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Plant Based Startups, Breakthrough Quicker and Limit Risk By Outsourcing

Plant based entrepreneurs are modern day pioneers challenging the establishment that was built on animal exploitation.

Entrepreneurs and scientists are creating ever-more delicious, nutritious and sustainable products that will inevitably achieve what has long been thought impossible. Plant based and alternative protein start ups are on par or below the cost of animal protein. That, my friends, will be the tipping point and not just for food.

The growth rate for the U.S. plant-based food market more than doubled in 2020, as sales surged 27% to $7 billion, according to the Plant Based Foods Association (PBFA) and The Good Food Institute (GFI). Plant-based food sales rose nearly twice as much as overall U.S. retail food sales, which climbed 15% in 2020.  On top of that, there are many exciting innovations across the global supply chain.

Start up companies and investors, fueled by growing consumer choice, are creating a wide variety of products made from natural elements. This revolution is creating momentum and hope for animals and the planet.

Plant Based Outsourcing

Unfortunately, all too many great ideas are lost before they are found. The process of creating a product is one thing.  Moving that product from bootstrapping into the business lifecycle is altogether another matter. All of that hard work and planning must  be summarized into an effective presentation in order to obtain the capital needed to grow. At this point, the need for unbiased, high level expert participation could not be greater.

For plant based startups to be able to access targeted high level competencies, like a CFO, in spurts, as needed, is a game changer. One that can expedite breakthroughs in investment and growth, while reducing cost and risk. Investor ready financials, solid business planning, an effective leadership team, and a  marketing plan, creatively packaged, will save massive amounts of time and money in moving an enterprise into and through the investment cycles, or not.

What You Need When You Need It 

Most entrepreneurs start by raising initial funding from friends and family, while some may take up loans in exchange for common stock. The next stage after bootstrapping is to attract seed investors and raise funds based on the plan, projections and a reasonable valuation of the company.  Typically these funds are used to further identify customer preferences, and tastes, and apply them to formulating a product or service and bringing it to test in the market.  

Outsourcing can fill gaps, catch errors and provide the depth needed for initial funding and beyond.  It sounds easy, right?  If so, then what do so many startups fail?

Why Do So Many Startups Fail?

Starting a business is challenging to say the least, there are many hurdles and barriers along the way. According to data from the U.S. Bureau of Labor Statistics, about 20% of U.S. small businesses fail within the first year and this is likely only the tip of the plant based startup iceberg, U.S. Startup Statistics.  There are many reasons why startups fail, however, outside of the actual product, you can typically boil all of the reasons down into four primary categories:

  • Financials,
  • Business Planning,
  • Management & HR, & 
  • Marketing 
Financials

Everything revolves around the numbers, financials, projections and proforma. All too often entrepreneurs simply don’t know their numbers, which could result in an evaluation appearing to be made out of thin air. 

The plant based investment community is relatively small, and if you are not well prepared, it may not take long to become invisible. An experienced professional is vital in helping to prepare the foundation of your vision into statements  and charts that investors can easily understand and analyze.

Business Planning 

Planning requires in-depth research, summarized and polished to create an effective investor presentation that brings your vision to life. It must create compelling reasons and excitement in order to inspire an investor to take on risk.  

Having a well designed slide deck and confidently presenting the material is key in getting to the next level. Business planning is directly tied to the financials showing details behind the assumptions being made.

The biggest mistake may be drinking too much of your own Kool-aid and overestimating how well your product will be received.  

Management

HR issues like compensation planning, organizational structure, recruiting, and team building need to be addressed early on. They are at the root of creating culture and company branding. Solid planning results in a credible leadership team, (some of which may be temporary), to show expertise, stability and passion.  

What expertise do you need? What are you offering to get it? One thing you do have to offer is potential value.  Consider using stock options, profit sharing and benefits to recruit your leadership team and your employees. How To Conserve Startup Cash.  

Marketing 

Getting people interested in your product or service is not an easy process. Market research, analysis, and understanding the ideal customer’s interests are critical in this age of overwhelm. 

Consider that marketing pertains to all aspects of a business, including product development, distribution methods, communication, sales, and advertising.  Everything needs to be packaged, presented and sold. 

Poor or insufficient marketing is all too often the reason companies fail or become a victim to the number one reason for failure, lack of market need. Momentum and timing are critical and marketing sets the stage, creates excitement and translates into growth, stability and success.

Outsourcing, How Does It Work? 

Simply put, outsourcing is the business practice of hiring a third-party to perform tasks, handle operations or provide services for the company. 

The most common outsourced service is payroll. Other typical services  include:

  • Accounting,
  • Human Resources,
  • Marketing,
  • Sales,
  • Consulting,
  • IT Management,
  • Administrative Tasks, Customer Service,
  • Manufacturing, Co-packing, and Logistics.

So Where To Go From Here?

Remember, all roads lead to or from the numbers and the detailed assumptions that support them. Your financials must be formatted so that you can quickly see how different choices impact the overall plan.  The numbers must become second nature and quick to mind. So practice them.

There is so much to know and so many variables.  The best advice is to ask, evaluate and keep an open mind. 

Outsourcing certainly has its risks. However, the benefits make it well worthwhile to take a close look. Ask yourself where do we need the most help? How can we avoid getting bogged down? What is our greatest challenge? What would it be like if it were handled outside?  

Having the right knowledge and experience at the right time can make all the difference in the world.

Paul Turcotte is the Co-Founder and HR Consultant for New Earth Partners.  He is also Co- Founders of Passion Placement, an employment platform helping mission-aligned candidates find employment with companies that are compassionate and committed to making a difference for people, the planet and animals.  

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