September 11, 2023

TF #012: Strategic Partnerships: Scaling that wall

TF #012: Strategic Partnerships: Scaling that wall

Welcome to our next edition of the Community Corner for The Foodpreneur. In this segment, you’ll hear from real businesses in this industry, each of whom will explain things that helped them grow, or mistakes they’ve made. If you’d like to contribute to this segment, we’d love to hear from you, too!

This week’s Community Corner is brought to you by G-Runners Meal Prep Delivery, a delivery service for meal prep companies. Here’s what the owner of G-Runners Meal Prep Delivery, Ruben, had to say about strategic partnerships:

G-Runners Meal Prep Delivery – Strategic Partnerships: Scaling that wall

It’s the kind of thing that happens to a lot of businesses on their way to success: they grow until they hit a roadblock that makes it hard to scale up. In the meal prep/heat-and-eat industry, this problem tends to materialize when order volume reaches a kind of critical mass for a particular business. That threshold varies a bit from one business to another.

When you first start out, the process for handling orders is pretty straightforward: a customer places an order, you bill them, prepare it, package it, and deliver it or arrange a pickup. Each step in this chain takes some time and effort, so there typically comes a point at which there are simply too many incoming orders to handle with current capabilities, and it becomes a challenge to scale up and grow the way you want it to. For some businesses, receiving a hundred orders in a week is simply too much volume to deal with; for others, that number is higher, and for others, it’s lower.

This stage of business maturity is what happens when you succeed; it’s a great problem to have to solve. What business wouldn’t want to have an issue with too many customers? But, of course, just because it’s an indicator that you’re doing a lot of things correctly doesn’t mean it isn’t a sign that you should consider ways to overcome it.

Problems of scale usually have a few solutions, but there are three main ones: hire more employees, automate more, or—the solution I want to talk about—consider a strategic partnership. Let’s break it down.

1. What kind of strategic partnership are you talking about?

Simply put, this is an arrangement a business makes with another vendor that offers a service that either reduces your workload by handling part of your processes, or provides some kind of value that you can provide to your customers. For example, you might form an agreement with local delivery resources to improve your delivery time—that’s a convenience that adds value for your customers (and also increases your reach).

2. Why bother with a strategic partnership when I can hire more people?

Staffing up is a frequent response to problems of scale. But that comes with risks, too, as any business owner can attest. Payroll can rapidly become unmanageable, and businesses can be forced into making tough choices if the growth slows down, and that’s just one potential pitfall.

A strategic partnership, on the other hand, can easily be structured in such a way that your processes can be improved without taking on too much risk. For example, you might make an arrangement with a vendor who handles deliveries for your business, and their payment is based on the number of deliveries and average distance traveled. That cuts out a huge chunk of the order fulfilment process and puts you on a pay-as-you-go arrangement, which protects your bottom line against a potential decline in order volume. In other words, your business will not be on the hook to pay additional employees to handle deliveries if your sales drop; you’re paying for services rendered.

3. Doesn’t that get expensive?

Profit margins are important across the entire food industry, and it’s understandable when someone balks at the idea of working with a partner that can cut into those margins. In the delivery example above, the fulfilment cost of each order does indeed increase on the back end, and that increase can make some businesses nervous. But the other side of this is important, too: scale.

While it’s true that a strategic partnership can increase your cost per unit, it’s also true that it can allow a business to take on much greater volume than before, expand their effective reach, and substantially lighten your workload. Consider the above example—if a vendor can offer a wider delivery radius than you can handle, that opens up an opportunity to reach customers outside your current region. Not only that, but that’s a significant part of the process that’s taken out of your hands, too, which leaves your team more time to focus on food preparation; that can improve the quality of your meals, and that can lead to happier (and more frequent) customers.

The point here is that countless obstacles to achieving the scale you’re looking for in this industry can be overcome with a strategic partnership rather than bloating up your payroll, when automation isn’t an option. Not only that, but some arrangements have the potential to add to your net revenue, allow you to focus on your main offering, and generally make your business (and, by extension, your life) easier to manage on a day-to-day basis.

Take Action

G-Runners Meal Prep Delivery is a third-party delivery management provider focused entirely on meal prep businesses. With nationwide support, seamless automation, and built-in customer notification capabilities, G-Runners Meal Prep Delivery helps businesses streamline their processes, expand their reach, and scale their businesses the way they want to. Head over to their main website and follow them on Instagram.

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