For mom and pop shops, there may be barriers to enter the cannabis industry, but the right information and strategy could make it easier for them. For one, the initial marijuana license has application fees in excess of $4,000. Additionally, there are extra funds necessary for hiring lawyers, architects, security specialists, lobbyists and business advisors. These things are essential in the planning, building and operation of the cannabis store. Running a cannabis business is not the same as running a mom and pop shop.
There are specific government regulations to follow and a whole gamut of things that are mandatory. Any new cannabis business will need at least three years of overall funding to operate in such a competitive market. So, what do these prospective business owners do to get into the cannabis industry. The solution is to looking for initial funding so you can get over those initial years of hurdles and then secure a cannabis store, stock inventory and hope that it thrives.
The process has similarities to those of other entrepreneurs who might be looking to get into a new industry. However, in the cannabis industry, there are other challenges since banks are not quick to lend money. For this reason, new cannabis business owners have to secure funding from family members, friends, associates or small investors. One thing to note is that large investors might not want to indulge since cannabis is such a risky business and you have to show a strong business plan to engage the larger investors. Since you won’t have any traditional sources of lending, at times, you have to be creative.
A mom and pop shop owner will be competing with business owners in the cannabis industry that may have set up multiple retail stores across the United States and so it is important to be aware of this going in. The key is to carve a small space in the local area where you know your target audience and deliver exceptional service where people come first. In so doing, you will have a constant flow of business. The hardest part is starting out. The customer’s needs will be the ultimate focus, if you want to succeed in the cannabis industry. However, you should also place emphasis on product offerings and make sure that your inventory is always stocked. Even if McDonald’s or Burger King is doing well in a local area, there are similar stores that will also do well, even though not on such a large scale. It is essential to attract the right customers and keep them happy.
Emulate some of the things that you learned as a mom and pop shop; implementing it in your cannabis business. This means that you should create your own brand; promoting the business as one that puts customers first or building your brand in your own unique way to attract the right audience.
The Immediate Solutions
Startup capital will be your biggest challenge. You can start off small by soliciting a loan from a family member. You can keep the business as small as your mom and pop shop while you take years to build it. This will minimize the costs that might include rent and inventory. Develop good relationships with your vendors so that you can work out an account receivable account where you pay later. Use a simple security system initially until you can afford to hire more than one security guard. To cut down on marketing costs, use social media, flyers and networking. Provide customers with discounts on products. This will help to spread the word about your business. If you want to know more about the cannabis industry, visit the Cannabis Training University.