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Functional Beverage Company
Navigating retail expansion without cash issues
Client
Confidential Client
Timeline
7 months
Services
Fractional CFO
The Challenge
This functional beverage company had proven product-market fit in DTC and was expanding into major retail chains. The challenge: retail has terrible payment terms (often 60-90 days), and the upfront inventory investment for store placement was straining their line of credit. They needed to triple production without running out of cash.
Key Issues
- Expanding from DTC into major retail chains
- Retail payment terms of 60-90 days straining cash
- Upfront inventory investment for store placement
- Existing line of credit nearly maxed out
- Needed to triple production capacity
Our Solution
We developed a 13-week rolling cash forecast that modeled every retailer relationship separately, including payment terms, slotting fees, and inventory requirements. This forecast became the foundation for securing a $5M line of credit and negotiating better terms with their largest retail partners.
Our Approach
1
Week 1-3: Retail Planning
Modeled each retailer relationship with specific payment terms, slotting fees, and inventory requirements. Built detailed cash impact scenarios.
2
Month 2: Banking
Prepared comprehensive financial package for lenders. Demonstrated cash management discipline. Secured $5M line of credit with favorable terms.
3
Month 3-6: Expansion Execution
Managed cash through rapid retail expansion. Weekly forecast updates guided production decisions. Negotiated better terms with key retail partners.
4
Month 7+: Optimization
Improved cash conversion cycle by 40%. Optimized working capital across 5,000+ retail doors. Established systems for continued growth.
The Results
5,000+
Retail doors opened
Expanded to major chains nationwide
40%
Cash cycle improvement
Better terms and improved working capital management
$5M
Line of credit secured
Favorable terms based on strong financial story
Zero
Cash shortfalls
Despite 3x inventory growth, never ran short
Key Outcomes
- Weekly cash forecast with 95%+ accuracy
- Data-driven inventory purchasing decisions
- Improved gross margin from 42% to 50%
- SKU-level profitability tracking across all channels
- Successfully raised Series A with compelling financial story
- Built financial foundation for continued scale
The cash forecast was our lifeline. It showed us exactly when we'd need to draw on the line and when we could pay it down.
— VP of Finance
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