Becoming a business owner is an extremely rewarding experience. You get to be your own boss and sell a product or service you’re truly passionate about. An up and coming market that you should keep an eye out for is the CBD market. Cannabidiol, also known as CBD, is a natural supplement that comes from hemp and marijuana plants. Unlike THC, CBD doesn’t have psychoactive elements that result in a high, which is why more and more states are legalizing its use. With the CBD market growing rapidly, it’s time to consider opening your own CBD business. Keep reading to see our five tips to follow when starting your own CBD business.
1. Create a business plan
The first step to opening a CBD shop is creating a business plan. Starting a business can be expensive, which means you’ll need the help of lenders and investors to get your company up and running. The best way to convince banks and investors to give you money for your company is with a compelling business plan. Your business plan will include market research and an overview of your business model to show how your company will succeed. Your business plan should include the following elements:
- Executive summary, which tells the reader what your company is, who the employees are, the location, and how it will be successful.
- Company description, which goes into detail about your business and what consumers you will cater to, the organization of your company, and the competitive advantages of your company.
- Market analysis, which analyzes competitors in your market and how your company will perform against them.
- Organization and management, which covers the structure of your business, including its leaders and the legal structure.
- Product or service, which, in this case, will be the CBD products you sell, along with copyrights, patents, and other services or products you plan to sell.
- Marketing and sales, which include your marketing strategy and how to plan to attract new customers and retain current ones.
- Funding request, which outlines your funding requirements and how you plan to use the funds if you plan to ask for funding from investors.
- Financial projections, which should convince the reader how your business will be financially stable in the future. This should include income statements, balance sheets, and cash flow statements.
2. Understand all there is to know about CBD
Once you have your business plan written and finalized, take time to educate yourself and your staff on CBD. After all, you’re expected to be experts on all things CBD, so make sure you understand the science, research, advantages, and disadvantages of consuming CBD.
Along with how CBD works, make sure to understand how and what CBD products to sell. For example, CBD tinctures help close out the day because they’re small and affordable, while more expensive products, like CBD vape kits or edibles, can help drive sales if marketed correctly.
3. Establish your business
Once you have a name for your business and a business plan created, make sure to legally establish it as an LLC. You can easily establish your business with the help of a lawyer or with an online technology company specialized in business formation documents. Once you establish your business, you will have an employer ID number that will allow you to operate legally.
4. Sign with a CBD processor
Because CBD is still illegal on the federal level, many banks refuse to process CBD sales, which can make finding a transaction processor difficult. Even card processing companies like Square don’t allow CBD sales. With that said, make sure you give yourself enough time to search for a CBD merchant account and a payment processor that will accept CBD sales.
5. Create a website
To gain more traction, you’re going to need a website. After all, how else do you expect people to find out about your new CBD business in the age of technology? You can hire a freelance web designer to help get your website up and running, or you can use a website creation app like Weebly, WordPress, or Squarespace to design your own website. Along with a website, create your own social media channels on popular platforms like Facebook, Instagram, and Twitter to engage and connect with a broader audience.
Wrapping up
Opening your own CBD business can be stressful at first. However, with these five tips, from creating a business plan to designing your own website, you’ll be on your way to a successful future and flourishing business.
