Research suggests (and our experience confirms) that 40% of all Cannabis dispensaries and shops close for good. Make sure you’re on the right path and avoid these simple mistakes.
1. You never created a business plan
A business plan will help you determine the need in your market, realistic goals for your company, how your company will reach them, and how much it will cost. If you fail to create a comprehensive business plan – it is only a matter of time until your company goes under or, at the very least, runs into huge fiscal and scaling problems.
2. Too little financing
Bootstrapping a business is an American hallmark. Where this goes awry is in the stiff competition developing in the cannabis market. This doesn’t make it impossible to grow your business – but will require a very slow and methodical approach to its growth (see business plan).
3. Bad Location, Marketing, and Branding
As a branding agency, this is an easy reason to pluck out. In fact, we’ve seen several great companies and products disappear from the market due to poor branding efforts. The product either gets outsold on the floor or their sales fizzle out as new products and brands emerge. It’s the unfortunate truth for business owners that no matter how quality their product or store is, poor or non-existent branding can oust their company from the market.
4. Expanding too quickly
Sales are going well, so it’s time to expand, right? Understand first that a new store (or product) means starting all over again. And with the financial and resource drain of opening up a new dispensary, or developing a product line, can sink the business quickly. You should have your valuable metrics (KPIs abound) thoroughly developed before considering opening up that new location. No sense of killing the entire business with lack of forethought.
Running a business can be difficult. You may consider hiring a branding agency or business consultant to help take your company to the top (and avoid a crash). Make sure to do your due diligence when hiring outside consultants and agencies to make sure they’re a good fit.