GROWING A COMPANY? IS THIS YOU?
- Don't want to rely on investors, resellers, lots of employees, and high risk operations that take a long time to realize returns?
- Want to be highly profitable and sustainable with defensible competitive advantages?
- Cannot land investment because you lack experience or traction, so you need an effective plan for bootstrapping?
- In the idea stage or early startup stage and need a plan so you are not wasting time and capital?
This is a Quora questions I was asked. Here is my answer
I did a quick search in my industry source and did not find anything that specific.
Here are some quick metrics to make a guess:
- As of 2016, they are north of $300 mm in sales;
- Raised $220 mm to date from 10-investors;
- Direct-to-consumer sales and no retail to date.
Based on the type of marketing they are doing (all brand, from what I can tell), I assume their marketing costs are running at least 25% of revenue, and operations costs at 40% (based on their size).
That leaves 35%, and if they are not profitable, then I assume their COGS is at least 35%.
Given that they sell organic products, I would peg their COGS at 40%, so gross margin is 60%.
In my experience, I have not see pure organic companies with COGS below 40%.