3 Ways To Visualize (And Improve) Your Food Business

In the fast-paced and ever changing world of food entrepreneurship, sometimes it can be difficult to fully assess and describe the business development opportunities that should be taken advantage of. Customers need to be served, vendors need to be paid, and it is difficult to find the time to focus on developing and growing the business, refining the business model, and positioning the business for the future. Luckily, there are some tools that can help visualize what is going on in the business in a way that helps make informed decisions about where the business should be headed.

Business Model Canvas

The Lean Business Model Canvas was developed as a tool to make the process of new product and new business development more streamlined. It does this by forcing entrepreneurs to quickly iterate their business via a non-linear process that documents the business model (i.e. the interrelated set of things that ensure the business makes money) before committing to or writing down a larger plan. This allows the entrepreneur to iterate and test their business model (by trying things and researching things) that they can then revisit by looking at their most recent canvas.

Notice that the Unique Value Proposition is in the middle (see above), since being defensibly unique is central to the business and business model being viable. Often entrepreneurs change what they thought were essential elements of their business (like what their value proposition is and who it is for) after testing it with real customers in real situations, and this necessitates changing other things on the canvas as well. Seeing how changing one aspect of the business necessitates changing another aspect is an invaluable part of using the canvas.

Once what makes their model “work” becomes clearer after these iterations, the canvas can serve as a basis for a larger plan. The canvas gives food entrepreneurs the freedom to experiment while documenting what are the most important things to focus on to make their business viable

Competitor Matrix

When food entrepreneurs are summarizing their business models in a slide deck for presentation to lenders and investors, the competitor matrix is one of the slides that are required to make a successful pitch. This tool places the food business in the context of the competition (specifically, businesses with competing product categories going after the same target customer), allowing lenders/investors (and the entrepreneur) to see where they fit against the facets of the food business that make it defensibly unique in the marketplace.

The facets against which food entrepreneurs should compare themselves to the competition vary from business to business. These facets could include basics about the product and customer experience like price, quality or service, but can also include less tangible things like trust. And, it can also include things related to the defensibly uniqueness of the business model but that might not matter to the customer. For example, any food business with a proprietary process or dedicated manufacturing facility might be able to list those facets as points of differentiation if it gives them a competitive edge over their competition.

The point of this exercise isn’t to show how your food business is superior to all competition on all of the facets. Realistically, some of your competitors can compete with you on at least one of those facets of your business. But, a good matrix should show that the business model and product set provide something unique in the marketplace through 3-5 points of differentiation that no one competitor can match fully.

Sales Forecast By Channel

Whenever we help food businesses develop their proforma (forward looking) financial statements, we often work with them to develop a sales forecast by channel, usually monthly for at least one year and then yearly after that. We help them break this part of their financial statements (the sales lines on the Income Statement) into its own spreadsheet to make things easier to digest. And, our template helps them note when new key customers that will greatly expand distribution are coming into the business, allowing the food entrepreneur to see which channels will bring in the most sales. Since this is done in a spreadsheet tool, it can be visualized as a bar chart!

As this tool is iterated and revisited by the business as they see what traction they are able to get, food business owners can refine their business model and clearly communicate future growth targets to employees and lenders/investors. And, it helps clarify where the business needs to focus (in terms of marketing spend and cash flow management) to support bringing in new channels of distribution.

There Is No Perfect Tool

There are no shortage of tools and templates that help provide clarity and bring order out of seeming chaos for food businesses. However, these tools are no substitute for strong accounting and financial statements to manage food businesses. But, the business model canvas, the competitor matrix and sales forecast by channel can help visualize key aspects of food businesses as they seek to grow and get profitable.

And now, our roundup of the best food and beverage finance news, events and resources from around the web…

Consultant With Tablet

Business Model Insights

  • The Rise of the Virtual Restaurant (New York Times) – “No longer must restaurateurs rent space for a dining room. All they need is a kitchen — or even just part of one. Then they can hang a shingle inside a meal-delivery app and market their food to the app’s customers, without the hassle and expense of hiring waiters or paying for furniture and tablecloths. Diners who order from the apps may have no idea that the restaurant doesn’t physically exist. The shift has popularized two types of digital culinary establishments. One is ‘virtual restaurants,’ which are attached to real-life restaurants like Mr. Lopez’s Top Round but make different cuisines specifically for the delivery apps. The other is ‘ghost kitchens,’ which have no retail presence and essentially serve as a meal preparation hub for delivery orders.”
  • Meet Your Consumers Where They Are (Intertwine Group)
  • Founder of Creation Nation shares tips for finding a co-packer (Food Navigator)

Raising CapitalRaising Capital

National Wholesale Brands

CPG/National Brands

Grocery Store Produce Section

Market Trends

Regenerative AgricultureFarming and AgTech

  • Farmers Prevented from Planting Crops on More than 19 Million Acres (USDA) – “Agricultural producers reported they were not able to plant crops on more than 19.4 million acres in 2019, according to a new report released by the U.S. Department of Agriculture (USDA). This marks the most prevented plant acres reported since USDA’s Farm Service Agency (FSA) began releasing the report in 2007 and 17.49 million acres more than reported at this time last year. Of those prevented plant acres, more than 73 percent were in 12 Midwestern states, where heavy rainfall and flooding this year has prevented many producers from planting mostly corn, soybeans and wheat.”
  • Growing Regenerative Ag One Investment at a Time (Regenerative Food Systems Investment Forum)
  • Understanding Farm Financials: Cash Flow Essentials (Compeer Financial)

Mergers And AcquisitionsDeals/M&A

EventsIndustry Events