As a newly emerging industry, the world of legalized cannabis is going through some growing pains, and there’s no end in sight. Those currently working in the industry have an idea of the complexities involved. Some of these issues are typical self-inflicted startup woes; others a result of constantly changing regulations. Let’s face it, building a new business in a new industry at the same time isn’t for the faint of heart.
To streamline and focus your efforts, here are five key tried-and-tested methods for growing your cannabis business to its full potential.
Put the ‘PRO’ in Process
Accomplishing anything without a process is a recipe for inefficiency (and disaster). The name of the game is growth, and to do that, you need to be good at what you do. Successful operations will create and implement processes — and improve upon them — to maximize efficiencies and economies of scale. Scale in this sense provides the economic power that can be funneled back into the business, resulting in continued growth. Re-evaluate and repeat. If you do it right, you’ll be moving toward profitability.
Recipe for Teamwork
The right people in the right roles can move mountains, and the wrong fit can be detrimental to the entire organization. The reality of the current cannabis climate? Things change fast, and that includes job roles. An employee thriving under current conditions might struggle when things (including processes and regulations) change.
The reality is that to reach full potential, a business has to evaluate and meet current needs and look ahead, anticipating required skill sets, and developing current employees for what the business needs in three months, six months, and a year from now. This means businesses are constantly proactive — ensuring the team is constantly in sync with the current and future needs of the industry. The right team with the right set of skills helps to ensure long-term growth at the fullest potential.
Once time has passed, it’s gone, You can’t rewind the clock. As a business grows and additional opportunities arise, it’s all too easy to say “yes” to everything that comes your way. Time is a precious resource and should be treated as such. There’s an endless supply of new events, new product ideas, new growing or processing methods, new partnership opportunities . . . avoid falling into the trap of agreeing to everything.
So be strategic. Remain disciplined. Focus energy and time on things specific to your core business goals. That’s not to say you can’t be aware of what’s new and shiny out there — quite the opposite. As time and resources become available, and the business is growing, there will be ample opportunity to review and consider incorporating new things (strategically) into operations. But in the meantime, maintain the business, build momentum, and try to stay focused on the initial game plan.
The Money Tree
It takes a lot of cash to start a cannabis business and even more to grow one. Now take the option of bank loans off the table, and the reality of cash flow hits hard. It’s easy to run out of cash in this industry. This rings especially true when businesses must invest in regulatory-specific infrastructure — and as seen time and time again, the regulations change as the industry continues to develop — and that means reinvesting into additional, non-anticipated ‘required to operate’ business expenses.
When operating a growing business on dwindling cash reserves, the situation can be even more dire. Growth, while good, also means more packaging, additional employees, and that means higher operating costs. Also, larger customers typically mean longer collection terms, and the potential cash crunch builds.
Remember you’ll need cash before you realize you need it. Raise capital thoughtfully. Choose investors carefully. Be diligent about tracking and monitoring cash flow and play the long game, so you’re ahead of the curve and raising additional money before you really need it. Then get back to work on growing the business. Refuse to have your success slowed by cash flow issues.
It’s hard to run a successful business if you’re exhausted or burnt out. You can’t press ‘pause’ on your life to operate a business 24/7. It’s not realistic, and even if it works for the short term, it’s not sustainable. So while it might seem impossible to meet the demands of operating a business, while being a parent or spouse, and manage to make time for some self care, it can actually help balance everything out.
If you’re present, rested, and have a semblance of life outside the job, your performance and effectiveness can improve at work — it’s often a matter of focusing on the positive — stay aligned with what is important and what’s working rather than devote any precious time or effort on distractions.