April 9, 2018

5 Things Food Entrepreneurs Don’t Need To Worry About (PODCAST)

Food entrepreneurs have a lot on their plate which adds up to a lot of worry a lot of the time. Rather than add to that already overfull plate, let’s take a look today at some things that you maybe don’t need to be as worried about as you are.

TRANSCRIPT:
Jennifer: Hi. Today we’re talking with Brad Ebenhoeh, managing partner at Accountfully, about five things that food entrepreneurs don’t need to worry about.

Jennifer: Accountfully, which can be found at Accountfully.com, is really interesting because they are a book keeping and accounting firm that works with small food entrepreneurs across the country.

Jennifer: As you, as a food entrepreneur already well know, our industry is a bit quirky on many levels. When it comes to accounting and bookkeeping, having someone on your side who understands food is key. Accountfully does more than the day-to-day work of professional accountants and bookkeepers. They also pride themselves as serving as a long-term strategic partner to their clients. This means that Accountfully can act as their bookkeepers, accountants, CFOs, controllers, and CPAs. Fluent in the inner workings of the food businesses that they work with, they are also a trusted advisor, a resource when it comes time to making big decisions.

Jennifer: Brad, thank you for taking the time to talk with us today.

Brad: Well, I really appreciate the invite, Jennifer. I’m excited to chat a little bit more.

Jennifer: What I’m really excited to talk to you about today is that we as entrepreneurs, we tend to always be worrying about our business. It’s the stuff that keeps us up at night. But you say there are some things that we don’t necessarily need to be worried about, or as worried about, as we may be. So, I want to hear what those are.

Brad: Coming from an accountant who runs an outsource accounting company, a business who supports food entrepreneurs across the nation, I just want to let you all know, that yes, there is a lot of things that you probably stress and worry about that you don’t need to worry about as much,and for you to realize there’s people out there like my firm Accountfully that can help you out with those items. My whole goal from a business support service provider is to provide clarity to business owners as well as help them understand what they need to focus on at the level of business that they’re at, or at the specific stage of business that they’re at. I’m looking forward to getting into those topics over the next 20 or 30 minutes or so.

Jennifer: That’s great to hear ’cause for a lot of entrepreneurs, sometimes there is so much on our plates that it’s trying to decipher which of the things we need to give top priority for our time and our energy and our stress, and which of the other things that we can either let fall further down the list or potentially outsource to somebody else. How do we manage all of that? That in and of itself can be a stressor, trying to figure that piece out.

Brad: Oh, no doubt. No doubt. To open a small business, run a small business with all the red tape, the requirements from a local, state, federal level, taxes, business licenses, et cetera, is a pain. Especially in the food industry, where you even have more requirements, around FDA requirements, packaging, and all that stuff that is an extra set of stress points versus just a normal service provider business or whatever. It’s a headache and there’s a lot. As much as you can prioritize or donate off your brain, specifically around things related to accounting, cash flow, taxes, systems integration, margins, etc., that we can talk about here will help out. That’s my goal as a fellow entrepreneur myself, is I wanna train, educate other business owners on some little shortcuts or life hacks from a business perspective that help you worry about where you’re at. I’m looking forward to chatting with you on it. Long story short.

Jennifer: Let’s start with one of those “big nuts,” if you will, that a lot of entrepreneurs do worry about, and you mentioned the taxes. That’s a big stressor for a lot of folks. What are your thoughts around how much worry and energy needs to be given to taxes?

Brad: From a tax standpoint, it’s overly overly overly complex; I will stress that point, even as an accountant and a CPA myself, it’s complex for me just to run my business. Just to be clear with the listeners out there, it’s not easy. When I say, “Don’t worry about taxes” or “Minimize your worry about taxes,” what I’m trying to say is, “Don’t worry about possible amounts owed in income taxes for your business,” especially when you’re a startup in the one- to two- to three-year phase. And the reason I say that is because, from an income tax standpoint, as a food business, in the first couple years typically you’re not making any money from a profitability standpoint on your business. If you are, fantastic; more power to you, and if you are, at that point, please make sure you utilize some sort of service provider, professional accountant or CPA, to help you with that. But, for the majority of people I’ve worked with the past couple years, in my clients and perspective clients and historical clients and other people I’ve talked to, it’s not a factor. In terms of saving money or putting money away on income tax planning or things like that, it shouldn’t be a top priority for you.

Brad: What should be a priority is one, making sure you align yourself with some kind of accountant or CPA that actually makes sure that you file all your forms, submit your income tax perspective on time, and just help you with any planning that comes into play. What I think you need to do on top of that though is you also need to make sure, if you have employees for payroll taxes or things like that, to utilize a proper payroll provider, and there’s great systems out there and user-friendly kinda systems that exist with the brand of technology. The one that we use with our firms is Gusto. Very easy, where our clients themselves can use this system to pay their employees and the system does all the work around payroll taxes and payroll filings and things like that.

Brad: In summary, what I’m saying is typically you don’t need to worry about how much income taxes you’ll owe from the business because you’re not making money in the first couple years of your business. And for those of you that are, aligning yourself with some sort of accountant or CPA that can help you with that, and then the next thing, from a payroll tax standpoint, utilize the systems that exist these days that basically outsource the entire process to them and they can just handle them for you so it’s off your head.

Jennifer: I want to circle back in a minute to this conversation about systems so let’s shelf that for one second ’cause I wanna talk to you more about that. But what I’m hearing you say is, you don’t necessarily need to worry about setting aside the money to pay income taxes if you’re, let’s say, a one- to three-year startup, more or less, for food businesses. But that doesn’t mean that you shouldn’t “worry about taxes;” you still have to file your taxes. But what I’m also hearing you say is that, depending on your own personal comfort level with taxes–’cause we do have some people who are accountants who change careers into the food world–but if you are like me and are not comfortable with filling out those forms and making sure that they’re done correctly, that you can partner with or outsource or find somebody else who can help you do that.

Brad: That’s correct, and the overall theme of it is understanding that it doesn’t need to be your foremost worry or your foremost stress; it needs to be down the list, and to leverage various service providers to help you with that. And to provide that clarity. We have some clients that come on board–just to be clear, my firm’s called Accountfully, and basically, we provide outsource accounting solutions to strong businesses, many of them in the food industry. And many of our clients are three million and under, and the majority of them are a million dollars and under of annual revenue.

Brad: Some of them come to me and their first questions are, “Well, what about taxes? I don’t know what I’m doing on my taxes,” and it’s like, “Whoa whoa whoa whoa whoa whoa; time out. Hold on; let’s talk about your business, let’s step back. What does your business do? Where are we going? How do we then help your business grow top-line revenue? How do we simplify things on the back end? Etc. Let’s put that tax point down the list in priority. Yes, things need to be filed, but it shouldn’t be up near the upper high-level priority of your business. Or fr your task list or responsibility list upfront.”

Jennifer: That’s a great way to think about it because, speaking as a food entrepreneur, I know that it is easy to get caught in that treadmill of, “Oh my goodness.” You’re focused on the minutiae, but what I’m also hearing you say is stepping back for a second and saying, “No wait; actually, what’s the bigger picture with this business?” And yes, of course, taxes are something that have to be filed, but that’s not necessarily something that you need to be spending a lot of time and energy and worry on and you can allot that time and energy and worry onto some of the bigger picture stuff, which is really gonna be what helps grow your business.

Brad: Hundred percent. I definitely agree with you, and the main kind of topics, I think, from business owners that they need to be focused on is business development, business growth, core prime operations of your business, and then putting together a team that can really help support you. That’s your number one worry as a CEO, co-founder/founder of any business, as well as a food business.

Jennifer: Mm-hmm (affirmative). I want to come back around to this topic of systems. Because–and this is probably true across industries, but we’re speaking with food entrepreneurs–we do try to spend a lot of time developing processes that help everything from production to bookkeeping to inventory management, and it’s great that we’re actively working towards those, but sometimes, at least with the entrepreneurs that I’ve talked to, you end up running like 800 different systems, and each one can do one piece of that. When we had talked beforehand, you said that systems isn’t necessarily something that needs to be that top-line worry, so can you talk a little bit more about that?

Brad: Yeah, so my background is working at one of the big four accounting firms that exist within their systems and process group. Out of college, that’s where I went, and that’s where I really learned supporting Fortune 500 companies in terms of process, systems customization, etc. So that’s how my mind works; my mind really works in terms of understanding efficiency, systematizing items, automating, etc. So leveraging systems is super important for your business. And sharing data between systems and not doing manual data entry, and automating different things. I’ll give you some examples in a minute.

Brad: What I mean about worrying about systems is many people will come to them and they have 15 different systems that they already have implemented and a lot of them overlap tasks that get done, and they do this, and they do that, and then not even the aspect of paying for all these systems, especially with all the softwares, the systems that exist, but more so overlapping doing different tasks within various systems that could be kind of minimizing the one system.

Brad: An example is clients that their accounting system is QuickBooks Online, where you can invoice and do everything out of, but then they send PO’s from a Word document because they don’t know how to do PO’s in QuickBooks. Or, QuickBooks doesn’t provide the P&L they need, but they do everything in QuickBooks, but they have an Excel spreadsheet that they do the P&L in. That doesn’t make any sense to me. Let’s find this core systems that work for you; let’s find systems that can do everything you need them to do as well as then share data across those systems. So some examples of sharing data, by that I mean a payroll system that does all the work plus exports the data to QuickBooks Online to your accounting system that actually posts to the general ledger and the accounting for that.

Brad: The biggest one in the food industry is this: we have a ton of clients whose shopping cart is Shopify, where they sell their products online and everything like that. Well guess what, you can set up an easy sync between Shopify and QuickBooks or Zero if you use that as your accounting platform, and all of the sales sync over to QuickBooks and then they automatically post and clear with your bank fee running the bank fees connected to QuickBooks. Guess what? That saves a ton of time and energy between having to manually do things. So when I say, “Don’t worry about systems,” don’t worry about doing a ton of systems; find the right systems that exist for you to do work and then the minimum amount of them and then go forward with that aspect.

Jennifer: You can’t see me right now, but I’m sitting here nodding as you’re talking about manually entering sales and stuff, not that I feel guilty of that. Yeah, that’s the type of stuff that even if it’s not necessarily a worry, it’s a time drain, and it’s time that could be used on something else.

Brad: Exactly. The one thing I’ll say–sorry to cut you off, but it was just the perfect point for me to interject–I tell people the three minute resources that are super limited, from especially business owners. The two main ones for the actual owner of the business is time and money, right? Those are limited in terms of how much time you have to kind of work on your business, ’cause you have your personal life, your business life, etc., and then money, depending upon whether you’re self-funding it, or outside funding, or whatever. Those are very restricted resources, right?

Jennifer: Yup.

Brad: The other support resource that is very restrictive is talent. So that’s why it’s a key aspect of assigning yourself a good talent. That’s why I say go find good people. So understanding that, where you’re saying time is very limited. And we all understand this is [inaudible 00:14:16], there’s a ton of podcasts out there that exist that say life hacks, business hacks, etc. It is a pain to understand–I still struggle as a business owner to make sure I allocate my time appropriately, right?

Jennifer: Yeah.

Brad: Finding the right systems, the systems that integrate and share data, really will help out your business as well as really help you focus on what you need to focus on moving forward.

Jennifer: That’s great, that’s great. I also wanna talk about (and this is sort of moving off)–we’re talking about taxes and then we were kind of talking more systems and technology–but let’s talk a little more tangible with product line. And you, working with food entrepreneurs … food entrepreneurs tend to be creative individuals, and usually have a lot of great ideas about products that they wanna bring forth in their business. What are your thoughts around, do we need to worry about how big our product line is or isn’t? Wat are your thoughts with that?

Brad: I tend to be, as you can probably understand the theme of this, kinda minimizing. Simplifying, those kind of concepts, so let’s not go ahead and throw out a 15-skew line of products, let’s throw out a four-skew line of products or a two-skew line of products; three flavors versus eight. The whole more of a technology standpoint conversation, I want minimal buyable products, right? Let’s get it out, let’s get a couple skews out, is it gonna work? Let’s iterate it if it doesn’t work. “Oh wow, this is really coming out.”

Brad: Maybe you’re out they’re selling muffins, and it’s really not working and then three skews and then you actually go out and say, “You know what?” You get some feedback and you move to a different actual product. Or a byproduct of that product, whatever. So my goal is I kind of tell clients–obviously I’m not specifically with industry; I’m a support provider for these businesses, so I’m not in the day-to-day grind–but let’s not go out and do all these different lines or different skews and different products when you can actually minimize it. Put it on the market, get some feedback, try to sell, and then iterate change. Maybe the label’s wrong; maybe different things are going on. The reason why I say this is ’cause you only have limited time to focus on various products, get them out there, see if it works, as well as you also have limited cash. So the more products that you put out in the market, that’s more cash you actually have to spend to get them out in the market.

Jennifer: Yup.

Brad: So if there’s limited cash, boom, put ’em out there, and maybe it’ll start taking off ’cause your branding is right, your marketing’s right, maybe you’re just hitting the right [inaudible 00:17:02]. Lock, it’s hit you, great, and we can add on over time or whatever. So once again, minimize the number of products that are out there, take market feedback, see how things are going, and then maybe expand as needed or maybe iterate it slightly or maybe change it or whatever and kinda get out there and test and keep those creative minds rolling along from more of a what is working and let’s focus on what’s working and tweak the what’s working to make it work better. And that’s kinda my goal, or kinda my advice to entrepreneurs.

Jennifer: That’s wonderful advice, especially if you’re kind of early stages with your business, but let me ask you this and from kind of an accounting standpoint, let’s say that you are that entrepreneur who did launch; you were super excited and you launched with ten skews, and you’re struggling and you’re worrying about how to manage all of this. Is there anything that you can recommend that entrepreneurs should be looking at with regards to potentially their numbers for each of these skews to help them decide which ones they might need to cut and which ones should be sticking around.

Brad: Yes, I would obviously say a couple different things to think of. Obviously, say I was buying, skew right, what is really turning, where are people finding that they like the flavor or the specific skew you have. Obviously, you need to focus on that. But other items that exist, or other things to think about as part of that, maybe you have a couple skews that are harder to manufacture or they have longer lead times to manufacture and it delays your cash cycle a couple more months because you have to sort different things in a different manner or from overseas or whatever. Maybe those are ones that you can cut off the list for now because it’s just too complicated or too long to implement or think about. The other things I would think of would be products that you can’t have a turnkey co-packer launch for you [inaudible 00:19:07] there’s much more aspects that come along with that. So you have to source raw materials and deal with that.

Brad: Those are a couple things I guess I would say from that aspect from kind of trying to reprioritize your product list or your pipeline.
Jennifer: Yeah, that’s a great starting point. You know, obviously looking at the idea of sales by skew, that’s the first one that jumps out but that point that you brought out of also just looking how different skews might impact your cash flow from a standpoint of it just ties cash up, I haven’t thought of, so that was a really interesting one to think about when you think about ingredients, packaging, lead time if you’re working with a co-packer, that type of stuff. In the food world, cash is king. You’ve gotta have the cash to keep going. Keeping that in mind is really important.

Brad: Mm-hmm (affirmative). For sure. You need to constantly think about that stuff as you know–cash can just kinda flow out the door very quickly with an inventory-based business.

Jennifer: Always more quickly than you want.

Brad: Yeah, I never see the cash forecast or profit forecast that kinda is under conservative and it actually works out and there’s much more favor. And it’s just because it just never works out, and you just need to understand that.

Jennifer: Yeah. I always tell folks it takes more time and more money than you expect. If you believe that, then you’ll be okay.
Brad: Exactly. Set the expectations really low, because then it’s easier to understand when you take those hits or take those negatives that come about and you’re like, “Hey, I was expecting some things to happen, so now let’s figure it out, let’s fix this, and let’s go.” Find a solution that works out. Definite.

Jennifer: Speaking about cash, let’s talk about margins, ’cause that is a question I get all the time. What are your thoughts around figure out margins and pricing and all of that is a big stressor to a lot of entrepreneurs. So I’d love to hear your thoughts on that one.
Brad: Yeah, the biggest thing about margins, obviously setting pricing is kind of a I can’t say how you set prices; price is dependent on the market and what the market’s going to sell. Or is willing to purchase, right? My biggest thing on margins is aI can help you understand you costs and your margin your profitability by skew, your customer profitability by sales channel. We can show you that information. When clients come on board, some of them are very focused on margins. They’re like, “I’m moving forward and I’m going to source all of the materials in house; I’m gonna manufacture everything. Because I get higher margins than going to a turnkey co-packer.” As a startup, a million-dollar business and under, I’d say that’s the wrong focus. If you can find a turnkey co-packer that provides quality control as needed, that provides timing and expectations and–obviously these are wildcard rules–understand, you guys are in the industry, you guys know how it is to herd all of the co-packers, herd all of the vendors, the raw materials, it’s a lot of time and effort.

Brad: But if you can find that–even if it’s obviously gonna be more expensive than sourcing everything and doing it yourself–but guess what? If they can do it, and they can provide you everything you needed at the time you need the product, at the quality you need the product? That’s what you need to move forward if you’re a small business or a startup. The reason I say this is because you need to be focused on top-line growth.

Brad: That’s what you need to get up to, right? You go and you say, “Hey, I just went from zero to two million in 18 months of sales.” How [inaudible 00:22:48] I that, I did this this this a provocative market [inaudible 00:22:50] I got into some retailers direct, I’m selling here on Amazon, I think I have a great brand, I know how to market my brand online or on social media et cetera and it’s growing. Guess what then? You can go to investors if you need to raise money and go, “Look, this is how I’m growing my business, and what I need some help with is cash, you know, to operating cash, buying inventory cash, whatever, and you can say look right now I’m using a turnkey co-packer and my margins are X percent. As we grow this business, my long-term goal is I’m to bring the sourcing, the raw materials, the manufacturing in house, that’s gonna improve my margins by 10 percent, let’s say. Then you go ahead and sell that to these investors and they’re like, “Awesome.” There’s a lot more cash and profits to be had just by pure margin savings, which is normal as you grow your business, right? You’re able to save typically and the margins and cost of products as you get buy-in [inaudible 00:23:44] and things like that.

Brad: That’s when you need to worry about margins. Is when really worrying about saving and getting the maximum margin is when you are kind of at that point and you’ve shown that you can grow the top line rather than say, “hey I have the real brand here. I have something I can really focus on. And really can expand and take it to a 500 dollar revenue business or 10 million dollar revenue business.

Jennifer: So what I’m hearing you say is that it’s okay to have a slimmer margin in the beginning if part of your business strategy is a growth strategy because you’ll be able to make up those savings ideally down the road.

Brad: Exactly. Exactly. And once again, it goes back to time, right? So if you have a business that there’s three people on the team, let’s say, who’s going to be focused on sourcing all the raw materials? Who’s gonna go out and bring them all in house? Who’s gonna go ahead and check them in? Who’s gonna go ahead and manufacture the product and things like that like guess what? That goes into you managing those people; managing, making sure that that’s all getting done. That’s when it comes in, the whole outsource as a co-manufacturer, as a turnkey solution, you’re outsourcing all those responsibilities to them, and they’re a professional organization, they know how to do this, and that’s what they’re good at.

Jennifer: Mm-hmm (affirmative).

Brad: You’re good at creative; you’re good at your brand, you know, you’re your brand evangelist, you’re the person who needs to lead out, go out and shake hands in the industry, shake hands with investors, shake hands with buyers, shake hands with whoever you need to and get out to Expo West, Expo East; all these great expos. That’s where you need to be and focus your time and energy on versus worrying about all these little things that come into play.

Jennifer: Well it’s a great point. And speaking of buyers, let’s talk about that. One thing that I hear time and time again from food entrepreneurs is kind of looking at whole foods as almost this holy grail. Like “Hey, I’m gonna spend all my time and energy trying to figure out how to get into Whole Foods,” and even that whole thing’s been complicated now with the merger with Amazon, the purchase by Amazon, so one thing that in talking to you beforehand, you said that maybe food entrepreneurs don’t necessarily need to worry so much about getting into Whole Foods.

Brad: Correct, correct. Obviously, it’s great when you see your brand on a Whole Foods shelf. That makes kind of the sense of feeling “I made it, I made it.” The problem with all that goes right back to cash flow. When you get into retailers or when you deal with distributors, UNFI, KeHE’s, etc., your cash goes down and your margins; like I say, don’t worry about margins. You’re not making anything on those products for a while. If that’s your strategy and you have a lot of cash to get you through that, that’s fine. I’ve had some clients that come in and they’re making million dollars plus and 95% of their sales are e-comm: direct to consumer on a website. Seventy percent margins. And I’m like “but hey, what’s your next step in this strategy?” “I wanna be into Whole Foods, I wanna do this” “Okay, that’s fine but do you understand there’s gonna be a two- or three-year window where this is going to be a struggle and you have to buy inventory, you’re not going to get all the cash right away because of chargebacks and trade spend etc.

Brad: That’s just how it is, and guess what? Boom, your business went through a struggle for a couple years. Came through it, but it’s not as fun and easy as where you’re at. If you’re able to go e-comm and you know sales and marketing your brand online direct to consumer, and you’re making killer margins ’cause there’s no middle men? Stay within there, and focus on it, and keep working down that way, and grow your business in that manner, because you have the holy grail of the food business. You can be profitable within a couple years, or even a year, because that’s where you reside.

Brad: So when I say that, we come out with clients who’s already in UNFI or KeHE or all the stuff that’s going forward, and we run the numbers and get everything cleaned up and see property move by sales channel, and they’re just like “man, our business relies upon UNFI buying product from us. And on top of that, our margins are so tight that there no cash flow there.” And you’re like, “How do I get out of this?” And I’m like “Well, your e-comm side of your business is two percent of total revenue. How do focus our time and energy into that aspect of the business and try to get some time and energy and focus on that aspect ’cause that’s where you can get 70% margins or 60% margins, depending on product and how you ship going out.”

Brad: So when I say don’t worry about it, that’s what I mean. The last thing I’ll say is that I was at Expo West a couple weeks ago, and ran into a client that actually outgrew us several years ago, and his products doing well, they’re crushing it, they’re doing awesome. But I was talking to him and he was like “Man, if I to do this again, or if I’m gonna launch a different business down the road, different food business on the road, I wouldn’t do Whole Foods, I wouldn’t do distributors, I wouldn’t do KeHE, you know. I’d focus right on e-comm and taking my product that way. So I cannot stress that to clients you know fellow colleagues in the business to really make that your core focus because if you can, then the whole foods and the KeHE and distribution will come on down the road if you can really make your business a that sort of majority of your sales are on the e-comm going forward as a small business. So there’s a couple thoughts of mine about that aspect. Once again, I’m not on the day-to-day grind of your business and all that aspect that comes about but just something to think about from kind of an accountant perspective.

Jennifer: You know, but I think from to your point though is that oftentimes we as food entrepreneurs get caught in this, especially if we have a shelf-stable product, are thinking “Oh well, the road map is set, and the road map is such that I’m gonna produce my product, I’m gonna get it into Whole Foods, and then that’s the map we have to follow, And what you’re saying is “No! There are other avenues to get you to a financially healthy and successful business that you can go down that isn’t necessarily just relying on that. So I’ll kinda throw in another story. There’s a food entrepreneur I know who’s doing, their companies doing pretty well and have gotten to the point where they were looking for outside investment and were having serious talks with venture capital firms and then it turned out that they got taken out of rotation at a big box retailer, and it was something like 85% of their sales were coming from that. So all of a sudden, their quarterly sales just tanked because they were taken out of rotation.

Jennifer: Now, the chances are that they were gonna be put back in rotation, but is that gonna be next quarter? Is that gonna be next year? They don’t know. So to have to go in front of investors and trying to explain why your sales have just absolutely hit rock bottom, comparatively, and then this unknown factor or “well we know this retailer like us but we don’t know when we’re going back on the shelf there,” that’s not a great story for investors. And so that idea of just diversification, even if you’re listening and you’re like, “You know what, I just don’t really do want to get into Whole Foods or some other larger retailer,” that’s great, but where can you diversify so that if something happens and you’re taken off the shelf either permanently or temporarily, it doesn’t kill your business.

Brad: Definitely, definitely, you know what, I was gonna actually say that word “diversification.” It’s really what you need to think about because if you can think about to your point if you lose out in that rotation of sales for a quarter or two, if you’re like “Hey, 40% of my business has always been e-commerce sales,” it’s still gonna be there. I have something to fall back on. It’s not a great position to be in if you lose rotation at those stores, but at a minimum that’s just kinda what you need, you actually have something to fall back on.

Jennifer: Yeah, you know, and even from a standpoint say if somebody’s listening and they’re like “well I’m not a shelf-stable product” well I know a lot of small retail shops, let’s say a small retail bakery that are also doing wholesale on the side. And they’re like, “Yeah, the retail side is great, but then we are wholly reliant on people walking in the door,” and if it’s all the sudden a blizzard out, if I lived in the Northeast, and I’m now three weeks into these blizzards, if you’re a retail store, that really slow down how much customer traffic’s coming in your door. But by having the wholesale side of your business as well, where you’re supplying to restaurants or other food service organizations, or even other bakeries, you have this diversified stream of revenue that’s coming in, so you’re not wholly reliant on the customers coming in the door every day.

Brad: Hundred percent agree with you on that. Diversification, understanding who your customers are currently, understanding how you can expand that customer base as much as possible within your business strategy, but to your point, there’s a ton of you know some clients have you’re saying food service obviously there’s like food trucks or restaurants or things like that that you can wholesale to, but also there’s food service companies that exist out there that bring food to companies at lunchtime. That can be a whole [00:33:29] opportunity, right? To have your food go to that, or just there’s so many out of the box opportunities that exist in today’s society versus what existed 20 years ago, and just connecting that through and trying to position yourself for the most success is always the best [00:33:48] from my perspective.

Jennifer: You know and as you were talking about that the thing that popped into my mind was this idea of I mean that sounds like a great brainstorming opportunity to sit down with the food entrepreneur, to sit down with mentors, advisors that you may have, you know if your business is not at that point yet, even just friends who are you know business-savvy, and just brainstorm like “okay what are all the potential channels that we can go after?” And then of course you’re going to have to you know like the theme today of “less is more” you don’t wanna make yourself so scattered that you are worried about 800 different sales channels but then kind of pick through and looking at your strengths and weaknesses and the strengths and weaknesses of your team like well where can we focus our energy? The business geek in my is like “that would actually be a really fun brainstorming situation, just to see what people came up with.”

Brad: Definitely, definitely. I think it’s a great little thing. And I think the other thing is, you know, it’s kinda less is more is the whole concept here, but I was at Expo West a couple weeks ago, and we were talking to this random business, you know, just walked up to them and was chatting with them and trying their product, and they literally created awesome byproduct from their business; they’re basically a kettle chip and then their byproduct is little kale season that you can kind of the salt pepper type deal you can just season it on various salads or products or chicken or whatever you wanna do and I was like “Boom, that’s awesome.” Very byproduct, very little extra costs that go into that and you’re already throwing it away, so that’s even another situation you can say “Oh yeah, well I’m already doing this, what is my byproduct? What is my waste?” That I can just package it up and sell and see if I can make some more money out of that. Things like that to think about that really kinda can help you take your business to the next level or give you a little bit more opportunities out there to help you make some you know the whole idea is opportunities and then deciding what is the right opportunities to go down towards.

Jennifer: That is a great example; thank you. Well and Brad I also wanna thank you for your time today. As I said in the beginning, we have so many things we can be worrying about, to being able to focus on the right things to worry about, is really important for an entrepreneur. So thank you so much for coming on and sharing your thoughts with us.
Brad: Oh I once again, I appreciate the invite, Jennifer, and I’m not trying to sit here and tell people that it’s easy or don’t worry about anything, I’m just trying to provide a little bit of advice from my perspective and once again, my perspective is from the accounting, what’s actually going on, cash flow, etc., and where I see a lot of people’s brains just get scattered. And this just isn’t food entrepreneurs; I have clients across all business lines. Food is a big part of our clientele but just understanding like “hey, business is hard. Growing a business is really hard. Very little businesses make it.” So as much as you can simplify and focus on a couple things and do it really well and provide it to your customers really well, then your business has a really much better chance of success in the long term.

Jennifer: Mm-hmm (affirmative). Absolutely. I wanna also remind listeners that there will be a written transcript from today’s podcast, so you can find Accountfully at Accountfully.com, but we’ll have links also in the transcript and if you wanna sit down and print this down and highlight it, if there are notes that you feel like you gotta takeaway as a business owner, you can do that as well from there. So Brad, thank you again; really appreciate it.

Brad: You’re welcome and once again, appreciate you bringing me on board.

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