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10 Steps to Starting a CBD Business in 2021
10 Steps to Starting a CBD Business in 2021
We are witnessing a global phenomenon taking place in front of our eyes, as CBD is gaining popularity rapidly all over the world.
Who would have thought a simple cannabis extract could gain such demand and become a highly sought after compound? Making its debut in 2018, CBD is all set to produce hundreds of business opportunities. In this article, we are going to talk about 10 Steps to Starting a CBD Business in 2021.
According to an estimate, the CBD industry is going to reach a sales amount of approximately $20 billion by 2024. All thanks to the passing of the 2018 Farm Bill, CBD extracts have been legalized in most of the states in the US.
Apart from the fact that CBD consumption has been legalized in various regions of the world, it is also gaining popularity because of its health benefits. It has been said to possess anti-inflammatory properties and can help alleviate the pain of patients going through cancer treatments.
Due to the high profitability in this field, the competition is brutal – which makes it difficult for new entrants to sustain their businesses. You need to learn how to utilize online space to your advantage and communicate your message with your target audience. We will go through 10 steps that you can follow when starting your CBD business in 2021.
Step 1: What’s Your Purpose?
As an entrepreneur, you need to self-assess your motive and purpose for starting a business.
According to Napoleon Hill, “The starting point of all achievement is desire.” If you can’t answer this inner question, it would be difficult for you to keep going when things get tough.
- Is this something you are doing out of a hobby?
- Are you trying to run it as a full-time business?
- Will you end up selling this business when it reaches a milestone?
Each of the above scenarios requires a different form of skill set and resources. You just need to calibrate in the right direction, as that would help you reflect transparency and originality in your business operations.
Step 2: Who Are Your Target Customers?
As a novice CBD retailer or a vape store, you might be tempted to start a one-size-fits-all company but is never a good idea.
You need to pinpoint the specific demographics from which your target customers might belong. This would help you bring uniformity to your marketing campaign, as you would be able to reflect a precise theme in your promotional efforts.
When identifying your target market, you need to come up with several questions, some of which are:
- What are their preferences and dislikes?
- Where do they prefer to shop?
- What concerns them?
- Do you feel excited to sell your products to them?
Establishing a connection with your target audience is essential for the long-term stability of any brand. You should know how they think and what their choices are over the online space.
Step 3: Marketing Your Business
To ensure that your message gets delivered to your target customers, you need to come up with effective marketing strategies.
When designing marketing campaigns you need to have a certain vision about the likes and dislikes of your target customers.
Are they health-conscious individuals who prefer organic products over GMO and other related products? If yes, then you should consider advertising your products in the local farmer’s market.
Are they senior citizens who are exposed to the world through paper-published media? Are they mostly teenagers who use their mobile phone browsers to purchase CBD products?
Step 4: Become Well-Versed in Laws and Regulations Related to CBD
Despite the stigma associated with the sale and promotion of CBD, you can still run this business smoothly by making yourself educated about the laws.
Hemp-extracted CBD products are mostly legal throughout the US but you still need to ensure to keep the THC content to a maximum 0.3% threshold.
Once you start the retail of CBD products, you should be fully aware of how your products are processed and packaged. Once you legally register your company, make sure to get TIN and EIN. Also, you need to keep your product description as transparent as possible to avoid getting involved in any legal disputes later on.
Step 5: Select a Unique Name for Your CBD Business
When starting a business, many newbie business owners make the mistake of selecting a brand name that later on limits their growth possibilities.
You need to think of a name that not only synchronizes with the soul of your brand but also leaves room for future brand expansion. Your brand name will be the unique trademark that you will carry for many years to come.
It should be a search-friendly name that increases your odds of showing up in the local search results.
Step 6: Plan out Your Financial Resources
When starting a cannabidiol retail business, many new entrants face difficulty getting the finances in order because of the lack of regulation of this cannabis extract.
When setting up a CBD dispensary business you need to plan how you want to get loans. Most of the local banks will reject your loan request, as they don’t want to get involved in any legal conflicts. So, the first thing need you to do is to check whether your current bank doesn’t have any policy against the retail of CBD and marijuana extracts.
Step 7: Select Your Domain Name
Once you have chosen a unique name for your company, you need to buy a domain name of the same name.
You can run into serious trouble if someone else buys a domain of the same name before you. Even if you own a brick-and-mortar CBD business, you still need a website.
Your name should be precise and succinct. It should also be appealing and relatable to the eyes of your target customers. Coming up with a memorable name can be a game-changer for you, as your past customer would be more likely to buy again from you whenever they feel like purchasing a CBD product.
It is highly advisable to opt for “.com” extensions, as they have higher chances of gaining acceptance by the online visitors. Once you have finalized a name for your website, you can visit GoDaddy.com to see if you can purchase the name. If you find out that someone else currently owns the domain name, then you can contact them and ask if they would be willing to sell you that domain name.
Step 8: Come Up With a Solid Business Plan
While CBD products are highly sought after in the market, you still need to study what specific products your target customers are into.
Rather than randomly purchasing the latest products for your CBD inventory, you need to ensure to add value for your customers. There are numerous types of CBD botanical extracts on the market. Some are supposed to be placed under the tongue while others are applied topically over the skin to be fully absorbed into the bloodstream.
You need to select a specific market niche regarding CBD product type. Are your target customers mostly looking for CBD to treat their bodily pains? Do they want to buy CBD beauty products?
Finally, you need to select the main source of financial injection to your business and a last-resort backup in case of a financial emergency.
Step 9: Choose the Right Suppliers
When it comes to running a CBD business, you have two major supply channels: growing your cannabis plants on a farm or purchasing processed CBD oil from a reliable supplier.
If you don’t have substantial investment capital, then it might not be possible for you to grow your marijuana products and bear all the labor expenses. So, you are left with only the option to procure your desired CBD products from a local supplier.
When you select a supplier, you should run the products through laboratory tests to ensure they fulfill the legal maximum THC concentration.
Step 10: Launch Your Business
Once you have taken care of all the above-mentioned steps, you can launch your CBD business.
After officially launching your business, you need to come up with strategies to retain your current customers and gain attention from new customers. You can expand your growth aspects by partnering with social media influencers. You can also ask your clients to review positive reviews about your products on blogs and online forums.
There is no denying the fact that the growth potential in this field is unparalleled.
We hope you were able to get insights about the topic “10 Steps to Starting a CBD Business in 2021”. By going through the above-mentioned guidelines you would be able to run your CBD business without any major hurdles and complications.
Most cannabis extracts have been illegal for the past century or so. The fact that they have just been legalized a couple of years ago has attracted thousands of new entrants including many vape stores.
You should acquire a combination of due diligence and innovation while starting your CBD business. This will help you reach your goals and grow your business.