Item #1 on my list of things to do to growing my business is: Flying Hound needs to grow.
Yes, I know what you’re thinking, this is really obvious, your business does need to grow. But how? And, this is where my small business faces a road block challenge.
Since my side hustle of Flying Hound started it’s been learning curve after learning curve. To be honest, I can keep the business the way it is - status quo - and not push for growth. That would be okay, but I need to see how far I can take it and to keep on learning.
My first challenge is suppliers and their “interest” in dealing with a small producer. My experience has is that their minimum orders are very high and I’m still small and I don’t buy from one supplier. Logically I understand their business side, but at the same time, my cash flow is stretched when organic ingredients, biodegradable packaging, and labels all have minimum orders for better pricing and shipping. Hmmm, do I keep going with the few suppliers that deliver small amounts for higher costs and high shipping costs?
My second challenge is my sales agency that takes 8% of all sales they make. I really like this agency and I think they do a great job...for the other pet industry CPG businesses they represent. You see, my wholesale cost is still high to cover my margins of organic dog treats, but it would drop if I could buy from better priced suppliers. Yet, the better priced suppliers are not interested in dealing with small producers - do you see the conundrum?
My third challenge is distribution. Flying Hound has an amazing organic frozen treat for dogs called a Hound Pop. This healthy and tasty popsicle for dogs even has an edible popsicle stick so every pet parent has the confidence the feed the entire frozen treat to their dog. Dogs love these. Pet parents love these. I love watching dogs enjoy these! The challenge with distribution is that these treats need to remain frozen and I need to produce faster, larger amounts, and have better pricing for a distributor to start shipping these all over Canada. Distributors need to make money and they need volume. Right now, everything is hand crafted and hand packed, but how do I improve the process? Purchase an automated solution? It goes back to cash flow and to date Flying Hound has re-invested everything back into the company to grow. I should add, that dogs all over Canada want these Hound Pops. So, the conundrum continues.
How do I get over this hurdle to push Flying Hound to the next level? I basically need better pricing and faster processes. Do I raise capital?
Raising capital may be my solution to getting over this hurdle of growing Flying Hound. This makes me nervous and excited at the same time. The process of fine tuning my business plan and financial plan will be on my list of to dos and also to find an institution who believes in Flying Hound.