If you’re thinking about entering the CBD industry as an entrepreneur starting your own business, you’re smart for jumping in during 2020. The year is ripe for growth among CBD investors and businesspeople, and with research well underway into its effectiveness for treating many health and wellness problems, there are more customers to purchase the products.
Before getting your CBD business up and running, recognize that there will be a great deal of prep and planning. Here are eight steps for starting your CBD business in any particular order.
- Choose Your Products
Have a vision of the types of products you’ll be selling. Choose products that you know will sell to start with, and then grow your inventory as you make sales.
The number of CBD products that have gone mainstream is growing all the time. Right now, one of the most popular products is CBD gummies, like those sold here: https://penguincbd.com/products/cbd-gummies. You should also have a high-quality all-purpose CBD oil and a pain-relief cream.
Eventually, you could include other products like vape juice, beverages, capsules, chocolates, lotions, and tinctures. Just make sure you always source your products from the highest quality organic hemp. You don’t want to start your company off on the wrong foot by using low-quality products.
- Understand the Laws
The laws around the hemp and cannabis industries are very strict, and the penalties for improperly following them could be very costly. Don’t open up shop until it’s 100 percent clear you’re abiding by all the laws.
The laws for CBD differ according to your state. Research associated laws in your state to ensure you’re meeting requirements. Most importantly, note the legal levels of THC content for CBD products in your state. In states where marijuana is not legal, the THC content cannot be higher than 0.3 percent.
- Establish Funding
While some banks are becoming more tolerant of CBD business loans, many will not provide the money. They see it as a risky business considering the lack of research and strict laws surrounding the products.
Seek a bank that’s accepting of CBD businesses. While you shouldn’t lie, it might help to market your business as a health foods company that also sells CBD. Many business owners have gotten started this way and successfully sold other health products alongside their CBD sales.
- Write a Business Plan
The beginning of a great business almost always begins with a solid business plan. It should be an actionable map that will guide you from start to success. Your business plan may vary based on what you plan to sell and who your target audience will be. However, it will likely include a few of the following tenets:
- The products and services you plan to sell
- An analysis of your customers
- A detailed look at the market in which you intend to sell
- How you plan to obtain financing
- How you plan to accept payment (Many payment processers won’t process CBD sales.)
- Your strategy for marketing (see next section)
- Sales forecasts
Lenders and investors will also want to see your business plan, so not only does it need to be clear and detailed for your own purposes, but it also needs to speak the language of your lenders.
- Know How to Market CBD
CBD marketing has some unique challenges because many big-name advertisers will not let you purchase advertisements for CBD products. (Some now sell advertisements for CBD creams, however.)
There are successful methods of advertising, even if does require a little creativity. You might use print advertising, organic search strategies, email newsletters, or influencer marketing. Focus specifically on your content production and distribution plans, and you’ll be on the right track.
- Design and Launch a Website
A website is integral to running a successful CBD business, even if you’re selling your products in a legal cannabis dispensary. Your website is the start of your web presence. All of your marketing efforts will stem from a well-designed website brimming with important information regarding your products.It will also maximize your reach to your target customers. CBD is sold legally in 48 states as long as it’s online and contains less than 0.3 percent THC. Therefore, you reach a nationwide (even worldwide) audience by selling your CBD products online.
Focus on developing visually appealing, yet simple web pages. They should contain quality pictures of your products with plain backgrounds that don’t distract from what you’re selling. Include detailed product descriptions, links to your third-party lab testing, and links to your relevant blog posts.
Make the entire process from search to checkout simple to execute. A great website experience is very important to getting return customers.
- Form a Legal Entity
Do your due diligence by creating a fully legal business entity. This will prevent you from becoming liable in case you face a lawsuit for your products. There are multiple formats for a business including corporation, limited-liability company LLC, sole proprietorship, partnership, DBA, and more.
It might be wise to speak with an accountant to determine the best form of a legal entity for your type of business and those involved. Just make sure you take care of this before you sell any products to ensure you’re fully protected.
- Define a Brand
There are hundreds of CBD companies out there already, so if you’re just starting a business in the year 2020, you’re facing significant competition. The only way to work your way up the ranks of quality CBD companies is to develop a specific brand and use that in all your marketing efforts.
A good brand will not only contain a unique logo, but it will embody quality. When a consumer sees your brand, they should recognize it as one that knows the CBD business and only sells the best products. If you can establish your brand quickly and compare it to those in the big leagues, it’s only a matter of time before you climb your way to the top.