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The CPG industry is a whirlwind of excitement and challenges. You're passionate about your product, driven by your vision, and constantly innovating. But amidst the thrill of launching new products and securing retail partnerships, there's a critical element that can make or break your success: mastering your CPG finances. Long cash conversion cycles, fluctuating raw material costs, retailer payment terms, and the constant need to reinvest in inventory can feel like walking a financial tightrope. This isn't just about bookkeeping; it's about building a solid financial foundation that can support sustainable growth.

Strategic Financial Management for CPG Entrepreneurs: Tips for Sustainable Growth

Clayton Christensen is a Harvard Business School Professor who coined the term "disruptive innovation [https://www.christenseninstitute.org/theory/disruptive-innovation/]." His research shows that 30,000 new consumer products [https://professionalprograms.mit.edu/blog/design/why-95-of-new-products-miss-the-mark-and-how-yours-can-avoid-the-same-fate/] are introduced each year in the U.S., with a failure rate of up to 95%. And unfortunately, more than 80% of new CPG companies [https://www.newhope.com/business-management/lessons-from-a-humbled-natural-cpg-founder] never reach the $1 million mark in revenue. If you run a CPG business, you know the odds are tough. However, the potential payoff can be huge—economically and personally. Rarely do CPG founders go it alone. Partners and investors are often crucial to your success, and the best of them will ask tough questions to ensure you stay on track. Sometimes, these conversations can get intense — especially if you don’t know your numbers.