The food and beverage industry is changing around the world. From where the ingredients are grown and produced to how it is consumed, nothing looks like its former self. Digital technologies are playing a vital part in growing and developing this industry. With the help of Enterprise Resource Planning -ERP solutions – manufacturers are now able to improve their bottom-line and have more control and traceability in the supply chain. Choosing an ERP system that fits just right is something that’s becoming crucially important and even more so at the early stages.
Nobody could have predicted a global health crisis like COVID-19 and the resulting drop in businesses, economy, and societies as a whole. All is not bleak – the upside has been the ensuing technological disruption that has encouraged more entrepreneurs in the industry to adopt the digital route and choose ERP solutions to futureproof their business and attract investment.
According to HBAN, the Halo Business Angel Network, business angels invested over €14m in start-ups across the island of Ireland in 2020, despite the pandemic induced restrictions throughout the year. While Med-Tech remained the top priority for investors, food and beverage companies were not far behind.
In this blog we share five things to keep in mind when it comes to choosing an ERP system and becoming investor ready.
1. Choose the right ERP Provider
In order to get funded, it is important for businesses to stay relevant. Food entrepreneurs in Ireland are no longer afraid to embrace digital technologies. While food and beverage companies are inherently experienced innovators, they still face a considerable challenge when choosing their ERP provider. The Noledge Group has decades of experience in helping such customers by bringing real value with ERP solutions to simplify processes and automate mundane tasks.
2. Selecting an ERP System
Which ERP system will best suit depends on several factors, including:
- Size and Scale
You may be small today but if you plan on scaling rapidly, the last thing you would want is to be hindered by purchasing a system that was ideal for your needs on Day 1 but does not meet your needs in Year 2.
If you are producing food/beverages in-house, then you should consider not only the financial aspects but also the operational side of the business. Raw materials, stock management, traceability, works orders, purchasing, warehousing, logistics and more. Investors will be glad to see that you have a handle on not only your numbers but also on your in-house operations and efficiencies that will emanate from having the right system for your business
Closely aligned with both above points, starting out it can be difficult to know how much to invest in systems. Our view is that “getting it right first time” will stand to you down the line. Chopping and changing systems in the early days can hold you back and prevent you from accelerating at pace early on. Our advice on ERP systems would be to think longer term and to start as you mean to go on. Look for a solution that can grow and scale as you grow. Bite off the system in small pieces. You don’t necessarily need “the kitchen sink” on Day 1. Purchase more modules and user licences as you grow, but at least you have a good foundation on which to build your business. Reverse engineering or doing a U-turn is much more costly in the long run.
- Cash Flow
Subscription models can really help start-ups and young businesses by avoiding any large capital outlay. There are some extremely attractive options out there for financing ERP systems, so you can get all the benefits of a mid-range ERP solution (which in some cases include professional services), at an affordable monthly rate.
3. Prepare for your pitch
Many food and beverage start-ups are going down the crowdfunding route to raise capital, either to get started or to scale up their business to the next level. There are many exciting opportunities for companies in this sector. Often, food entrepreneurs face multiple roadblocks while managing their finances and presenting their profit and loss plans (P&L) to investors. Our advice – as long as your business plan is grounded in reality and you know and trust your numbers – go all in.
4. Present at the right time
Companies in early stages of starting up must consider funding once they have their proof of concept ready. Many investors also like to see a pitch deck that would typically outline the scope of business, plans for scaling up and robust financial statements and forecasts. This offers real evidence of a demand that your business can or is meeting, while demonstrating opportunities to scale. Pairing market research findings such as market size, target market and competitive landscape with financials and forecasts will provide investors with assurances that your business is worthy of investment.
5. Technology always offers an edge
Food and Beverage businesses whether in manufacturing, retail, e-commerce, or wholesale/distribution have all faced challenges over the past 12 months. With Brexit and COVID-19, there has been a lot to contend with in such as short space of time. For some companies, challenges such as temporary closures have hit hard, while for other businesses, the focus has been on keeping up with demand and having systems and processes in place to meet the demand.
Be ready to pivot
Some of the world’s most renowned Fast-Food chains have got it right when it comes to systems and technologies. No matter which country or restaurant you visit, it’s almost a guarantee that the food and service will be consistent. How do they manage this? By making use of an ERP tool that streamlines processes and digitises the whole system. Similarly, Noledge’s experienced team provides recommendations on choosing an ERP system that’s right for your food and beverage business to help stay compliant and to mitigate the risks inherent in the food supply chain. ERP systems are not just for the large companies. Going down the right route from the start means smaller businesses can chart growth metrics, budget for the future and get a clear understanding of their cost base. Additionally, being cloud-based, mobile and agile gives your business every chance to pivot and adapt to unforeseen obstacles as well as positioning you to grab new opportunities that come your way.
To wrap it all up, this is an exciting time to be investing in the food and beverage space. The industry is fast and fresh and is adopting new technologies at a faster rate than predicted. The gap between where your business is today and where you want it to be can be filled with the right investment partner, a robust ERP system together with the right ERP partner.
At The Noledge Group we have over 400 loyal customers including many well-known household names in the food and beverage industry such as: Frylite, Corrib Oil, Mr. Crumb, Jump Juice Bars, Rye River Brewing, Willows Ingredients, Cloverhill Foods, Roise & Jim and more… We deliver best practice advice on ERP systems and proven methodologies when it comes to implementation and change management.
Starting an ERP Project? Why not get in touch to have a chat with us?
Author: Ray Ryan, CEO of The Noledge Group
Ray comes from a background in accounts and business software systems and has over 30 years’ experience providing ERP solutions for businesses in distribution, e-commerce, services, retail and manufacturing.