How SKUs Drive Business Strategy

Challenge

GrowthLab and team worked closely with the management team of a national, high-growth beverage company which successfully exited in 2018. One of the founders transitioned positions and was now working as Chief Expansion Officer (CEO) at an emerging-growth, consumer packaged goods company with a focus on health and superfoods. The CEO came to GrowthLab needing some guidance around financial modeling during a hectic due-diligence period. 

The main challenge this company faced was the gathering and clean-up of historical data to drive strategy in order to create a long-range plan used for this due diligence. GrowthLab began dealing with a messy assortment of different documents, sales reports, inventory reports, and financials that, unfortunately, didn’t tie together. As we all know, without proper historicals, it is beyond difficult to create a solid forward-looking plan. Our main goal was to not only clean up the historicals, but to then use those historicals to build a forward-looking financial model to use through due-diligence and scaling. 

Solution

GrowthLab worked both on the accounting side and operation side with the company's management team. The first step was to help them organize and process all of the historical data in order to connect the dots between different SKUs. This is one of the most important issues when dealing with multiple-SKU companies. Are you able to connect the dots between inventory, sales, purchasing, and so on between SKUs? If not, you’re missing some extremely valuable data.

Following this, we worked on higher-level strategy with the company to figure out what the story is that they were trying to create. What is your end goal? What does it take to get there? What resources do we need to build for? By finding out where they saw the company currently, and where they would like to see the company go, we were able to help them formulate the resources needed to achieve those goals. 

Results

The company was able to walk aways with not only a financial plan that helps them through their due diligence, but also with tactical steps needed to achieve their goals, along with much cleaner data for a go-forward basis. Our goal was to guide them along in the process, so that they understood the “why” behind each step. All too often, we find companies coming to us with a model that they can’t even begin to understand.. and this was not the case here. They successfully used the model and were able to use our team as support along the way of the due diligence process. 

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.