Hurry Up And Wait: Q3 Business Review 2020 From Connor
Here’s a quarter that ended with some positives -- mainly we are finally out of the covid sales slump that dominated Q2. I’ll be honest, things were looking pretty shaky in the summer. But we were able to turn things around.
We also had some issues. July and August were awful in terms of retail sales. Cashflow was incredibly tight and we weren’t able to meet our main goal of launching a new product in September. Why? I’ll get into it below.
Revisiting our Q2 Goals. Did we achieve them?
I’ll briefly mention my business goals for Q2 and how we did.
Goal #1: Release New Product in September
Unfortunately this new product isn’t ready yet. Truthfully, it was supposed to launch last April, now things keep getting delayed.
The reason? The Canada Food Inspection Agency (CFIA) is not conducting site inspections on manufacturing facilities at the moment because of resources constraints and COVID.
This new product requires that they inspect our facility so we can get the correct license to produce and package the product.
Thanks so COVID, things are moving at a snail's pace.
I can’t put into words how frustrating this is. We’ve been ready to launch this product which will really set our long-term direction as a small business. And we are stuck in the mud of government bureaucracy.
If you know anyone at the CFIA who might be able to help, please email me.
Goal #2: Prepare For More Product Changes in the Fall
We do have other product changes coming in November. And I believe that, given the circumstances, we did a great job preparing for this release. The timing wasn’t quite ideal. I would have preferred to have these changes ready for mid September to capitalize on our important fall season. But sometimes things get delayed. What a trend for 2020.
You’ll have to wait another month to hear about the changes, but I think you’re going to like it.
More importantly, it is going to help our business grow and become more sustainable in the long-term.
Goal #3: Grow Online Sales
Specifically to maintain online sales at 20% of our revenue.
We did it! Online sales in Q3 accounted for 21% of our revenue. This is really a great achievement because our retail business picked up substantially in September as well, making it more difficult for us to hit 20% online.
Goal #4: Build and Grow Relationships with Existing Grocery Stores
This is a bit of a soft, qualitative goal, but we achieved it nonetheless. We’ve identified contacts with all of our key grocery store partners. I’ve personally spoken with the majority of them.
We are now tracking these relationships and touch points in a CRM.
What Else Went Well?
Exceeded our Sales Target for September
September was a good month. We surpassed our sales projections due to a particularly strong month of online sales.
As the weather turns, more of you are probably at home yearning for warm beverages like bone broth. You tend to cook more in the fall as well.
Strong Leading Indicators for Q4 and 2021
Our website traffic has doubled in the last couple of months. Why? I’m investing a ton of time into content marketing, and it’s working.
All of our traffic is from organic search results. Zero advertising.
I’m getting better and faster at writing these types of content (mostly long-form articles). I have a strategy that will continue to grow our website traffic. This helps both our online sales directly and in brand building and retail sales (indirectly).
The challenge is that I need to spend a lot of time growing our business, so I’ll be looking for some help in the marketing department.
Sadly I can’t do everything on my own.
What didn’t go well?
July and August Sales Low
July was an awful month of sales for us. COVID combined with our usual slow down in the summer combined for an especially bad month.
August started to turn around, which is a positive. However, these slow sales months really make cash flow difficult for us to manage. Not to mention they make me stressed during the nicest weather of the year.
New Product Launch Delays
This continues to be incredibly frustrating. I spoke about it above, so no need to drag on about it here. It sucks having zero control over situations like these. I feel helpless and depressed at times. Hurry up and wait.
Cashflow was tighter than ever
Coming out of an awful May-August period, we had little cash in the bank. Throw in one massive expenditure this summer that will support our new product changes in November, and we had no money to spare.
This is the reality for small businesses. Business bank accounts are like your stock (or bitcoin) portfolio: best to not look at it everyday.
Goals for Q4
Here we go! Q4 is crucial for us. We are behind on our annual sales projections due to the covid sales slump. We really need a strong quarter to get back on track, and we will do it.
1. Maintain Online Sales at 20% Of Revenue
It’s easy to make 20% of a relatively small number. But our Q4 revenue will likely be double that of Q2 and Q3. Meaning we need to double our online sales. This is going to be tough, but hey, you got to set lofty goals right?
We’re going to need a very strong Black Friday - Cyber Monday effort to get this done.
2. Establish Meetings with Key National Retailers For 2021
Our new product changes are going to make us a better fit for conventional grocery stores in 2021. The whole goal of this thing is to make bone broth equitable and available for everyone.
I’ve identified four key retailers that we need to get meetings with in Q1/Q2 2021. I’ll be working hard to get these meetings so that we can properly present all of our changes and new products.
Want to help? Do you have any retail or restaurant connections? Please shoot me an email (connor(at)purebonebroth.co).
3. Lay Foundation to Launch in the USA Q1 2021
Woah that’s a big one, right? We have very strong website metrics to indicate a lot of interest from the U.S.market. As such, we need to find a way to get our bone broth to y’all down south of Canada.
We’re going to start by selling online in the USA in Q2 2021. But a lot of work goes into this. We need to export our product (lots more bureaucracy involved), meaning we need an export license.
The license pales in comparison to finding a good 3PL or fulfillment partner. Since we’re frozen, it is not as easy as it sounds to find a fulfillment centre who will store all of our frozen bone broth, then ship individual ecommerce orders to our customers across the U.S.
We’ve spoken with most of them, however, we do not meet the minimum monthly sales they require… since we’re literally starting with zero in the U.S.
This is a huge risk as we’re going to need to commit to high monthly shipments to secure one of these fulfillment centres. If we don’t get these sales we will be charged a minimum monthly fee. Talk about threading the needle.
Again if you know anyone in food fulfillment, I would love an intro.
4. Vet and Review Completely New Category For 2021
I have all sorts of half-baked business ideas. Any of my friends know that I love talking about them.
Q4 I’m taking a serious look into a new category for us. It is one I don’t know much about, but admire the opportunity.
Will it work out? Who knows. We need to keep trying new things and experiment in order to be a sustainable business in the long-term.
5. Budget and Plan for 2021
This is boring but necessary. In Q4 I’ll be deep into spreadsheets and projections to set our budget and plans for 2021.
I have more new products I’d like to launch in 2021, however money and cash flow are always difficult to manage.
That’s it for me. I hope you enjoyed reading my Q3 review. It is a struggle to write these at times. I worry that I am over-sharing and that my problems are stupid and laughed at by bigger businesses.
Writing is therapy for me. These quarterly reviews help to keep me accountable to our mission.
Am looking forward to your products available in retail stores, now it’s very limited. I couldn’t afford to have more freezer base. Thank you