fight tooth and nail for years to hit that magical tipping point. So, you would think, that after years of striving for it, the business would be ready to scale, right? The simple truth is that quite often, all the important foundations needed to capitalise on your opportunity aren’t in place until it’s too late…now that’s painful.

Here’s a short list of a few things that I’ve experienced first-hand; lessons learnt the hard way one might say.

Capacity challenges

Fantastic! You’ve landed a huge increase in distribution and the factory always said that they had loads of capacity, so they will be happy to hear about it. They are indeed happy but they can’t produce it all when you need it because they have maxed out capacity in that particular week. Huh? Annual throughput and weekly production capacity aren’t the same things. Have you properly worked through capacity with the factory?

Scale brings with it lots of change and all stakeholders need to be geared up to deliver. Identify bottlenecks, changes to planning processes, weekly & monthly throughput, downtime plans, and work through a collaborative planning process to future proof the business.

Grown up problems

You’re not a small business any longer, you’re a scale up. Well, in the eyes of the office for national statistics technically you are a small business, but for as far as the industry goes, you’re now growing up so need to leave your adolescent days behind you; patience is running out. The retailers expect you to hit certain standards, and if like most in the industry, you’re an asset light business (i.e. you don’t produce in house), then that means getting your suppliers in ship shape condition.

Are you using the right suppliers? Are your commercial agreements water tight? Do your suppliers meet the desired service levels? Make sure your business operations aren’t left behind.

Work smart not just hard

In the early days being inefficient can be forgiven, but as you scale inefficiency can become costly. The 4 different excel models that you’ve been working off for the last 3 years just won’t cut it anymore. I’ve seen some unbelievably costly mistakes made as a direct result of creaking systems and process that just can’t keep up. Working smart is about critiquing your own business and spotting opportunities to take waste time out of the operation so that you can focus on adding value.

Think automation, think rationalisation, think elimination and you’re on the right track. Remember that every penny wasted is a penny not being reinvested in your promotional strategy, you’re packaging re-design, or your next big hire.

People power

It goes without saying that hiring the right people at the right time is pivotal to success, but remember that hiring takes a while and getting your new superstars firing on all cylinders even longer. Showing initiative and maintaining a positive attitude will never be in short supply in a small brand but do think about complementing that with the right experience from elsewhere in the industry. As the business matures it will demand new things from the team and this needs to be factored into your hiring plan.

Understand your teams’ skills gap and work with them on structured professional development plans to make sure that when the business starts to really move you have the right resource in place to smash it.

Challenge the status quo

Chances are you’ve worked with a few suppliers since day one and you’re ‘pretty happy’ with what they do for you and the cost at which they do it. If you’re scaling, then the volume you’re doing now and the volume you were doing when you first entered that supply relationship are vastly different. There is never enough time in the day but what if the deal that you’re ‘pretty happy’ with is costing you £100k more than it needs to every year? That’s a worthwhile phone call, right?

Make sure that you have a handle on your commercial agreements and the fundamentals that they were based upon. Have price breaks? Make sure you’re maximising them. Haven’t tendered for a while? Make sure you know what else is out there – benchmark.

We're proud to the announce the launch of our Operations MOT. Our experts will spend time with you to assess everything from manufacturing agreements to forecasting models and processes. We’ll provide our critical insight, identify key business risks, and create a to-do list of improvement actions. Get in touch with rosie@youngfoodies.co.uk to learn more.