business mistakes

The cannabis industry is huge, and it is only going to grow as more states and countries legalize recreational cannabis in the coming years. All that growth provides ample opportunity for entrepreneurs to find success in this space — but because the industry is so new, it isn’t always clear which business plans will lead to success.

Fortunately, first-time cannabis entrepreneurs can learn from the mistakes of business owners who have gone before. Here are a few of the most common business mistakes in the cannabis industry and what up-and-coming entrepreneurs can do to avoid them.

Rushing the Opening

The cannabis industry is growing right now, so it is tempting to try to get a business open and operating as soon as possible. However, that doesn’t mean entrepreneurs should skip critical steps in business planning and development. Rushing to open is a good way to make devastating mistakes that cripple a business’s ability to function, all but ensuring it will be outmaneuvered in this competitive and cutthroat industry.

Taking one’s time to research the market and build a business and brand that customers crave will yield long-lasting success. Especially in areas where cannabis industry is brand-new, it might be better for entrepreneurs to learn from the wins and losses of a few canna-businesses before solidifying their plan and hanging their shingle.

Neglecting the Business Plan

Speaking of the business plan, canna-entrepreneurs definitely need one. Contrary to popular belief, a cannabis-related business isn’t destined to succeed; even in a bull market, businesses need strategies to attract customers, manage finances and foster growth. A business plan should be a formal document explaining what a business is, what its goals are and how it will accomplish them. For canna-entrepreneurs, there are two critical aspects of the business plan to consider:

Products. Cannabis is an incredibly flexible and diverse drug, and there is an entire world of products for canna-entrepreneurs to consider creating or selling. It might be worthwhile to investigate and perfect niche products as a means of carving out a special space for a new business.

Location. Different states have different regulations regarding cannabis, and some states are much friendlier to canna-businesses than others. Entrepreneurs might consider launching in a state with more established pro-cannabis laws and expanding into other states as possible, though this will mean competing with a larger number of cannabis brands.

Partnering With Just Anyone

Securing funding can be difficult for entrepreneurs in the cannabis industry as many traditional financial institutions refuse to lend money to weed startups. Unfortunately, this means many canna-entrepreneurs are willing to take money from just about anyone — but that probably isn’t a smart business strategy. Business partners tend to exert profound influence on business strategy, and if a partner doesn’t understand the cannabis industry, they might make poor decisions that end in business failure. Cannabis experience is a must for any business partner, and employees, too, should be knowledgeable and passionate about the field.

Ignoring the Cannabis Community

The legal cannabis industry is brand-new compared to the age of the cannabis community. In addition to leveraging the skill and knowledge of cannabis users as partners and employees, entrepreneurs need to be careful to pay attention to the cannabis community at large, working to understand their shifting wants and needs. For example, weed has been available in California for more than a century, but these days, many Cali cannabis consumers are interested in the most cutting-edge products. In contrast, the cannabis culture in Virginia is relatively small and new, and marijuana mainstays will likely meet consumer needs just fine. Entrepreneurs should engage with their customers, in-person and online, to better identify the demands of their market.

Forgetting Shifting Regulations

Cannabis regulations are far from set in stone. Even in states where recreational weed has been legal for approaching a decade, the laws continue to change. For example, most cities and states outlawed at-home cannabis delivery — until the 2020 pandemic, when delivery allowed businesses to operate safely. A canna-business strategy that adheres to the law today might need to be updated tomorrow, especially if laws shift in ways that give businesses more flexibility in fulfilling consumer needs and wants.

The cannabis industry might be big, but canna-businesses can still fail. First-time canna-entrepreneurs can find success while making mistakes — but the fewer mistakes made, the better.

So, you’re looking to build a startup and follow in the footsteps of greats like Steve Jobs, Elon Musk, and Michael Dell. Great choice!

But before you go about making the world a better place and filling your pockets, you’ll want to get some advice.

90% of startups fail, after all, so the right startup business tips can keep you from making these same mistakes. Keep reading to find out how you can prepare for success!

Don’t Chase Trends, Solve Problems

There’s money in chasing trends. However, that money dries up quickly once people move on to the newest flavor of the week.

For your startup to have longevity, you should aim to solve customers’ problems. How can your product or service make the lives of your customers easier?

If you can manage to make people’s lives a bit more convenient, you’ll find yourself with repeat customers, and thus, stronger revenue.

Set Your Business Apart with Custom Packaging

The more ways you can set yourself apart and stand out, the better. Custom packaging is an often overlooked way to help your company stand out.

Think about it: if you were in a room full of packages, you’d be able to suss out the Amazon package in a matter of seconds thanks to the logo on its shipping boxes and its custom tape.

You can use the same strategy for your business! Once you have a logo you’re satisfied with, order labels online and customize your shipping boxes. That way, customers will get excited about their order before evening opening the box.

Know When to Outsource

Even if you’re an expert multitasker, there’s never quite enough time in the day. But don’t think you have to tackle everything yourself.

In fact, doing so might be detrimental to your business.

Instead, consider outsourcing certain tasks that either take up too much time or require too many resources.

Let’s say you’re looking to market your company. Instead of dedicating hours to learning the ins-and-outs of managing a campaign, subscribing to services, and carrying out the task yourself, you’d be better off hiring a dedicated marketing company.

While it might cost a bit more upfront, you’ll ultimately get better results since you’re working with a team that knows their stuff.

Research Tax Tips

69% of startups are headquartered in the founder’s home, continuing the long tradition of home-based businesses like Apple, Amazon, and Google.

It’s a smart move, as working out of your home can save you tons of money on rental space. But did you know that you can write off the office space in your home for a tax bonus?

Small business taxes are killer, and you’ll need every tax cut you can get. Keep track of your expenditures, whether it’s a chair for your office, a hotel room for a conference, or even your Internet service.

Create the Next Big Thing with These Startup Business Tips

By following these startup business tips, you should have a strong foundation for your business that allows you to save money, time, and manpower. Now all that’s left to do is put your plan into action!

Don’t forget, we’re here for you! Keep checking back with our blog for more great startup tips.

Tag: business mistakes

Common Canna-business Mistakes First-time Canna-preneurs Can Avoid