People running food manufacturing startups are amongst the most stretched business people out there.
Getting up early in the morning to prepare, monitoring production throughout the day and cleaning on the evening. Not to mention admin, deliveries, sales pitches and everything else that goes with the territory.
So how does the business grow? And when it does, how can you equip yourself to cope? You may even be actively looking to instigate growth.
Well, here are our top five tips to making growth as smooth as possible.
- Batch size
The bigger batch size you make the lower cost per unit. This might seem like a great way to improve profits but don’t be caught out! Baking too much that results in waste will negatively impact profits; find a batch size that falls in that ‘sweet spot’.
What you put in to a product in terms of weight doesn’t necessarily equal the same in output. But you need to cost for products accordingly. For example if you require 100g of an ingredient but can only purchase it in 120g quantities you should price 100g of usage at the cost for 120g. If the remaining 20g can be used elsewhere then you may have to alter this calculation, but it’s not always the case.
- Process time
Make sure you consider all of the time that goes in to your product: preparation, cooking, curing, packaging, transport and others.
18th Century economist Adam Smith pioneered the theory of segmenting processes. Rather than having an individual do each stage of process, giving each person a dedicated role within a process speeds up production and improves efficiency.
In it’s simplest form, as long as your income is higher than your overheads the company should be turning a profit. But you can make your business more efficient by making sure each physical item is paying its way. For example if your rent is £1000 per month and you have a machine taking 10% of the space it should be responsible for at least £100 per month worth of output.
If you’d like to chat in more detail then please email or call us on 01482 679333.
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