We had a chance to sit down with Marc Nathan, an expert in working with tech and consumer packaged goods companies in the areas of funding and legal support, to learn about key success strategies. For those not in this line of work, consumer packaged goods (CPG) are products that are used daily by consumers and that need replaced frequently such as food, clothes or household products. The ideas shared by Marc apply not only to CPG business, but can also be applied to other businesses as well, so read on.
How is CPG different from others?
There are several elements to consider. Is this a real, unanswered need for the consumer? Can this be produced in quantity and most importantly, can it be profitable? CPG is tough to manufacture because of production and packaging, it is much easier to sell software. Co-manufacturing is an option, but it brings its challenges as well.
What is co-manufacturing?
Here’s an example: you contract with a commercial kitchen that can make your cupcakes that you made at home when you run out of space to do it yourself. A key success factor is making sure the quality is the same. While renting their time and equipment is much cheaper than building your own, you have to work into their schedule and you need to stay engaged to ensure the product is kept to your standards.
What are some of the other challenges to be aware of?
One you make the product – you have to package it. You have two key objectives: 1. Keep it safe and fresh until it gets to the customer 2. You want customers to buy again and again.
If you have questions about starting your own business, contact IDEA Hub Director Maia Donohue at firstname.lastname@example.org and learn more about IDEA Hub at https://www.ideahubaccelerator.com/