If you’re planning to set up a business, but are not yet decided on which market to seize, I suggest that you go to the CBD market.
CBD, short for cannabidiol, is a major compound of the cannabis plant. CBD, unlike marijuana, doesn’t trigger a psychotropic experience [1].
The ban on CBD was lifted in 2018 [2]. Since then, the CBD market has grown into a multibillion dinosaur, with the best days being ahead.
Most people are setting up online stores to sell CBD, but there are other ways of doing it. You can very well set up a CBD retail center and make bank.
In this post, we break down the ten critical tips for starting your CBD retail business.
1. Have a Clear Idea of What You Want to Sell
To succeed in business, you need to eliminate the room for guesswork, and you need to determine the cold facts.
Don’t start your business while thinking of testing to see what will sell. You need to research heavily and determine what is in demand.
Many people have a habit of adding an element of their passions or interests into whatever product that they want to sell.
But you don’t have to always tie a product to your interests, because there’s nothing wrong with choosing a product that doesn’t interest you, so long as it has demand.
But always be clear about what you want to sell.
2. Create a Success Roadmap
Don’t be the type of business person that cares only about making a profit and leaves the trajectory of their business to fate.
You should start a business while having a picture of the end goal, and nothing makes this more practical than drafting a success roadmap.
Some of the things you must outline in your success roadmap include the products that you will sell, your target market, your budget, and marketing strategies.
An excellent success roadmap is typically all-encompassing, and it should cater to every detail both small and large about the business.
The success roadmap not only helps with visualizing and achieving your business goals but can also help with securing funding.
3. Register Your Business
For purposes of banking, taxation, and the law, you need to register your business. Make sure you don’t take this lightly and be over with it quickly.
One of the things you need to spend a good amount of time thinking about is the business name. Entrepreneurs that come up with a business name hastily usually regret it later.
You want a name that is memorable, suitable and agrees with the nature of your business. Brainstorm and come up with as many names as you can and then purge the bad ones.
You also want to type out and search online that intended business name to be sure that no other business entity uses it.
Business registration can be a bit tricky, especially in defining the business structure, and it’s suggested to rely on an attorney.
4. Fulfill Licensing Requirements
Different states have different licensing requirements. Check what is needed from you at the federal, state, and district levels and comply.
Since you’re looking to open a CBD retail center, you will need to obtain several licenses and permits. You can contact an attorney to avoid being overwhelmed.
Apart from the licenses, you should also buy insurance for your business. Talk to a specialist to determine which policies are necessary.
Cannabis stores are more often than not targeted by vandals. You don’t want to put yourself in a position where your store is vandalized and you’re left without recourse.
5. Scout for the Perfect Business Location
The location of your business is one of the factors that can make or break your CBD business. Ideally, you want your business to be located somewhere with decent traffic.
You also want your business to be located somewhere with security, niceties, and other complementary businesses.
Don’t fall into the temptation of choosing a location only because it’s super cheap. Perform your research and rent a store that fits the bill.
We must emphasize the need for prioritizing security. Please don’t do this: don’t set up your business in a deserted, darkness-ridden area, beyond the street.
6. Befriend the Vendors
To succeed in CBD selling, you need reliable suppliers. You need to tap into vendor networks and strike good relationships with them.
There are many CBD vendors, and you should establish relationships with different ones so that you have higher odds of striking gold.
A good reputation is the hallmark of a reliable supplier. Since vendors and suppliers have websites, you can always check to see what kind of reputation they have.
Also, you want to partner with vendors who are easy to reach, offer quality services, and express genuine concern when customers raise issues.
But if you find a vendor is disrespectful, you had better cut them off.
7. Get the Employees On-board
If you have other engagements, or your business is super busy, you will need workers. Your employees are critical to the success of a business.
They don’t need a diploma or degree, but they need to have soft skills, people skills, and basic virtues. They need to work hard.
Make sure that you perform a criminal background check [3]. The last thing you want is to house a dangerous person (probably on the run) in your business.
Ensure that the employees understand your business goals so that everyone involved in running the business has a clear direction.
8. Market Your Business
A business could be located in an area with limited traffic, but as long as it’s backed with great marketing, the business prospers.
Even if your business is an area with great traffic, never think that you don’t need to market it, as you would be leaving a ton of money on the table.
One of the free and effective marketing strategies is rewarding customers; being active in the community, and networking with local businesses.
But you can also invest in partnerships, create incentives, and even buy advertising space.
9. Fair Pricing
The worst error you can make while establishing a business is setting the prices unjustifiably high. Customers research to see where the prices are good.
If customers get the idea that you’re taking advantage of them, they would boycott your business, and start a negative campaign against you.
Some CBD establishments overprice their products and still prosper, but the thing is, this strategy doesn’t encourage customer loyalty.
10. Create a Website
In this age of information, websites are almost a necessity. You don’t have to set up an online store to complement your sales, but a website provides relevant information.
By publishing a website online, customers can get directions to your store, and even prospective vendors and suppliers can contact you.
You don’t need a flashy website, but at the same time, don’t create a substandard and dated website that makes people wonder whether they can trust you.
You can always hire a talented web designer from one of these freelancing sites.
The Takeaway: Tips for Starting a CBD Retail Business
The CBD market worth is estimated to hit $20 billion by the year 2025. But this is the perfect moment to set up your CBD retail business and succeed. The critical steps to creating your CBD retail center include finding your niche, drafting a success roadmap, registering your business, obtaining licenses, getting the perfect location, contacting vendors, and marketing.
Sources:
- Golombek, P., Müller, M., Barthlott, I., Sproll, C., & Lachenmeier, D. W. (2020). Conversion of cannabidiol (CBD) into psychotropic cannabinoids including tetrahydrocannabinol (THC): a controversy in the scientific literature. Toxics, 8(2), 41.
- Corroon, J., & Kight, R. (2018). Regulatory status of cannabidiol in the United States: a perspective. Cannabis and cannabinoid research, 3(1), 190-194.
- Callier, S. L., Huss, J., & Juengst, E. T. (2010). GINA and preemployment criminal background checks. The Hastings Center Report, 40(1), 15.