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  • Writer's pictureDr. Ari Smith Cordtz and David. H. Cordz

The Six Biggest Mistakes Start Up Beverage Companies Make - Pt. 2 Funding & Profitability

Drink Formulation Profitability & Funding

Mistake #2 - They underestimate the amount of funding required to get to profitability.

Start up beverage companies can better understand the funding needed for profitability with robust planning. Clarity and taking the right steps in order will make your path smoother with less obstacles that may impede your progress and cost you more money.

  • What is your product category?

  • Start up cash will get you to market (this is usually friends, family, or Angel Investors)

  • Once you determine what dollar amounts will be needed for your brand launch, double it or even triple the amount to cover unexpected startup challenges.

  • Pay for a commercial beverage development – make sure the formula remains your intellectual property and not the property of the formulator. With Sonoma Beverage Formulation Consulting the commercial formula belongs to you when the project is complete.

  • The more clarity you have around the look, flavor, and aroma the better outcome you will have with the formulator.

  • Find a custom packaging partner that meets your needs.

  • Once you know the capabilities of your chosen copacker you can move forward choosing a package (cans, glass, plastic, etc.)

  • After you have a package, your label design can move forward to meet the mechanical abilities of your copacker and your chosen package container.

  • Don’t put the cart before the horse! (More on this in mistake #4)

We find many people plan for failure, but they don’t plan for success! A common miscalculation is to plan too conservatively, then having to adjust for success. If your brand is much more successful than you anticipated, it will require an infusion of cash to keep up with the sales. There’s an old saying in the beverage business “There’s nothing that will kill a company faster than success” So, you’ll want a plan that includes a scenario of your brand being more successful in the market than anticipated. This can keep you on the path without stumbling on the way to achieving your dream.



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