Strategic Planning: Tips To Accelerate Your Food Business’s Growth
Most business owners understand that it takes focused strategic planning to grow their businesses, something we wrote about a few weeks ago, but many aren’t sure exactly where to begin. Implementing business-altering improvements can seem daunting, and the challenge is amplified when there isn’t a clear starting point.
Thankfully, getting started doesn’t have to be an all-or-nothing, head-first dive. Even small doses of strategic planning goes a long way, and as you experience the rewards of those first few careful actions, you’ll gain the boldness needed to take your business growth to the next level with even more significant improvements.
Let’s discuss some practical ways you can accelerate your food business’s growth with strategic planning and actionable improvements.
Start Tracking Your Key Performance Indicators
It’s no secret that measuring performance is far less interesting than actually making changes that improve performance, but setting up metrics is a key part of building your business with intention and focus. Once you have a strong, data-backed sense of how efficient your business is in various areas, you’ll be able to make calculated efforts that have measurable results.
Here are a few key performance indicators (KPIs) we suggest tracking with as much precision as possible.
- Margins: You should have all the information needed to calculate your margins, so if you haven’t already, turn it into a number for each product and track it over time. Once you have this figured out, you’ll be able to see how individual changes impact this KPI.
- Food Safety: This one’s pretty open, but there are a few things you should track at a minimum: (1) how frequently food safety issues occur, (2) which production steps have the most food safety issues, and (3) how much product we would lose in the event of a recall. With these measurements, you can clearly see how production adjustments improve food safety.
- Spoilage and Lost Product: Determine the cost of loss product per week or month so that you can tell what adjustments best optimize shipping, receiving, and other departments.
- Time To Traceability: How long does it take you to trace a product, from source to destination? Can you quickly identify where a random ingredient lot is from, what products it is now in, and where it’s gone? Time yourself a couple times per year. As you start to improve traceability, you’ll be able to see what changes make the greatest impact.
“Great KPIs are “SMART” – specific, measurable, achievable, results-focused and time-based. By using these five criteria to evaluate KPIs, people can begin to assess which need to be reconsidered, replaced or removed.” – Howard Hillman
This is by no means comprehensive; overall equipment effectiveness and machine downtime are also great things to keep an eye on. Once you’ve collected a few weeks or months of data, either by taking manual notes or having records sent to a central hub via IoT sensors, you should be able to see the places where you most need improvement and continue taking the step into strategic planning.
Establish Short And Long-Term Goals
Strategic planning requires that you schedule a couple days to pour over your data. This is where working on your business and not in it is very important. You need to be able to dive deep into the mechanics of the business so you can create a focused strategy.
Define clear short and long-term goals for each KPI. It’s okay to start small, but don’t be afraid to dream a bit. For food safety, this could mean reducing issues by 10% in the next year, and 30% within five. For margins, it could be lifting your lowest-margin product by 10% in six months, and 10% across all products within two years.
Ultimately, you know your business, and the more insights you can draw from your data, the more easily you can create goals. Write these down. They will be your guide for the following months or years. You now have the bones of your strategic plan – it’s time to flesh it out.
Create Action Steps To Meet Your Goals
The fastest way to kill a road trip is to never really get around to planning it, and the same is true for business goals. You need to map the journey, discover the landmarks you need to look for, and schedule in some time for introspection along the way. Take your goals and start brainstorming the individual steps they’ll require to make them a reality.
Here’s a sample roadmap for optimizing food safety and reducing errors by 10% in the next year:
- Run a trial audit to measure the training of staff, their familiarity with food safety protocol, and the efficiency of systems in place. Due Oct 25.
- Communicate to the team how improved food safety will reduce stress for everyone, as well as improve the bottom line. Make it a core value. Due Nov 10.
- Digitize food safety plans, cleanup procedures, and regular food safety checklists so the entire team can insert data and track progress from any device. Due Jan 25.
- Setup IoT sensors that collect data and auto-send alerts when food safety hazards may be approaching, like faulty refrigeration or irregular humidity. Due Mar 25.
- Implement software like Icicle that can create detailed traceability records for every ingredient, material, packaging material, and product and act as a central data hub for food safety. Due July 10.
- Run a trial audit to see how the adjustments have improved food safety and reduced issues. Due Aug 25.
Go into as much detail as you need to stay focused with direction. Digitize your notes and set reminders that keep you on track. Take the time you need to work on these action steps and don’t let the pressures of working in your business rob you of the rewards of working on your business.
And here’s the good news: there are some food manufacturer-specific tools making it easier and easier to optimize food safety and other areas of your business. In fact, you can start seeing results in as few as four weeks.
We’ll divulge the specific tools that can help you get there fast in our upcoming blog on strategic planning. To receive an alert when that blog goes live, sign up for emails here.