The Good Food CFO

0:00Sarah Delevan:Welcome to the Emerging Brands podcast. Sharing the stories behind brands you'll want to shop next. I'm your host, Kelly Bennett. I am a New York City-based brand strategist for CPG Food and Beverage Brands. In each episode, I'll take you behind the scenes of founders that are building better-for-you products and bringing them to market. it. Also, I talk to brand builders, retailers, industry experts, and tastemakers who help bring those cool products to your shopping cart. You will hear stories of real-life founders, their launch strategies, and practical advice you could use to grow your own brand or simply discover what's next on shelf.

0:42Sarah Delevan:And the best part is you could shop all the brands featured on the show. This podcast is brought to you by Hummingbirds. Hummingbirds is the go-to platform built for creator-powered retail activations. They're connecting everyday creators with CPG brands to generate shelf-level awareness, drive in-store momentum, and generate authentic content in markets that matter the most. Go to hummingbirds.com for all the details and let them know I sent you. This podcast is brought to you by Glimpse. Glimpse is an AI-powered deduction management tool that disputes and recovers invalid deductions. Winning brands thousands of dollars and hundreds of hours back to founders so that they can focus on what really matters most.

1:35Sarah Delevan:If you're a brand selling in retail, go to tryglimpse.com backslash trial for 30 days free and let them know I sent you. Now let's dive into the new episode. Hi everyone. Welcome back to a new episode of Emerging Brands Podcast with Kelly Bennett. Today I have a very special guest, Sarah Delavan. She is the CEO of The Good Food CFO, and she is also a client. She is someone I literally send all of my clients to because she is such an expert in helping founders from that pre-launch to their first million in revenue, how to have a financial strategy in place. And she doesn't make it scary or daunting.

2:23Sarah Delevan:She's just so helpful and makes you feel so much more confident as a founder. So Sarah, thank you so much for coming on the podcast. And I can't wait to dive into all the things that you do today. Thank you, Kelly. I'm really excited to be here. Good. First, I want to kick things off with what is the Good Food CFO? Yeah, the Good Food CFO is a financial strategy company designed to help purpose-driven brands from pre-launch to their first million in revenue, develop and implement their financial strategy, right? So everything from how do I price my products to how should I grow my business to am I doing okay?

3:07Will I survive? How much investment do I need? But we make it really simple. We do it in a specific order and it's really designed to help founders and businesses thrive and to beat that statistic, which I'm sure you've stated here on your podcast, of 70 % of food brands failing and typically failing within the first five years. And I know we'll dive into more of like the why and the software itself, but that's a really big part of why this exists and what we're doing and who we're helping.

3:40Sarah Delevan:I literally was explaining that to a brand new founder who's just putting all the pieces together. And I was like, listen, you got to have some really solid foundational pieces in place because 70 % of food, beverage, I would put into that too, 70 % fail within the first five years. So without the foundation, and that's why you and I align so much for multiple reasons, but especially that pre-launch, those early days, so that founders have the insight to make the right decisions. Because something that you do so well is really advocating on you don't have to follow these buzzy business headlines and do it the way that you're seeing is getting the most flashy you know news you do it in a way that feels really aligned to you and your business and your product and how you want to build and how you want to grow and that you do have that driver's seat with your finances, where most people feel like they're on the defense when it comes to financials.

4:54Sarah Delevan:And I love how you're flipping that script. Thank you. I think, you know, if we go back in time a little bit to the origins of the Good Food CFO, it started out as a podcast and just a podcast where we were creating a space to talk about food business finance. I started in 2017 with a fractional CFO consulting agency. That was what I did. And the podcast was like an extension of that and a way to say, okay, we're going to talk about these things I'm talking about one-on-one with founders in a more public arena to try to help as many people as we can. What then started to happen was people were coming for consults that couldn't afford us, shouldn't be paying for a CFO because they were like too early in their business or were in such a bad financial situation that they were essentially running out of time and we didn't have enough time to help them.

5:49And I like to think that I'm a good person. And as a result of that and learning like this big swath of founders and brands that we could not help, I spent a lot of time thinking, how can I help them? What can we do? How do we prevent people from reaching this point? Right? Like, A, how do we stop people? Like, how do we prevent businesses from failing? How do we educate founders so that they have what they need to be successful and not be panicked and reaching out and like willing to spend thousands of dollars with the CFO, but like then to learn that they don't have enough time? How do we set people up for success?

6:28And what that transitioned to was launching the Good Food CFO website with spreadsheet-based tools. They were the spreadsheets I was using for my clients. We had, you know, courses, kind of, you know, how-tos that went along with it, and they helped hundreds of brands. But I knew deep down that that was not the answer. Number one, because spreadsheets are scary to a lot of people. And number two is because they didn't speak to one another. So you could come and you can get some education on pricing and you can price your products right. And then you could come back and you could create a forecast.

6:58But or you could like get some financial insights into your business. But they were all really separate and they weren't cohesive. And I wanted to make them cohesive. And for that reason, and some of the others that we discussed already, the software needed to happen. And to tell you the truth, I don't know if I've ever told you this, Kelly. This is like a seven year dream of mine.

7:21Sarah Delevan:I didn't realize that. Seven years. I had, it was so crazy because in the building process, I actually went into my drawer in my desk. I've had this like very like antique desk for several years now. And in the back of the one drawer were the paper drawings of the first sketches that I made of the software. And it was wild to pull that drawer open and look at these notes and go, it's, it's this, it's always been here, but I, the time was right. The tools were right. I was ready to actually put it into place and to launch it this year. Um, it was really fun. So cool. So I have, I definitely want to go more into the, the brand itself, the business, the software, but just for people to understand your background through the lens of what you consider good food and how you've really had your hands in building food businesses.

8:22Sarah Delevan:Can you give us the overview of just your experience leading up to this? And because I think it really speaks to your passion and, of course, expertise, but why this is so important to you to really get give access to emerging brands. Yeah. I mean, I grew up in a house just I'll do this really briefly, but I grew up in a house where we always ate whole foods. You know, my, my mom cooked for us all the time. Food was a really important thing in our lives. And when I moved out on my own, I cooked for myself. I had what would be considered a healthy quote unquote diet, right? American diet. But I struggled with acne for a long time.

8:58It got really severe. I was really depressed. I took all the medications. I could not figure out how to heal my skin. And I met a dermatologist when I moved to Los Angeles who said, you know, your body is different than another person's body. And there's some things

9:12Sarah Delevan:you're putting into it that are causing you to break out. And there were these little tweaks that I made that helped my skin. I simultaneously read the Omnivore's Dilemma, where I learned about the sugar in the American diet and just the structure of the American food system, all of these things. And I don't know where it came from necessarily, but I got the crazy passion that I must be part of the local food movement. I must learn everything I can about food outside of the grocery store. I started working, like volunteering at farmer's market, tasting food, seeing different varieties of like zucchini and tomato and strawberries and these foods that I thought I hated that I loved because I just had never had the best version of it.

9:57Sarah Delevan:Right. I went on to launch a small business with a co-founder where we really like curated all of these foods and brought them to different communities throughout Los Angeles and really just have always had a passion for bringing the best food to people and supporting small brands. And for years, I thought that my role would be as like a market owner or, you know, someone who was curating produce. As a data nerd, as a numbers person, I had spreadsheets that showed me like when the best produce was in season and what farm it came from. But with the closure of my business, I learned that the finances are difficult to make work and that there was a lack of resources for small businesses who had a huge mission, who were successful at selling their products and serving their customers.

10:45But the money wasn't working out. And we were largely in debt. We weren't paying ourselves. There was no path to paying ourselves. And it was really heartbreaking to close the business. When I went on to my future roles, I saw the same things happening in businesses, food businesses that were making millions of dollars in revenue, but still not able to pay their bills. And I had this moment of clarity where I realized that if small businesses are going to succeed, if more good food is going to be available at large in our current food system, small businesses have to be successful. and I was transitioning kind of naturally into a financial role to help the businesses I worked within to be successful.

11:29And when I left my last full-time job, I thought I need to do this as a consultant and help as many brands as I can. And that kind of leads me to also the software because with CFO, fractional CFO consulting, I can help a handful of brands at a time. But I can help thousands, you know, tens of thousands of brands and founders through the software. And that level of impact just feels incredible to me to even think about.

11:58Sarah Delevan:It is incredible. And I'm so glad that you talked about your background because again, it connects the dots of your passion, your dedication, your expertise, learning it firsthand of this genuinely is a pain point. And this is why 70 % of food businesses fail within the first five years and how you created that solution. So walk me through. So you had the consulting, you had the podcast. I know this year you launched the software. What was the moment that you were like, okay, it's time. Like this needs to happen now. And what were some of those early steps that you took to start putting those pieces together?

12:41Yeah. So I read a book, if I might plug a book, it's called Beyond Entrepreneurship 2.0. It's a book that was originally written, gosh, I think a decade ago, and they re-released it. The founder of Netflix claims that he reads it every single year and did so like in buildings. It's a really well-known book I had not heard of until last year. And in reading the book, I started to think, who are we as a business? And for a little while, I thought we were a media company because the podcast felt so important in terms of like spreading the word about how you can do things differently, how you need to build a business on your own terms that you don't need to follow what's in the media.

13:26And it felt like the messaging was the most important part. But in reading that book and really kind of thinking and getting quiet with myself, I realized that we're a financial strategy company. And if we if that's who we are and our mission is to help founders, then we have to upgrade our tools. We have to, in my mind, do better the best we can for founders to accomplish this mission. and again that software idea it was like seven years in the making and I kept shoving it in the drawer and I kept telling myself I didn't want to be a software founder and that wasn't for me and I couldn't do it but then I found myself saying oh if the software was the thing I could make that tool if the software was the thing I could help that founder with that particular problem it became undeniable that the software had to be made.

14:18It also became undeniable that our brand was not what I thought it was. And we needed to get clear on the brand strategy, the brand identity, and you played a huge role, a huge role in getting us clear. And I want to say this to founders who are listening. We were not wildly off base. We knew who we were. We knew what we stood for. We knew who we wanted to help, but your ability to hear that information and reflect back to us this, like what felt like a tiny tweak, but that had massive impact, like, like a raindrop that felt like a tidal wave. You know what I mean?

15:01Sarah Delevan:I love, I love that analogy. Thank you. I'm honored. It was like, everything just started to click. And even the way that we showed up long before the actual rebrand happened, people started vibing with us more. People understood what we were doing. And it was like, oh my gosh, we're on the right track. It kind of felt like a finally after doing this for four or five years and just kind of feeling like we had the right information. I had the right knowledge, but somehow I was stuck in the mud. You helped us get stuck. Well, I am so honored that you brought me into the fold. And I only worked on two strategic partners, I would say for CPG brands this year was bread and butter trademark law firm for CPG food and beverage brands, and the good food CFO financial company for good food brands.

15:57Sarah Delevan:And for me, it was so I got that hit of like, if you're down, I'm down. Because from my position as a brand strategist for pre-launch brands, I see the importance of having founders have a working understanding of what they even have to think about, right? Not even having the answers, but like cost of goods sold, profit margins, these very, very basic things. But when you're a first-time founder in CPG, you're like, I have no idea what I should be asking or what I should be looking at. And so I'm so grateful that you tapped me to be a part of it because I saw how many founders also needed it. And so any founder that I work with, I'm always like, go to the Good Food CFO.

16:49Sarah Delevan:Now there's a software. But I think for you, it's really just that repositioning and then putting all the pieces together so that you can launch this software and it all connected. And also you're crushing it on Substack too. Thank you. I know I love Substack, which is another recommendation you made. I knew you would do well there. And so it's very satisfying to see you crush it. And the podcast and the software, like everything. And I even felt that shift too with your content. It really started clicking and everything was on message and it made total sense. So, and also your visual branding shout out to house of wind.

17:32Sarah Delevan:She did a beautiful job. I'm obsessed. I love it so much. It looks so good. And that's what I always tell people too. Like you could have a good brand strategy, but if you don't do the visual branding piece and the content piece and really going all in, you don't really see it, but you went all in. And I know that's not easy. And I really, really admire how you did it. Thank you. And I do want to do another like shout out to Izzy. I came to her and I said, I wanted color because I, our, our brand was previously very like quote unquote professional, maybe gold white. I always felt that I needed to have a certain look for people to trust me with their money.

18:12Sarah Delevan:Right. But you guys helped me understand that you can be fun and playful and approachable, more approachable to the audience we want to help because approachability is a huge part of what we strive to be. We're jargon free. We don't talk in big financial terms. We strive to literally make every step of this process simple and easy. And so having an approachable website and brand was super important for that. And you guys helped me understand that, but I was afraid of color. I didn't want it to be these colors that came out of nowhere. And I think the coolest part is I got to go back into my work history to photos from my food business that I thought were beautiful that have purple Brussels sprouts and blueberry baskets and all these things.

18:56And I pulled together my favorite photos and that's where the colors come from. So to know on my end, and I've been wanting to share this little tidbit, it's like all those colors are based on food. And I love that so much.

19:10Sarah Delevan:I remember going through your previous website and maybe I did some other sleuthing, but I was finding pictures of you with farmers. I was like, this is it this is the vibe that we need to connect with finance because I would totally trust this person she's literally talking with farmers with building a food business yeah and I thought I always had to keep them separate and you really encouraged me to like be my whole self be my whole brand and I was like oh thank god because I was really struggling to figure out how I talk to people and how you incorporate the history when it feels like that sort of different type of creativity um like how does it fit in so i i totally resonate with that and i understand that because as a strategic partner myself and as a service provider it feels like your past world or past life to this point you have to erase and then start a whole new life but there are ways to weave it all in and again Izzy did a great color the colors are beautiful and even just looking at the software it's nice to look at which thank you is a huge piece of it because whatever you want to call it I need everything to look nice for me to even like pay attention so I just love how the software is also laid out because it looks pretty it makes sense it's like very user friendly you You get great answers.

20:40Sarah Delevan:And I just love how you, again, connected all of those dots. Thank you. You're welcome. The software development was an exercise in trusting myself, really, in like, what should the shapes be? What should the colors be? What should the layout be? Having it be really simple and easy to understand. And then also being, you know, we did an extensive beta testing, a four-week beta before we, so it was like a private beta where we had 12 founders really dig in and use this and give feedback. And if ever there was a spot where it was like, this is confusing or I don't understand this, like we fixed it.

21:22We worked with people to really make sure that this is the simplest tool you can possibly use. And it's just going to get better and better and better over time. But I really appreciate that compliment because it's from me, just like so many founders who have a food product. It's like, this is my dream. This is something I envisioned. And then it comes to reality and for someone to take it in and say, I like this. It just means so much.

21:50Sarah Delevan:Totally. And I know some of the beta testers and they've been raving about it. They're like, thank you so much for recommending this. This is amazing. It's a game changer. I'm like, I know. And I'm so glad that, you know, and now you're going to use it because this is what you need for sure. So walk us through the software as far as because so many founders who listen are in that pre-launch early days. How do they start using it? How do they start applying it? Like, can you walk us through just like the broad overview? you? Yeah. So I'll tell you that the software is structured into three main pieces and it's designed for you to utilize in a very specific order so that you can build on information.

22:37So let's take a brand that's like just starting out, right? Pre-launch, maybe they've got their recipe costs together and they're just trying to get started in understanding the numbers. They're going to start in phase one, which is pricing and margins. If there is one thing that I talked about for the rest of my career, it would be how important margins are to the success of your business.

22:58Sarah Delevan:Yes. Yes, yes, yes. So we start there and it's all throughout the software. There's what we call CFO insights. So it's not like you plug some numbers in and then you're supposed to interpret them on your own. You have insights from me helping you to interpret the information you're seeing on the page. And you'll know right off the bat if you're setting yourself up for a business that requires a lot of investment over time, or if you're setting yourself up for a business that has positive cash flow, which is critical. Because one of the reasons, one of the huge reasons that businesses fail is because they run out of money.

23:42And despite what the media tells you, not everyone is writing checks. for brands, even if they love your products, even if they love, you know, you as a founder, it's not reality for most brands. And also newsflash, there are so many founders that don't want that reality, right? So getting your prices right is step number one. So that's where we're starting in the software.

24:05Sarah Delevan:And also, can you give a breakdown very quickly of why, well, I just need to get out the door. And even if it's not a profitable product, or the profit margins aren't good, eventually it will make sense because I'll be able to increase my production and lower my costs. Can you please explain how that's not a strategy? Yeah. Yeah. Number one, one of the big ones is like this idea that I'll be able to increase my production and lower costs. But I always say to founders, by how much? Right. It's this belief that's in the industry that has been proven to not come true for many, many founders, right?

24:47So that's one thing, like lay that out. But the other thing is that you want to launch with profitable products and not just profitable, but with margins that can actually make you money. Should I share the 50 % margin thing here?

25:01Sarah Delevan:Okay. So when you sell a product with a 50 % margin, what you're actually doing is making just enough money to make one more unit of that product. no money to cover your operating expenses, no money to pay yourself, no money to pay anyone on your team other than the folks that are making that one unit of product. If you're selling a product with a margin under 50%, you have not earned enough money from the sale of that product to make another unit. So you immediately need to borrow money to make your next unit. And that's a situation that we find most young founders in that we're trying to break.

25:40If you sell a product that has a higher than 50 % margin, let's just say it's 55%. The 50 % is as much as you need to make one more unit. Then you've got 5 % of that revenue to do something else with. Cover your operating expenses, invest in growing your production, you name it. It is critical in the early days to make sure that you understand your margin and understand that cash impact for keeping your production going.

26:10Sarah Delevan:not even growing it but just keeping it going going yes yes yes yes this this became like the thing I talk about most because we got this really heartfelt email from someone who said I knew it was going to take a bunch of money to to set up the brand and the marketing and get the production set up but then I thought once I started selling my products which are profitable but they had a margin below 50%, I didn't understand that I have to keep borrowing and investing to continue my production, let alone grow it to the point where I could pay myself. Mission critical number one for me is not having any other founder need to type that email.

26:56Sarah Delevan:Yes. And because if they don't have to type that email, then they're on their way to not being one of the 70 % of businesses that close within the first five years. So well said. I'm so glad we got this on the podcast because this is again, why we have the podcast to share this information to really get this information on the radar sooner than later. Yeah. And that's why pre-launch brands, like why we're really leaning into that with our branding and with the messaging around the software, because even if you just get into the software and do that work and understand what your margins are and the impact of that, if you get in there and you're like, oh gosh, in wholesale, my margins would be 35%.