Few business choices pose more risk to an investor or an owner than starting a cannabis dispensary. After all, cannabis remains illegal under federal law, limiting the scope of not just sales but also business operations. It can be quite hard for a cannabis business to succeed with the deck stacked against them, but there are several ways to beat the odds and establish a flourishing company.
At a time when the marijuana industry is growing head-over-shoulders, you might be tempted to say that you don't need a business plan: cannabis sells itself, doesn't it? In reality, however, no business is immune from poor planning, and a concrete business plan will go a long way towards determining business strategies, resource allocation, and ways to get a step up over your advantage. Look carefully at the local cannabis industry: what are the strengths and weaknesses, and how can your business address weaknesses without getting crushed by its strengths? Create a "hook" that will not just bring in customers but appeal to business partners, such as cheaper prices, greater availability, specialty growths, or exceptional service. This plan will allow you to more effectively grow your brand.
In the planning phase of a cannabis business, you can get away with a quick-and-dirty calculation of basic business figures: quantity of products grown, retail pricing, and overhead expenses. Once the planning is done and its time to commit major investments of time and money, however, you need much greater certainty about the success of your spreadsheets. A business owner should know how much they can put on their shelves, how much customers will take home, and how much they need to charge to make certain they can pay the bills. Many cannabis investors are cynical as the market becomes oversaturated: they want to see hard numbers without a lot of fantasy.
It's tempting to think that because you've figured out how to grow a new strain, or you've figured out how to package your product at a lower cost, that this is a guaranteed win. You need an advantage to go into the industry, but you also need to know that the advantage works. Test your upper hand as thoroughly as possible to make certain that customers agree with you, and have a Plan B in case you find out that they prefer an inferior competitor.
It's a golden rule of business to never leave money on the table. While this most often applies to sales, it also applies to investment valuation. You can feel slighted if an investor wants to give you less money for more control than you were expecting, yet every company in history has had to deal with an unequal exchange to get off the ground. Don't turn your nose up at investment opportunities, because you may not get second changes for them.
Talk to ten cannabis business owners and you'll get ten enthusiastic reports about a law or regulation that they hope will change soon. You can be as optimistic as you like with regards to cannabis regulation, but you shouldn't plan for specific changes to law or financing regulations. Plan your business for today, not what could happen tomorrow by getting Pre-Approved for financing today.
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