Manufacturing and consumer goods businesses come to consultants later than most sectors, and usually with a sharper problem. By the time a producer picks up the phone, there is normally a specific event behind it: a major customer has demanded a price reduction, a line is running at capacity, a listing has been won that the business cannot currently service, or the margin has quietly eroded across two years and nobody can say exactly where.
Here is the uncomfortable truth that most consulting content soft-pedals: the majority of business consultants are not equipped to help a manufacturer, and they will take the work anyway. Generic strategy advice applied to a business with fixed assets, a production constraint, extended payment terms and a customer base that holds most of the negotiating power produces recommendations that cannot be implemented. Manufacturing problems are usually arithmetic problems dressed as strategy problems, and solving them requires someone willing to go into the cost model rather than the workshop.
This piece covers what genuinely differs about advising producers and consumer goods businesses, what the funding market looks like for asset-heavy companies, how to screen a consultant properly, and the mistakes I see most often in the sector.
What genuinely differs about manufacturing and FMCG
Capital intensity changes every funding conversation. A services business needing £200,000 is asking a lender to underwrite future revenue. A manufacturer needing £200,000 for a machine is asking a lender to underwrite an asset that has a resale value. Those are different questions with different answers, and the second is frequently easier. Producers who apply for unsecured term loans and get declined are often approved for asset finance against the same purchase within days, because the security transforms the underwriting.
Working capital is the binding constraint, not profit. Producers buy materials, hold stock, manufacture, deliver, then wait sixty or ninety days to be paid by a customer with far more leverage than they have. That cycle consumes cash at exactly the rate the business grows. It is why profitable manufacturers run out of money, and why winning a large listing can be the most dangerous thing that happens to an FMCG business in a given year.
Customer concentration is a structural risk, not a sales success. A producer with 60 per cent of revenue through two retailers or one distributor has a business whose pricing, terms and volumes are set elsewhere. Any adviser who treats that as a strength has not understood the position.
Cost models are usually wrong in a specific direction. Most SME producers I have worked with under-allocate overhead to their products, which makes the low-volume, high-complexity lines look profitable when they are not. The result is a business that grows the wrong products enthusiastically. Rebuilding product-level costing is unglamorous, and it is frequently the highest-return intervention available.
Compliance and standards are gating, not optional. Food safety, product labelling, retailer technical standards, sector accreditation. These determine whether you can sell at all, and they carry lead times that wreck launch plans when discovered late.
The funding position for asset-heavy businesses
The market is broader and better than most producers assume, provided the request is structured correctly.
Gross SME bank lending rose 9 per cent to £68bn in 2025, the second highest level in 13 years [1]. More importantly for producers, the composition has shifted: challenger and specialist banks accounted for 60 per cent of gross SME bank lending in 2025, up from 39 per cent in 2012, and more than two-thirds of overall SME lending came from challenger, specialist or non-bank lenders [1]. Many of those specialists exist precisely to lend against assets and receivables, which is what a manufacturer has.
Approval remains demanding. In the SME Finance Monitor covering the period to the end of December 2025, 36 per cent of applicants received no facility at all [2]. But the structure of the request drives that outcome more than the sector does. Asset finance against equipment and invoice finance against a concentrated but creditworthy customer book are two of the most accessible routes in the market, and both are routinely overlooked by producers who default to asking their own bank for a term loan.
Equity is a poor fit for most producers and is worth saying plainly. Equity investment into smaller businesses fell 17 per cent by deal volume in 2025 and concentrated heavily in artificial intelligence, which took 44 per cent of investment from 26 per cent of deals [3]. A manufacturer competing for that capital is competing on the least favourable ground available, when the debt and asset finance market is well suited to exactly what it needs.
There is also relief that producers under-claim. Process development, materials work and production engineering frequently meet the statutory test for R&D tax relief, which now provides a 20 per cent above-the-line expenditure credit under the merged scheme, itself taxable [4]. Manufacturers routinely assume this applies only to laboratories.
How to screen a manufacturing or FMCG consultant
Ask what they would want to see first. The right answer is your product-level cost model, your stock turn and your debtor and creditor days. If the answer is your strategy or your marketing, they are going to give you advice you cannot implement.
Ask whether they will rebuild the costing. Most sector problems resolve into a costing problem. An adviser unwilling to go into the numbers at product level is going to work at a level of abstraction above where your issue lives.
Ask about customer concentration explicitly. A consultant who does not raise it unprompted in the first meeting has not read your business properly.
Filter on funding structure, not on sector marketing. Sector familiarity helps. What matters more is whether the adviser works across debt, asset finance, invoice finance, grants and equity, or only ever recommends the one thing they can arrange. An adviser who reaches for equity before looking at your asset base is selling a product.
Ask what happens in the first fortnight. If the answer is that they start writing a strategy, be cautious. If the answer is a diagnostic producing a specific ranked list of what is constraining the business, you are talking to someone useful.
Check that they will tell you unwelcome things. The most valuable question in a first meeting is whether the adviser raised a concern about your business unprompted. A meeting spent agreeing with you tells you what the engagement will be like.
The mistakes producers make
Chasing volume to fix margin. The instinct when margin is thin is to make more, which consumes more working capital at the same thin margin and accelerates the cash problem. If the cost model is wrong, volume amplifies the error rather than diluting it.
Accepting a listing the business cannot fund. A large retail listing is a cash event before it is a revenue event: materials, stock build and production ahead of payment terms that may run to ninety days. Model the cash requirement before signing, not after.
Pricing from cost rather than value, then discounting under pressure. Producers frequently hold the weaker negotiating position and concede on price rather than on terms, specification or volume commitment. Terms are often the more valuable concession to seek.
Under-allocating overhead. The most common and most expensive error in the sector. Products that look profitable at gross margin are frequently loss-making once properly loaded, and the business grows them because the reports say to.
Treating capacity as fixed. Many producers investigate buying capacity before investigating changeover times, scheduling and yield. The cheapest capacity is usually the capacity already in the building.
Leaving compliance to the end. Retailer technical standards and sector accreditation have lead times measured in months. Discovering this after a launch date is set is a self-inflicted delay.
Where to start this quarter
- Rebuild the product-level cost model with overhead properly allocated. Then rank products by true contribution. Expect surprises, and expect at least one popular line to be worse than you thought.
- Calculate the cash conversion cycle. Creditor days, stock days, debtor days. That figure tells you what each additional pound of revenue costs you in cash.
- Map customer concentration. Revenue by customer, and the terms each imposes. Anything above roughly a third from one relationship is a structural risk to plan around.
- Match funding to the asset. If the requirement is equipment, start with asset finance. If it is the debtor cycle, start with invoice finance. Do not default to an unsecured term loan.
- Test the R&D position. List process and product development work over the last two years where the outcome was genuinely uncertain at the outset. Check the notification deadline before anything else.
- Audit capacity before buying it. Changeover time, scheduling, yield and downtime. Recover what is already there before financing more.
- Get the compliance timeline on the plan. Standards, accreditation and labelling, with lead times, sitting on the same schedule as the commercial milestones.
The principle underneath all of this
Manufacturing and consumer goods businesses fail in cash, not in strategy. The producers who struggle are rarely the ones with a weak product or an absent market. They are the ones whose cost model told them the wrong thing, whose growth consumed cash faster than it generated it, and whose funding was structured against the wrong security.
The right adviser for a producer is the one who asks for the cost model before the business plan, and who is willing to tell you that your best-selling line is losing money.
Running a manufacturing or consumer goods business and not sure where the margin is going? SGI has advised more than 2,000 businesses across 47 industries since 2014, including producers and consumer goods companies, facilitating over £250M in client funding at a 90 per cent success rate. Every engagement starts with a diagnostic rather than a document. Book a conversation or read about Business Consulting.
SGI is not authorised by the Financial Conduct Authority. Where an element of a transaction requires FCA authorisation, such as credit broking, we work with authorised partners.
Frequently Asked Questions
What does a manufacturing business consultant actually do?
The useful ones start with the numbers: product-level costing, capacity utilisation, the cash conversion cycle and customer concentration. From that diagnostic comes a ranked list of constraints and a plan to address them in sequence. Consultants who begin with strategy documents rather than the cost model tend to produce recommendations a producer cannot implement.
Is asset finance better than a business loan for buying equipment?
Usually, for two reasons. The equipment provides security, which changes the underwriting question and improves approval odds considerably. It also matches the repayment profile to the useful life of the asset, which protects working capital in a way that a general-purpose loan does not.
How do I know if my product costing is wrong?
The clearest signal is a business with healthy gross margins and persistent cash pressure. Test it by allocating your full overhead across products in proportion to the resource each genuinely consumes, including changeover time and complexity, rather than by revenue share. Low-volume, high-complexity lines are where errors concentrate.
Can manufacturers claim R&D tax relief?
Frequently, yes. Process development, materials work and production engineering can meet the statutory test where the work involved genuine technological uncertainty rather than the application of established techniques. Confirm your position with HMRC guidance or a qualified tax adviser, and check the advance notification deadline early, because missing it invalidates the claim.
How much customer concentration is too much?
There is no fixed threshold, but once a single customer exceeds roughly a third of revenue, that customer effectively sets your pricing and terms. The right response is rarely to refuse the business. It is to plan around the risk deliberately: diversification targets, contractual protection where available, and funding structured so a delayed payment is survivable.
Should a manufacturer raise equity?
Rarely, and it is worth being direct about that. Equity is the most expensive capital available measured in ownership and control, and the current market concentrates heavily in a small number of sectors. Asset finance, invoice finance and term debt are usually better matched to what a producer actually needs.
References
- British Business Bank, Small Business Finance Markets Report 2025/26, March 2026. https://www.british-business-bank.co.uk/about/research-and-publications/small-business-finance-markets-report-2026
- BVA BDRC, SME Finance Monitor: 3-month rolling analysis to end December 2025, January 2026. https://www.bva-bdrc.com/sme-finance-monitor/
- British Business Bank, Small Business Equity Tracker 2026, June 2026. https://www.british-business-bank.co.uk/news-and-events/news/ai-dominates-uk-smaller-business-equity-market-record-investment-share-overall-funding-falls
- HM Revenue and Customs, R&D tax relief: the merged scheme and enhanced R&D intensive support, GOV.UK, updated January 2026. https://www.gov.uk/guidance/research-and-development-rd-tax-relief-the-merged-scheme-and-enhanced-rd-intensive-support
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Kurt Graver is the founder and CEO of SGI Consultants, a business consultancy that has helped over 2,000 entrepreneurs establish successful startups using systematic business development methodologies. An accountant with an MBA and 25 years of commerce and consultancy experience, Kurt specialises in strategic planning, market analysis, and sustainable business growth