🥤 Advisory-Only · RTD Beverage Brand
$104,000 in Year One — Ongoing Advisory That Paid for Itself 11×
A founder-led kombucha and RTD wellness brand had landed distribution with a major natural foods retailer. The deal required a 6× increase in production volume in 90 days, a $90,000 inventory pre-build, and retailer compliance specs she had never dealt with. Her bookkeeper could record transactions. Her CPA could file returns. Neither could tell her whether the deal would make money.
Advisory
Engagement Type
11×
What We Found
| Layer | Finding | Impact |
|---|---|---|
| L3 — Working Capital | Retailer deal structured as national launch. Rephased to regional rollout — reduced pre-build from $90K to $54K | $36K saved |
| L1 — COGS | Core ingredient (ginger extract) — price increase accepted 8 months prior without benchmarking | +$22K/yr |
| L3 — Working Capital | Distributor billing error: incorrect case quantity billed for 7 months. Full credit recovered. | $14.4K recovered |
| L2 — Overhead | Co-packer minimum run fee: restructured to match actual cadence vs. fixed weekly minimums | +$18K/yr |
| L4 — Pricing | DTC subscription: price increase test on new subscribers only — no churn impact, rolled out broadly | +$13.6K/yr |
The Situation
A Deal That Looked Amazing — And Would Have Destroyed Cash Flow.
The modeling revealed that the retailer deal, as originally structured, would generate a cash deficit in month four regardless of sell-through — because the inventory pre-build would exhaust the line of credit before the first retailer payment arrived. The deal wasn't bad. The timing was.
Rephasing the production ramp to align with the retailer's regional rollout reduced the initial pre-build from $90,000 to $54,000 — keeping her within capacity and preserving her operating buffer.
The brand finished year one at $3.4M with its first-ever positive cash position heading into Q1 production season.
"I used to make big decisions on gut feel and hope. Now every major decision gets modeled first. That's the thing Scotty actually changed — not just the numbers, but how I think about the numbers"
Key Lesson
The most expensive financial decisions a founder makes are often the ones that look like wins. A major retail deal, a new distribution partnership, a co-packer contract extension — each of these can quietly destroy cash flow if the structure is wrong.