Financial Health Essentials – 3 Key Metrics Every CPG Founder Should Track

 

Running a CPG or eCommerce business is like managing your personal health—you need to track key financial metrics just like you track health stats.

Just as an Apple Watch helps monitor steps, heart rate, and sleep quality, your business needs a financial health tracker (Key Performance Indicators) to stay in peak condition.

This article will break down financial health essentials in a simple, relatable way—just like using an Apple Watch to track fitness progress.

Meet Sam—a fictional CPG founder tracking financial health

Sam built a thriving organic snack brand, but financial uncertainty keeps creeping in:

  • ❓ Do I have enough cash flow to scale?
    ❓ Are my products actually profitable?
    ❓ Am I making the right financial decisions for long-term growth?

 

At the same time, Sam never misses a workout, step goal, or sleep tracking session—because fitness tracking provides clarity and progress tracking.

That’s when it clicks: Why not track business financial health the same way? 

 

3 Key Financial Health Metrics for CPG Businesses

A Fractional CFO acts as a financial health coach, just like an Apple Watch tracks your fitness. By focusing on three key financial health metrics, founders can make smarter decisions, avoid cash flow surprises, and improve profitability.

 

Cash Flow – The Heart Rate of Your Business

💰 Why It Matters: Just like heart rate tells you how well your body is circulating blood, cash flow shows whether your business has enough money to operate and grow.

 

🔍 The Problem: Many CPG founders only check their bank balance, not their actual cash flow forecast. This can lead to surprise cash shortages when supplier invoices, payroll, or marketing costs come due.

 

✅ How a Fractional CFO Helps:

  • - Forecasts cash flow for the next 3-6 months to avoid shortfalls.
  • - Identifies seasonal cash flow trends and plans for fluctuations.
  • - Improves cash flow efficiency by streamlining receivables and payables management

 

📈 Tracking Cash Flow Is Like: Checking your heart rate before a workout—if it’s too high or too low, you adjust to stay in peak performance.

 

Profitability – The VO2 Max of Your Business

📊 Why It Matters: VO2 Max measures how efficiently your body uses oxygen during exercise—profitability measures how efficiently your business turns revenue into profit.

 

🔍 The Problem: Many CPG founders see strong sales but struggle to understand actual profitability. Are all products contributing to profit, or are some dragging the business down?

 

✅ How a Fractional CFO Helps:

  • - Breaks down profitability by product, channel, and customer segment.
  • - Identifies hidden cost drivers that reduce margins.
  • - Helps adjust pricing strategies to improve profit without losing sales.

 

📈 Tracking Profitability Is Like: Measuring VO2 Max to improve endurance—without it, you might feel like you're making progress but still underperform.

 

Inventory & Cost Management – The Training Load Balance

📦 Why It Matters: Training load balances exercise intensity with recovery—inventory and cost management ensure you're not overspending or under-stocking.

 

🔍 The Problem: CPG businesses rely on physical products, and poor inventory management can lead to cash flow issues, excess stock, or stockouts that hurt sales.

 

✅ How a Fractional CFO Helps:

  • - Ensures just-in-time inventory management to avoid tying up cash.
  • - Analyzes cost structures to find areas for expense reduction.
  • - Renegotiates supplier contracts to improve margins.

 

📈 Tracking Inventory & Costs Is Like: Balancing training load—too much strain leads to burnout (overspending), too little leads to underperformance (stockouts).

 

How a Fractional CFO Can Help You Improve Financial Health

Just like a personal trainer helps you optimize your workouts, a Fractional CFO helps you optimize your financial decisions.

 

💡 With the right financial tracking, you can:

  • ✅ Improve cash flow visibility and prevent funding gaps.
    ✅ Increase profitability by optimizing pricing and cost structures.
    ✅ Manage inventory & costs effectively to maximize growth.

 

If you're struggling to keep your financial health in check, a Fractional CFO can help you build a customized strategy for long-term success.

 

Conclusion

Tracking your financial health is as essential as tracking your physical health.

  • ✅ Cash Flow = Heart Rate – Keep your business running smoothly.
    ✅ Profitability = VO2 Max – Measure efficiency and maximize growth.
    ✅ Inventory & Cost Management = Training Load – Balance cash and resources effectively.

 

📩 Need help improving your financial health? Book a free consultation today and let’s optimize your business’s financial fitness!