BABOYOT with Harvest Chocolate: Turning Chocolate Passion into Data-Driven Profit
(Listen on Apple or Spotify. Full transcript below.)
As a food business consultant, I'm always on the lookout for founders who are not just making incredible products, but who are building financially sustainable businesses on their own terms. That's why I was thrilled to welcome Matt Cross from Harvest Chocolate to the podcast this week to talk about his data-driven profit.
From Michelin Stars to Michigan Chocolate
Matt and his wife Elizabeth bring impressive culinary credentials to their bean-to-bar chocolate business in Tecumseh, Michigan. With a decade of experience in Michelin-starred restaurants across New York, San Francisco, and Chicago, they've applied their culinary expertise to chocolate making—but with a crucial difference from many food founders I meet: they've prioritized profitability from day one.
"We've always pushed hard to be profitable from the very beginning," Matt shared during our conversation. "Unless there's some reason not to be profitable, I don't know. That's not what we're trying to do. We're trying to make money here."
This refreshing perspective caught my attention during our CFO Office Hours session, where it became clear that Harvest Chocolate was doing many things right financially.
Why Financial Clarity Comes Before Growth
What impressed me about Matt's approach is that before focusing on aggressive growth, he wanted confirmation that his financial foundation was solid. During our CFO Office Hours, we examined his profit assessment, which revealed:
Healthy profit margins well above 50%
Controlled operating expenses
Consistent revenue patterns across multiple sales channels
This financial clarity gave Matt the confidence to focus on strategic growth without worrying about fundamental financial issues holding the business back. It's exactly what I encourage all food founders to establish before pursuing expansion.
Simple Revenue Forecasting That Actually Works
Once we confirmed Harvest Chocolate's strong financial position, we created a straightforward revenue forecasting approach that any food business can implement:
Calculate what percentage of total revenue comes from each sales channel
Set a reasonable overall revenue target (in Matt's case, doubling revenue)
Distribute that growth across channels based on profitability and strategic priorities
This simple process helped Matt identify which revenue streams deserved the most attention based on both margin and control. Rather than chasing growth in all directions, he could focus resources on channels with the highest return.
Letting Data-driven profit Guide Daily Decisions
My favorite insight from our conversation was how Matt implemented automated data tracking to support decision-making. Using a tool called Report Pundit, he now receives weekly reports showing:
Channel performance against goals
Product sales by item and channel
Cost analysis by channel
"What we found is that whenever we expand our product line, we sell more," Matt explained. "So the fact that now we have the data to show that we sell more when we expand our product line in the store and online, and we make the most money doing that... now we've got more products."
This data-driven profit approach eliminates the guesswork of "I think this product is selling well" and replaces it with certainty—exactly what you need when making decisions about where to invest your limited time and resources.
Building Your Business on Your Own Terms
What I love about Harvest Chocolate's story is how Matt and Elizabeth have created a business that aligns with their values while maintaining financial sustainability. They're not just making wonderful chocolate—they're building a business that works for them.
As Matt put it: "My longer-term goal is so that I don't have to work as much. We make more money and work less."
Isn't that the dream for all of us food founders?
Want to Hear More?
If you're a food business owner looking to strengthen your financial foundations while growing strategically, you'll want to listen to the full conversation. Matt shares more specific insights about:
How to approach product expansion strategically
When (and when not) to hire for marketing positions
The value of understanding your numbers before making growth investments
Listen to the full episode here to discover how you can apply these principles to your own food business.
___________________________________________________________________________________________________________________________
Episode Timeline
00:00 Introduction to the Podcast and Goals
06:51 The Journey of Harvest Chocolate
12:55 Insights from Office Hours and Profit Assessment
18:00 Sales Projections and Growth Strategies
26:29 Navigating Retail Challenges
29:45 Revenue Growth Strategies
32:14 Expanding Product Lines for Profitability
35:22 Data-Driven Profit
40:14 Understanding Sales Dynamics
45:02 Hiring for Growth: Timing and Strategy
Full Episode Transcript
You're listening to the Good Food CFO podcast. I'm your host, Sarah Delevan, and with us as always is our producer, Chelsea Stier. Chelsea, what are we sharing with folks today? Hey, Sarah. Listeners, we have got a brand new book club selection that we're going to be announcing. And Sarah, we're actually going to hear a conversation that you had with Bean to Bar chocolate co-founder, Matt Cross of Harvest Chocolate.
But first, Sarah, I have to talk about our big goal here on the podcast. As you know, our goal is to reach 1 million food founders. And there's a couple of ways that you can help us listening at home, at work, in the car, on a run, whatever you're doing. Number one is to share this episode with anybody that you think will find it beneficial. Number two, leave us a rating.
And then the last way that you can help us, especially if you're listening on Apple Podcasts, is to leave us a review. We love reading your reviews. We love sharing them here on the podcast and giving you a shout out. So please do that. Okay, Sarah. So today, as I mentioned before, you're sharing the work that you did with Matt Cross. Yeah. So Matt, as you mentioned, is the co-founder along with his wife, Elizabeth.
of Harvest Chocolate. They spent years working in fine dining. They worked in San Francisco, Napa Valley, Chicago, New York City. As he was listing the names of the cities and the restaurants that they worked in, it was amazing. They worked in top Michelin star restaurants across the country.
Elizabeth on the pastry side and Matt on the more savory side of the kitchen. But when they felt like something was missing, they moved back home to Michigan, which is where they are now, and where Harvest Chocolate was born. They studied chocolate inside and out. They, you know, really wanted to understand the craft traveling to different cocoa origins and developing their passion for bean to bar chocolate and thoughtfully sourced cacao.
They started in a home kitchen like so many good food businesses do and slowly grew from there. And now they've got a beautiful retail shop in their hometown. And we talk about, you know, what those early years were like. And also, you know, during CFO office hours, which is where we worked together, we really looked at sort of where do we go from here? And as we've been talking about quite a bit here on the podcast lately, Chelsea, it started with
a profit assessment. Matt did it on his own via our course and brought his results to office hours. And from what I understand, he had done it once before and then did an updated version and brought that here. And what we realized together and looking at the data was his company was in a really strong position. They had good margins, their operating expenses were under control.
along with some other things, they were in a position to grow their revenue, which is not always the case for every business. And we won't dive into that today, but it was the case for him. And so then we got to spend time on projections, which I know can be a very scary thing for a lot of founders. And so I wanted to invite Matt here to talk about his experience as a whole, but also what it was like to make sales projections, how we went about it together.
And then the next steps that he took from there. Yeah. And I loved listening to that part specifically where you talked about like how you developed those projections, those sales projections, because it felt like so simple to me. Yeah. Like you just took this basic data and then translated it into future sales and it seemed so easy. Yeah. And I think we talked about it on the episode, like there's a little bit of trial and error in it too, right? Like you might use the...
the method that we're using and go, that seems like too much. You will have a gut instinct, you know what I mean, after you make your initial projections and you can adjust from there. you know, as we did with Matt. And so, yeah, I think it's a really interesting thing that I wanted to talk about, especially, again, knowing that so many founders get overwhelmed with projections. We also talk about some reports that Matt has set up for him and his wife in the business and the surprising effects that it has had.
for them. And then one of the things that you and I talk about loving so much about office hours, and we hear this from members all of the time, is the ability to hear from others in the group. So it's a small group, no more than four people at a time. And in this case, Matt was actually able to provide some really insightful, I'll call it marketing advice to another founder. And because, without spoiling too much, because it's a common sort
question that I hear, I thought that's another thing that Matt can add to the conversation and share with a wider audience as well. There's so much I love to share about office hours here and there on this podcast, but sometimes it's just like, okay, I want to have the founder on. I feel like it'll be most impactful and helpful to have them here. I was delighted that Matt said yes and joined us for a conversation. Yeah, I thought it was a really, really good conversation.
You know, if you listen to this episode and you feel like, CFO office hours might be the right place for me, please do check out our website. You can go to the goodfoodcfo.com and just click on coaching and make sure that you get on our wait list. We are pausing office hours for the summer at the moment, but get on our wait list and then that way we will notify you as soon as we're ready to come back. Yeah, exciting. Okay, Sarah.
So before we get to that conversation with Matt, I did make a promise at the top of this episode, and that was that we are getting a book club announcement. Yes. I'm excited about this book club selection. I think we've shared before why the book club exists and what we hope to accomplish through the book club in addition to connection. It's continued education, right?
So sometimes there are books on finance specifically, sometimes there are books on the industry, sometimes there are books on, you know, self-development and understanding ourselves better and how we operate within our businesses and within our industry. This book club selection is a little bit different, but ultimately I think like meets that same goal. It's called The Mom Test and it's by Rob Fitzpatrick. It's a fun pink book.
It is a very brief read, which is why we are selecting it for the summer months. We know kids are to be getting out of school. We know that summer is just busy in general. And so this is a skinny book, a light read, but a very impactful read. It is essentially a book about how to talk to customers and learn if your business is a good idea. And this sounded very basic to me, but
When I tell you that it changed my mind about how to talk to customers, potential customers, it really truly did. So I don't want to give too much away, but I think that one thing I will say is that, you know, if you ask your mom, if you ask your partner, if you ask your friend, if they think that your product is good, if they think it's a good idea that you launch their business, I think...
more times than not, you're going to get a positive response, right? Because people don't want to hurt your feelings and people want to be supportive. But that's not going to translate necessarily into a business that is financially successful. It doesn't mean that you have a viable product. So you have to dig a bit deeper and to do that, you have to ask the right questions of the right people. So this book really walks us through the process of
how to ask questions, how to not lead people in a certain direction unknowingly that's going to give us a response that makes us feel really good about what we're doing, but end up not being beneficial to us in the long run. I think that what is going to be really fun is that when we get together for our book club events, that we can actually practice this with one another. I know that as I was reading the book,
I have lots of earmarked pages, I've got several underlines, and I was starting to formulate, how can I talk to founders to really get to the heart of what their biggest financial struggles are, what their biggest roadblocks are? Because I create tools based on the needs of the clients that I have, right? And so when I created a tool for them, I then translate it to the Good Food CFO and make it available for everybody.
my list of clients is really small compared to the number of founders that are out there, right? And is such a tiny selection of people with so far a pretty specific subset of issues that they need support with. So finding out that there's a way to talk to founders that can help me better understand how to help them felt really...
Great. And I want other founders to have that feeling. I also want people to have knowledge, the knowledge that's in this book about how to identify if you're really meeting the need of someone, right? Yeah. And I would even say like to feel confident. Exactly. That you're meeting the need. Yeah. And that translates directly into financial success in that if you have a product that is solving a true problem.
If you have a product that is available where your customers are going to shop, if you have a product that has messaging that speaks to your customer based on the information they've provided with you, lots of financial things start flowing in the right direction, Everything from your product actually selling to your marketing dollars creating a return on investment. I the list goes on and on. I mean, I could go on and on, but I think
I was surprised by this book. I shared that I was reading it on Instagram and so many people in the stories were like, I've never heard of this book. And I was like, all right then, there's interest in this. People have not heard of it. I'm really digging it. So it is officially our book club selection. And so just once again, it's called The Mom Test and it's by Rob Fitzpatrick. That's awesome. I can't wait to read it. If you listening also cannot wait to read it.
check it out in our bookshop. We're going to have the link to that in the show notes. and you can also always go to our website, the good food, cfo.com and click on book club and find the link there as well. And then Sarah, we're going to be getting together in July, Wednesday, the 16th to talk to founders and have exactly that conversation that you talked about, right? we'll talk about what we took away from the book.
Maybe we'll get a little practice time in. think that's a really great idea. And that is going to be happening at 9 a.m. Pacific. That's 12 p.m. or noon if you're on the East Coast like me. And again, you can go to the goodfoodcfo.com and click on book club to RSVP for that event as well. Chelsea and I just want to remind everybody that shopping from our bookshop directly supports both this podcast as well as independent bookstores around
the country. Yeah, exactly, Sarah. Okay, so what do you say we get to your conversation with Matt? Yeah, let's do it. Hey there, it's Sarah. If you're enjoying the podcast, I want to invite you to become a BABOYOT member. It stands for building a business on your own terms and your membership directly supports the continued production of this podcast and helps us reach our goal of supporting 1 million food founders. As a member, you'll get access to our live coaching events,
Have your brand featured right here on the podcast. Be the first to test our new tools and receive a 10 % discount on all of our tools and services when you choose an annual plan. Join fellow successful founders at the goodfoodsfo.com slash BABOYOT. That's spelled B-A-B-O-Y-O-T. Together, we're changing the way that food business is done. Now back to the show. Hey Matt, welcome to the podcast.
Hi, Sarah, happy to be here.
I'm so happy that you decided to join me. You agreed to. As we'll talk about in a little bit, you were in Office Hours recently. You taught me and really shared some valuable information with another Office Hours member, which I thought was just amazing. And the work that you did in Office Hours I thought was really interesting and valuable. So I thought it'd be an amazing opportunity to have you here to talk a little bit about all of that and share it with our wider audience. So thank you for
you know, kind of donating your time, if you will, to us.
Yeah, absolutely. I think one of the things I wanted in office hours was to kind of hear from other food business founders. And we got that of just three people who are doing different things, but all very similar and in a lot of ways, too.
Yeah, yeah. Well, why don't we kick things off by talking a little bit about Harvest Chocolate? Give us the backstory, if you will, and what you guys are up to now.
Yeah, so Harvest Chocolate, we're a bean to bar chocolate maker in Tecumseh, Michigan, which means that we source whole cocoa beans and roast them and grind them into chocolate. It kind of reminds me of the early days of like crack beer or like crack coffee in the way it just kind of the nature of like the market and the businesses in here and the people, a lot of them have come from those kind of places. But my wife and I, we started this.
Four years ago, maybe five years ago, we both worked in restaurants. We have culinary degrees. We spent probably about a decade in like Michelin star restaurants just kind of bouncing around like most of those kind of cooks do. So we worked in New York and San Francisco and Chicago, eventually settled down here in Michigan. It was supposed to be temporary and it was about 10 years ago. So my wife's been really the one who kind of brought us into the chocolate.
side I kind of gave up food for a while I said no more I've had enough but she kept working in it and kept working in chocolate and so she has definitely the one who who brought the knowledge and expertise and how to do this and I was like wait this is way cooler than what I'm doing and that makes people happy and everyone loves chocolate so like let's do this
Yeah. What did the business look like when you launched four years ago?
It was out of our kitchen, our house. It was during the pandemic. We had kind of been talking about a business for a long time. Elizabeth, my wife, was working for another business, ended up being the only employee. And we were just like, don't we just do this for ourselves, which kind of famous last words. So we started just making chocolate at home.
Like she already knew how make chocolate, so it wasn't like a learning from scratch. But making chocolate at home and under the cottage we bought in Michigan and selling to people at farmers markets and texting our friends and family and getting them to buy it. That's it. That's the earliest was that. I had a packaging on the kitchen table.
Yeah, I know that life. So I think if people are watching on YouTube, you can see there's a person, maybe that's your wife in the background. It is. In your store. So when did the store come to be and how has that been for you guys?
She's stopping the show.
So we've been great. Originally, we didn't want any sort of retail. We just wanted like a workshop in the woods where it was beautiful and like everything was perfect and we would just hang out there. Turns out that the best marketing that you have as a chocolate maker is making chocolate. It smells great and people love to see it and it helps people understand like why we're different than more commercial chocolate that's available. So it kind of came about about three years ago.
We moved into this space out of a commercial kitchen. were in for like a year after we moved out of the house and another business wanted to bring us in. They wanted a chocolate maker in this space. It's been chocolate or ice cream retail in this location for like 50 years. So that's kind of fun and that like people just kind of walk in and don't realize that anything's different. So we were sharing the space. They left about a year ago.
wow.
And we took over and we opened last May with this retail space ourselves. And it's been great. It's been, I didn't really expect it, but it's kind of, it's kind of fun.
I love that. So you just reminded me of something when I'm going to talk a little bit about office hours now and some interesting things that we talked about that I think will be also interesting for our listeners to hear. when you… Do you remember your goal or objective?
Did you write it down? did. No, it was something like just simple. It was just kind of like, I want a plan to like go forward. Like it was, I bought the class, it was like in December and I bought it for February because I was just waiting. I wanted the holidays to go by and then one more month just for good measure. And then we did February.
And it was really just kind of like, just wanted to kind of take a look at what we have, what's going on and having done anything other than just keep up with the books and just have an idea of what to work on for the year.
Yeah. What I do remember is that one of the first things we looked at was your profit assessment. We talk about that quite a bit on the podcast, I think, these days. But just to remind folks, it's our way of taking the profit and loss statement and sort of boiling it down into what I think is the most important and helpful information for you to see what's going on in your business. Generally, when I'm looking at it, I'm looking for what are the revenue
patterns? You know mean? Are things kind of all over the place month to month? Do we see seasonality? Do we see consistent growth in revenue? So what do we have going on on the top line, if you will? Then we go down to gross profit. That's an extremely important metric that we look at. So is it above or below 50 %? And what can we learn from that? Then we look at cost of goods sold. Where are those sitting, right? Do we need to change anything in regard to our margin? And if so,
which part of COGS can we tackle? And then we look at operating expenses. Okay, how much of our operating expenses are being covered by our gross profit? Do we have a shortfall or are we bringing in enough cash? And sometimes there's problems all along and sometimes there's just sort of problems in one area or another. Yours didn't really have any problems. And when that happens, we say, okay, your margins are good, your operating expenses are
you know, consistent and, you know, they don't seem, you know, out of control or inflated. The advice there is, Matt, it looks like you can focus on growth. It looks like you can focus on selling your product because everything within the business appears to be working well. And so from there, I recall doing really focusing on sales and asking the question, like, where do you want to drive growth? And the thing I do have
in my notes is that you were like, I'm not 100 % sure. Obviously, we want to grow revenue in the store. It's still fairly new, but what else should we be doing or where do we go from there? Is that track? Does that seem right?
Yeah, absolutely. And that was super great to hear just like, hey, like, another person telling me that, like, hey, you're doing good because, you you put the kind of. Guardrails in place in terms of, like, pricing and costs and stuff, and then you just got to run it and see if it works. And so I saw it's always comforting to hear that, you know, hey, the wheels aren't falling off. I had done a profit assessment to myself, like.
Yeah.
a year, I think the year before. And it caught a bunch of mistakes that I had in my bookkeeping. So that was good in that then I spent a while going back and fixing all of that. And but at least now I have clean books going back all this time.
Yeah, that's great. think that's – I've been learning things that people use the profit assessment tool for, which is really fascinating. So we do a profit assessment on the Sarah Delevingne consulting side. And step one is me combing through people's QuickBooks so that when we put it into the profit assessment, I have confidence that everything is where it's supposed to be and all of that. So it's nice to hear that doing the DIY version, taking your report
for like from QuickBooks and putting it in, which is like literally a copy paste, but can help you actually see those issues as well. That's great. And I'd never heard that before. So that's, I'm very excited about that.
Yeah, I forget what it was, but there's something just clearly looked really wrong. It went back to I switched from put those sex up to put folks online. Right? And those were the ones that were were messed up. So, yeah, now it's fixed.
Yeah, that's great. The other thing that someone has told me that they do with the profit assessment is they use it as a projection tool, which I just learned that last week and that really excited me. So I'm going to kind of dive into maybe making a video or something to help people create a really simple version of a forecast. And that's sort of what you and I did as a next step. We didn't use the profit assessment, but because
We knew we were going to focus on growth and there was that question of where do we grow and maybe how much. What I recommended was like, let's just do a forecast of revenue. Let's not try to tackle because you had said to me, I have the forecasting course and I can work through that. My recommendation to you was like, that's great if you want to do that, but for the sake of office hours and getting something out of it here, let's just focus on…
the sales projection. This seemed very simple to me, but I remember you being like, this is helpful. I wanted to talk about what we did there. You had a report from Shopify, I believe, that had your sales by channel in in revenue dollars, if I remember correctly. It was for the last 12 months or maybe 2024 as a whole.
And what we were able to do there is simply calculate the percentage of total revenue that each channel brought in. So essentially if, you know, let's just say retail sales were 10,000 of a total of $100,000 in sales, that's 10%, right? Then you continue to do that math for each of your channels. And then, so A, that like can provide a light bulb moment for some people to go, oh, I didn't, like, I can see the numbers, but those ratios just kind of helped me think about it.
in a different way. Then from there, the next step was how much do you hope to make this coming year? I believe you said, want to double our revenue. I like, okay, and I'm making up these numbers, but if we started at 100,000 and you want to double, that's 200,000. Then it's like, where do you want that growth to be? Most people say,
I don't know. You know you want some to be in the store, but the next question that people have is like, but what's realistic? What should I forecast? And a great place to start is just to use the percentage, the sales channel percentages that we just calculated in the future projection. And I remember you saying, I like this. This makes sense. Can you talk a little bit about that and maybe what it was like from your point of view?
Yeah, I mean, we've built this from the beginning to have multiple to sell through multiple channels intentionally to just be more flexible. I mean, take the example of like, coven, the people that didn't have. Online stores or anything built out had to start from 0 where we've got a lot of, you know, we can move across online selling wholesale through to retailers and then in our own store.
So kind of depending on what needs to be done, we can move across those channels. And it's great for a rainy day in town and nobody's coming out. You know, we can do just as much business just through wholesale and online as we may have done in the store that day, which is always kind of surprising. You know, sometimes you're, don't always know exactly how things are moving across them. So being able to see my channel is super helpful in that like.
You know, I mean, I have like, you have an idea, but then we're seeing the numbers of okay, the online is this percent and in storage is percent. think it's. I think we're like 50 % in store and then 25 % online and 25 % through retailers. And then the next question is that I like that we went through is that how much, you know, what are your costs of goods and what are your expenses to sell through those channels? And obviously retailers were was the lowest.
And then online and in store kind of roughly the same. And so it just makes sense to go after where we have the most control, where we get the most amount of money from it. Retailers are fickle and tricky. And even if your product's selling the top selling product in their store that year, you might not be getting reorders, which is something that happened to me. And I don't understand it, but.
It's just frustrating, right? So like, just being able to control what we can do is, think where we feel comfortable and then the numbers back it up. And that's super great. And then the other thing too, just like the forecasting is it's always just, you never get it right and never can. In between my food jobs, I worked in sales and marketing and did a lot of sales forecasting and it's even the big companies are just throwing dikes at a wall really.
I'm just saying that for everyone because I know how difficult, know, I don't know how to do this, but I like to, you know, we were talking about like, that's your goal, like say before the end of the year, but you don't have to wait till the end of the year to start like, oh, I didn't make it. Like you can adjust along the way. And if you have the right, you know, if you have the reporting in place and you're monitoring it, you can start making adjustments quicker instead of just waiting and hoping that it all works out in the end.
Yeah. Yeah. I love that you bring that up because I do – I think I said this was a while ago when I had Felice Thorpe on, we were talking about forecasting. It like, you get your forecast 100 % correct, quit your job, go to Vegas. You have the best luck in the world. You don't need to be running a food business. So it's not about getting it right. It's really about thinking through the process, thinking about, we are in a position in your case that we can
grow our revenue and it will lead to positive financial outcomes. so what are the channels we want to do it in and how much growth do we need to have to hit our target? So using this sort of made up $200,000, you might, someone might look at the numbers and go, oh, if we were maintaining 25 % of sales, like in wholesale at that 200,000 mark, that's
a lot of wholesale. I don't know that we want to put the manpower or be focused on reaching out to new… We would need new stores. Maybe we don't want to go down that path. You could see that and go, you know what? I'm going to adjust my percentages for how I want this to go this year and make those my targets and my goals. Alternatively, you might say, this has happened with a client of mine. Our store
sort of maxed out at the amount of revenue that it brought in last year. Like we can't possibly ring up more people. So then what that did for her is go, but I do want to keep 50 % of my revenue from my store. So what are the actions I can take to make that happen? I can increase my average order value. Okay, how do I do that? What are the things that I can bring into my store or, you know,
offer to customers that can actually help make that happen because I can't make more room in my store to be able to serve more people and also I can't guarantee that more people are going to come. She has a super seasonal business. So working through the process, just looking at the numbers might make you go, yeah, this is great. These are the goals I want to tackle or hmm, that feels off for us and so we're going to adjust it or now I understand that we have limitations.
in reaching that goal, what can we do to change it and actually give us a fighting chance of actually getting there?
Yeah, and what it helped with us is like a few ideas that we had that we like, you know, wanted to be doing, but didn't, but it gives you that like, no, do that because that's working and it's going to. Make you more money than anything else you're putting your effort into, which has always been something we've we've tried to focus on a lot and that we're paying, we're putting our efforts in the right place. I've always maybe I've heard too many horror stories on this podcast of.
people who grow, but they really aren't growing and not making money while they're doing it. So we've always pushed hard to be profitable from the very beginning, which is, know, we don't, unless there's some reason to not be profitable. I don't know. I don't think that's, that's not what we're trying to do. Trying to, trying to make money here. So one of the things that we have been talking or needing to be doing more about was, events. So we do chocolate tastings here in our shop. People really love them. They're popular and it brings people from like,
with like, you know, like an hour or two away, we've people to driving from, which is just awesome. And then they have a good time in the town because it's like cute and there's other things to do. So we hired somebody to run events for us to do more of those, to bring more people in the store. So that's a great one. And then we were already working on like some expanding our product line a little. and then we had talked that you had done this with, and maybe it was the same client who was like kind of maxed out in the store and needed to make some more money. So.
started making more products, we just repurposing kind of the same ingredients that we have and a lot of the same packaging ish. like we're not, it's not a big project to find new ingredients, make new stuff. get new packaging, buy in bulk. We're just kind of reusing what we have and just getting things out there. But what we found is that whenever we expand our product line, we sell more. the fact that now we have...
the data to show that we sell more when we expand our product line in the store and online. And we make the most money in doing that. now we've got more products. We like kind of just stepped on that more.
Yeah. Yeah, you're right that you have a good memory because something we were talking about was for that other client I'll share, they were buying things to resell in the store, but some of them were things that they could make in-house and the margin, you know, after doing the math, the margin is higher on the made in-house product. And so that was a conscious decision to, you know, make the product in-house. And so maybe the
the revenue dollars weren't going to go up, but the gross profit dollars were on that product, which is also a big win, right? Because that equals more cash in the business in addition to adding brand new products to the product line. So yeah, they did a combination of both things, which I think you're also kind of doing as well.
Yeah, we found that like, so we carry other products as well. One, just because we like them and we want them here so that like we can eat them and I don't have to drive to go to the stores and sell this stuff. So like there's that reason, but also they're just good products. And like, it's nice that we can support like other food businesses and sell their product here and give them a place to sell. And it increases the check average.
with that. like with chocolate, there's just so many different products that people have had throughout their life. Like, and there's no way you can ever possibly make everything to satisfy everybody's memory of the thing that their grandma used to have for Christmas. So there's just things that we just don't or can't make. So we brought them in from other people. But what we've been hearing from our customers is that they're like, wait, but you don't make this stuff, but you make this stuff. Well, I'm going to buy yours because we want to support you. And it's like, well,
That supports us too, if you're buying the thing that's here. Like we already bought that. Like we make some money on it. So instead of fighting that, we're just listening to what our customers are saying.
Yeah, that's really interesting. It's kind of nice too. It is nice. We're in your store. We want your things. It's kind of like going to you talked about craft breweries earlier. like you go to a brewery. like, want what you're making here. I don't want maybe something you brought in to make sure you have something for every pallet. want you want to try your stuff and buy your stuff. So with the revenue forecasting and something you mentioned is
it's meant to be targets, right? And so we went through the process of sort of forecasting based on percentages of total revenue, looked at that and said, okay, does this make sense for us, the areas we want to focus on, the margins we want to achieve for our business? And then the next step, which is still playing out for you is, as you mentioned, monitoring. How are we doing in relation to the goals that we've set?
Looking at your revenue on Shopify in-store with wholesalers at the end of every week is so valuable because you – and not just looking at it, but looking at it in comparison to where are we supposed to be. One of the things we do with a lot of our clients is we send them weekly updates and we say like, okay, you're at 25 % of your spending budget for the month and it's week one of four. So you're right on target, right? If you were at 50 % of your spending budget,
Speaker 1 (35:52.468)
know, after the first week, okay, maybe we need to take a look at this and say, is going on here? Similarly with revenue, if you're on track at 25 % of your revenue goals per channel at the end of week one, okay, we're on track. But if you're at like 10%, you have the opportunity to say, what's happening here? Just the kind of focusing online is like, are people coming to the website? If they are coming to the website, is our conversion rate down? Like, what is happening
in our process, in our systems that people are not buying at the rate that we predicted they were. One of the things I absolutely want to talk to you about today is a tool that you started using and I'm looking at my notes here. It's called Report Pundit. There are other types, I think, of reporting services like this. This is the one that you use. I think it's valuable to share with people. They're not a sponsor of the show or anything like that.
But you started utilizing them. Can you tell people the kinds of reports you started out with and then we can kind of dig into the value that they're providing you guys?
Yeah, so kind of came from a suggestion from Sarah to monitor our class of goods very closely, like, on a weekly basis and also just how we're tracking towards the goal. So I was like, oh, shop, but it's got all this data. I'll just, you know, open up this analytics tab here and I should be able to create some reports. No, I did. I did not do that. So I like, well, let's just check out an app and see if there's something I'm sure that we're not the only one that sells like this using Shopify.
And I just downloaded a report, or got report pundit for, I don't know, I didn't even do that much working to it. So check out if there's something else that you need to, but it's been great so far. It's like under $30 a month. And so now we get weekly reports. have them, we work a last day of our week, kind of Sunday. And so Monday morning I have it send us new updated reports to our emails. And we are looking at our revenue sales for the week, how it tracks against our bowl.
I think it's in the term. like for that week and then how we tracking toward on the year and then product sales by item and channel. Which is great. So we can see like at a high level, these are the channels. These are your channels, channel sales, and then the costs associated in that channel and then products through that channel and then quantity of products. I think that's everything you see right now, which is a lot, but like, it's really good to see because like,
Previously, when we look at data-driven profit or like sales numbers, it's like looking historically back, like more of a longer time period. And you're like, okay, these are our top selling items for like the last year. But I think that kind of numbers are different than I got on a weekly basis. And so we've noticed some things where, you know, it's just the two of us. We don't really have any, just that one person who does events. So really everything touches our hands going out of here. Even then sometimes you feel like something is selling a lot or something is not selling.
So being able to see the product sales by week and then being like, wow, I didn't realize we sold so many of those things and that we didn't sell those many of those. It felt like it felt different, right? So then like now, particularly with like merchandising in the store or recommending to retailers, like what kind of products to carry and how much they should get, it's helped us like be able to act quicker on that and kind of just push more of what's selling. So it's been.
Surprisingly much better than I thought because nobody likes to go in and have that task of like, go in and look at the numbers. But they were great in that, like, they just help you set it up. Like, there's all this, like, you know, AI, we're going to build reports with AI and stuff, but they just have a person and you just tell them what you want and they build the report and you're done.
Yeah, I thought that was great. Which is like they have people they have people that you just and they email you and they're like very timely Which I was like, that's amazing But I want to touch on the idea of like, you know thinking you know, what's moving You know when you're working the register and you're and and then your wife's working the register one product might be moving with you and not with her and so your vision of you know, how product is selling is different than hers, right and you get a sense of
I know what this costs. I know how expensive that is. I know what's moving and I know what people like, but when you look at the data-driven profit, you're like, oh, I'm not here 24-7. Yes, maybe there's only two of you, but there's still two of you, so you're only getting a part of the picture. Having that hard data-driven profit is so valuable. The other thing is, you're absolutely right, going to run the report, it's like…
It's some massive roadblock even if it only takes you a couple of minutes because you got to log into Shopify. Maybe your password isn't saved for whatever reason. You got to go, you got to get the password. It's just annoying. To have custom reports delivered to your inbox, yes, you still have to open the email and look at it, but I think that that's a much smaller burden to entry than running the
We're all in our email all day long. Don't, you know, it's okay. We don't need to pretend like we're not, we're opening there. What was I just thinking? Oh yeah. I wanted to just mention that like, we have a lot of products too, which also makes it, think we have like 20 to 30 at any time. Um, and then, and then we also change out the chocolate bars, seasonally. Um, so we're, we're moving through a lot of different products and so it's not that super easy. Uh, I was listening to the episode.
last week with the guy that made the tortillas in Arizona. And I was like, man, that's really nice. Like he just buys like four ingredients. That sounds, that's smart.
Well, he does weekly flavor drops though. So he has his standard and then he does, but still week to week, what he's buying is minimal. But in our freezer right now, we have a habanero peach and then a, what is the other one? It was a three cheese, three pepper thing, but you got it and then it moves on the next week. But he always does have his like.
know, his staples as well. But yeah, it's less than 20 SKUs. So no matter how many like weekly flavor drops he does, it's definitely less than what you're working with. The other thing I want to just kind of call out too is that sort of, you you're still looking back at the numbers in a sense, right? What did we sell last week? What have we sold so far this month? So that you can look ahead though and say,
Where are we in terms of our goals and do we need to focus any time and attention in a certain area to make sure that we or give it the best effort to hit our revenue goals? I also love that you mentioned using the data to inform your wholesalers and talking to those folks about what to buy. It's reminiscent of when I talk about owning your region and getting sales data so that when you want to grow or you want to open a new retailer,
Or even just starting small with a handful of stores so you really understand what do people like, what are they purchasing, what is the frequency that they're purchasing with, how do you drive sales in a store, right? You can learn all of that, having the data, figuring that out and then using it to grow, using it to inform how you work with other people. So much value in that. And I can think of like 100 different scenarios where
that same idea can play out in a really positive way. And it's just by looking at the information.
And it comes down simply like being the longer term goals so that like we don't have to work as much. Yeah. We make more money and work less. Yeah. Is just simply it like, you know, I'm not going to spend all my time on this thing. That's like a 50 % margin when this thing over here with a 70 % margin selling really, really well. Yeah. And then now you can, and I mean, ultimately like, you know, now if we were to lend like a grow or expand into something like I've been seeking the tires on like a
home manufacturer for certain products or, you know, do we go through like a larger retailer channel or something like that? I think it'll wait until we get to something like, no, no, this is really good and it's done. And we know that because we've been operating and executing. And then, you know, when you have it right, you know, when you can, then you can turn it up to dial.
Yeah, yeah, so good. I do want to touch on, if it's okay with you, some of the tips that you gave one of the fellow founders in Office Hours. Their big question was, should I hire someone to do marketing for the company? They were wanting to grow Shopify sales from what I remember. It was like, should we invest in
hiring a person. And I sort of said, well, definitely hold off for a second and let's look at some information and see what we can learn. And I thought you gave such great advice around this. If you remember or can you talk about – because this relates to the prior work that you used to do before joining your wife full time. What types of things – and the reason I want to talk about this is because I think that when we want a certain outcome,
we often think, especially as very busy founders, I need to hire someone now to help me do this. But the frame of mind that I was in is, can we make sure this thing is working as best it can before we go hire someone to generate revenue? Kind of like the profit assessment, right? Before I give you the green flag, Matt, to like go and sell the heck out of the chocolate, let's make sure that everything's working properly within the business. So can you share some of the things that are like…
top of list to look at in this instance, like before you invest a good amount of money in trying to grow online sales.
Yeah. Yeah. And it's a tough one because like that's one of the things that came out of the office hours was that our online channel is makes we make more money on that than like wholesale. So online and retail are roughly the same. So I'm thinking through that right now as well. Right. And I think kind of like what what she had was like, I'm selling online a little right now. I'd like to sell more partially in that
They were on it to move away from their distributors. And one of the ways to do that is to sell online. And so I should preface this by saying after my restaurant stint, I got a job doing sales for a software company that sold analytics software. And I did that for like six or seven years through a couple of different companies, but we were always selling to people that ran e-comm sites largely and large websites and, you know, think like fortune 500 kind of size stuff.
So I talked with a lot of people who are out there running just large e-comm sites. So I'm kind of familiar a little, I don't know how to do the things. Like I can't like, can't get in there and do it, but like I can have a conversation and understand all the things. And I saw a lot of like what works and what doesn't. And I think what was really interesting with her was that she was already selling on the website and her conversion rate was high, which was great.
And so we kind of took a look at, think that it was just digging into what the numbers were already there. Shopify already captures a ton of data. So just looking at like, well, how many people are adding to cart? Is there like a big missed area up there? How many people are coming to the website? Where are they coming from? And she went and sold, I think it was over YouTube and a beer until like 2 a.m. Google analytics and Google search console and
Yeah.
the meta tag. And what that does, especially for right now is going forward, gives you, a lot of delayed data collection to then be able to make decisions on. think the next step was actually she did the free shipping offer because like we knew some things like that email was working, sending emails led to sales and that free shipping offers led to sales. But then the questions were kind of like, but how are you getting those people kind of into the email lists and
Are you making money on the free shipping and the case sizes? And so what came out was more like, you can, could make more money without having to like spend a bunch of more money on hiring somebody and getting somebody to do, you know, the online sales part when it was more of just like, let's change some case box sizes and let's keep working on the email lists and we'll make more money than we're currently making without having to go spend all the money to, you know, just.
Right, there's that big question, and this was what you were driving home to. There's a big question of like, do I hire somebody to do this thing, but you need to know more about that thing to get somebody to come in and do that very specific thing. Very broad.
Yeah. And there was… Yeah, you and one other founder in the office hours that month along with this person we're talking about, we're like, don't spend any money yet. Yeah, put the Google Analytics in. Something that stuck in my mind was you were saying, find out where people are coming from when they come to your website. And number one was via the newsletter and then number two was a direct line.
And then Google was number three, but when Googling, think we learned that it was Googling the name of the company or like the specific product. So the awareness, like people were already aware of the brand and looking for it and coming. instead of spending money on like a social media person or, you know, some of the other things that she was considering, it's like, if you're going to hire someone, have it be someone who's going to develop that and like the like
a way to get people on your newsletter. But you guys actually had some other advice about maybe running some low-cost ads on Facebook to get folks onto the mailing list. so, again, it wasn't like don't hire anyone, but rather hold off on hiring someone until you know exactly what you want to be hiring for. And I think that was the most important piece for me and what I wanted them to take away.
know, from that bigger conversation. It was just so valuable to have the two of you cheering her on and like helping her work through and say like, you're not alone. We've done this too. And like, here's some resources and we know we like you've got a thousand things on your plate, but it'll be worth it to kind of slow down and do this bit of research before you hire someone. So thank you for the value that you brought. And I just, like sharing that with our listeners so they know like,
What office hours is beyond looking at their own numbers? Is that you really get a lot of support from the other founders as well.
Yeah, yeah, absolutely. I mean, they're probably the people out there who are most like you in what they're doing. Even if it's a little different here and there, but. There's a lot of there's a lot of wisdom. I think if you're at the point where you're willing to pay for office hours.
Yeah. Well, Matt, I so appreciate you. Thank you so much for creating Amazing Chocolate, for sharing your time and some insights into your business, what you've learned and how you're approaching the numbers. think one thing we know for sure is that finance is intimidating and we want to make it more approachable and easier. I think that hearing from folks like you and other Bobby Yachts is helping to do that. Just a big thank you to you.
Yeah.
Absolutely. Well, thank you. I've listened to a lot of these conversations and they have helped a lot for me too. So hopefully I can help somebody else out there that's trying to figure out this money thing because you to make money at end of the day.
Absolutely.
Looking for more content like this? Subscribe to our YouTube channel. You'll see weekly podcast episodes as well as other content related to the show. Just visit youtube.com forward slash at the Good Food CFO. Thank you for joining us here today. If you enjoyed this episode or found it helpful or inspiring in any way, please share it with your founder friends on social and rate and review the podcast wherever you listen. It's the number one way to help good food founders find the show.
We'll be back with a brand new episode next week.
HAVE YOU RATED AND REVIEWED THE GOOD FOOD CFO PODCAST YET?
IT’S THE NUMBER ONE THING THAT YOU CAN DO TO HELP OTHERS IN THE FOOD INDUSTRY FIND THE SHOW!
And you can do it in just a few easy steps:
Click here to find the podcast on iTunes
If you listen on Apple hit “Follow” so you never miss an episode!
Scroll to the bottom of the page, Click “write a review” and share what you love about the show!
THANK YOU for helping to support & promote The Good Food CFO!