7 Tips to Reduce Burn and Boost Efficiency for Brands in 2023
We're exploring ways brands can extend their runway and reduce costs in 2023. From evaluating supply chain to optimizing product strategy, we provide simple strategies that make a significant impact on your bottom line.
This guide features ways small and large brands can reduce their burn rate in 2023, whether you’re looking for emergency strategies or opportunities to proactively extend your runway for the months ahead across supply chain, product, operations, agencies & vendors, finance, customer engagement, and retail strategy.
Evaluate Your Supply Chain
Ingredients & Raw Materials
Buy ingredients and packaging today in bulk if it saves you money later this year.
Pay Suppliers Ahead
Offer to pay 3-4 months upfront for a discounted rate.
See if existing suppliers have more of what you need vs. multiple contracts, even letting them know what your needs are might inspire them to stock those specific ingredients.
Find Suppliers Closer to Your Co-man
Source new suppliers close to home to reduce shipping costs and freight time across the country or world.
Develop Products with Existing Partners
Develop new products with the ingredients and factories you already have. You might be able to get a better price on both if you commit to larger volumes. Ask what their capabilities and line availability are in the coming months.
Cut Underperforming SKUs
So your team can focus on the money makers. Similarly, check in with your retail partners to see which of your SKUs they believe have the best potential to grow.
Explore the Possibilities of AI for Automation
For redundant or repetitive tasks as well as creative assets like brainstorming packaging concepts or simple photos and videos for your product landing pages.
Operations, Expenses & Finance
Make Inventory Management Easier
Brands can optimize their inventory by implementing just-in-time inventory systems, reducing excess inventory, and forecasting demand more accurately. We recommend anvyl.com for an all-in-one solution.
Look for the best price on freight and compare single-truck contracts to multi-year contracts. Link to Ampla’s logistics post here.
Reduce Office Costs
Energy-efficient equipment, flexible offices, and utilizing remote work options.
Cancel Unused or Redundant Software
Like productivity software or communication tools your team is barely using. Try not to cancel software that saves your team time or would revert them back to analog workflows. Additionally, you can save money by paying 6-12 months upfront for software tools you know your team needs to do their best work.
Get a Business Card with Cash Back and Other Benefits
A business bank account can centralize finances. Some banking platforms offer added benefits beyond the basics. For instance, some banks offer APYs on deposited funds, allowing brands to earn extra income. Other platforms, such as Ampla's banking platform, offer unique features like their credit builder program that helps brands unlock their Line of Credit in the future if they are not yet eligible.
Re-evaluate your agency relationships
To ensure they are aligned with your 2023 priorities. If you aren’t focused on a specific retailer or grocery region this year, you might not need to keep that broker on retainers.
Renegotiate With Agencies
Pay your agencies early or within 10 days of receiving an invoice for a discount or negotiate longer-term contracts for a reduced rate.
Consider Flexible Talent
Hire freelancers or agencies for open roles this year instead of full-time hires until you’re ready to have a long-term teammate in those roles.
Outsource non-core activities such as accounting, IT, and customer service to focus on your team’s core competencies and priorities.
Re-engage with current customers
And check in with customers who haven’t purchased in a while.
Pre-sell a product or offer a discount for several months of shipments
Like a reduced cost to buy 3-6 months of a vitamin on subscription.
Go Deep with Current Retailers vs. New Ones
Upsell to existing retailers and ask your distributors and brokers about opportunities within their networks.
Share Cost of Trade Spend
Split the cost of ads, coupons, and demos with other brands in the store.
Join a Community
Reach Out to Your Network or Community
Reach out to brands you’ve helped in the past or join a community of founders to share notes on how they are saving money this year too. Find ways to collaborate on marketing campaigns, retail launches, and sharing notes about your favorite agencies and vendors. We recommend Indie CPG, Startup CPG and joining your local Naturally Network for online and offline events and education opportunities with like-minded emerging brands.