A NEW WORKSHOP ON COST MODELLING AND PRICING FOR START–UP, MICRO AND SMALL FOOD AND DRINK COMPANIES

Being a start-up, micro, or small food or drink enterprise is challenging for the best of us. There’s a lot to think about. Everything is connected to everything else: product design, food safety, process technology, sustainability, finance, cost of goods, staffing, marketing, operations, supply chain… Starting a business while working part-time to fund the business is tiring. It can feel like everything is on your shoulders. We can all have gaps in the knowledge and skills required. You don’t always know what the pitfalls are going to be. In 30 years of supporting start-ups, micro and small businesses, Spade Enterprise Centre finds that the most commonly recurring weak point for a start-up, micro or small business has been difficulty in clearly and transparently understanding manufacturing and operational cost structure and how that fits in and relates to the market structure, selling price and business profitability. Thanks to co-funding by Spade Enterprise Centre and Food Drink Ireland Skillnet, a new three-part workshop is being developed to tackle this need. It is expected to be delivered before the end of 2024; the aim is that each participating business will leave the program with an accurate cost model for at least one product or service their business provides. This cost model will take into account recipes and sub-components, yields, wastage, labour costs, time per task, number of people involved in each task, likely or actual efficiency levels, ingredient, packaging and other input costs, variable and fixed overheads, distribution costs, target or required gross margin, actual gross and nett margin, promotional costs, customer margin, mix of customer types with different margin requirements, VAT, and RSP. This model will be a tool that can be used, among other things, to set selling prices, understand the relationship between volume and break–even cost of goods, how identify savings that can reduce the cost of goods and model possible upscaling scenarios. Spade clients will be given priority, but if interested, contact emer.mcgrath@spade.ie.

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Spade Enterprise Centre, based in Dublin, is a not–for–profit organisation that provides flexible workspaces that allow start-ups and small companies to grow and develop. A spirit of entrepreneurship is fostered by collaboration, support, networking and mentoring foster a spirit of entrepreneurship. 60% of its 25 units are occupied by food and beverage entrepreneurs, and in 2023, Spade opened a purpose-built Shared Kitchen, allowing clients to explore concepts, develop new products and test markets without the cost commitment to premises while benefitting from participation in all of the benefits of the Spade community.

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Skillnet Ireland is Ireland's national talent development agency. Skillnet Ireland is funded by the National Training Fund through the Department of Further and Higher Education, Research, Innovation and Science. Skillnet Ireland provides upskilling programmes to enhance business competitiveness through 70 Skillnet Business Networks in partnership with industry and the education and training sector. Food and Drink Skillnet Ireland works with companies in the food and drink sector to address skills gaps and access government funding to develop and deliver industry-specific learning programmes and is delighted to collaborate with Spade Enterprise Centre and Radix Consultancy and to part – fund this course. 

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Gavin Sherry of Radix Consultancy Limited will deliver the course on behalf of Spade Enterprise Centre and Food and Drink Skillnet Ireland. Gavin is an end to end Prepared Food and Drink Specialist with in excess of 30 years’ experience in senior management positions with some of Ireland best known food companies and projects with more than 50 private clients. He is directly experienced and qualified in Procurement, Food Safety, Upscaling, Lean Manufacturing, Cost Modelling, Cost Reduction, Negotiation, Training and Development and Strategic Innovation and has a proven track record of bringing an intrepid and innovative approach to bear on complex and challenging opportunities. Gavin has managed annual budgets of €80m and an inward supply chain of 60 suppliers from across the globe. He is an expert in tendering processes, supplier sourcing, raw material cost reduction and negotiation. He has perfected a knowledge-based system of understanding and tracking a business’ operational cost model as a vehicle for knowing where to look for and achieving savings and value for money.