Starting a CBD Company: What You Need to Know
Have you ever wanted to start a company and be your own boss? The demand for CBD products is skyrocketing. CBD, or cannabidiol, is a compound found in the cannabis plant that doesn’t have psychoactive effects – unlike its infamous cousin, THC. Entering the industry now could be a great opportunity, but like with any business venture, it’s not without its challenges. Considering the promising future of CBD and its increasing societal acceptance, you might be contemplating starting your own CBD company.
Keep reading to learn how to do it.
The Legality of CBD
Is CBD even legal? The answer varies between countries and states. In the U.S., the 2018 Farm Bill legalized CBD on a federal level – yet some states still forbid it. Knowing whether the law is on your side is the first step you must take before you even begin formulating a CBD business plan.
You’ll also need to understand the legal regulations you’re expected to abide by. At present, the FDA doesn’t allow CBD to be marketed as a dietary supplement. Instead, it is permitted for sale as a skin treatment or for ingestion, as long as the retailer doesn’t make unproven health claims.
Navigating these legalities can be complex. It’s advisable to consult a lawyer specializing in CBD and hemp products.
Starting a CBD Company: The Basics
The CBD market is vast and growing quickly. Popular product lines range from oils and tinctures to edibles and skin lotions. CBD-infused beverages for health-conscious millennials are all the rage.
In such a wide and competitive market, it’s vital to define a niche before you start selling CBD products. Defining your niche will help you stand out in a crowded market, know how to market your products, and know who to target.
Finding a Supplier
Unless you grow your own hemp, you’ll need a reliable manufacturer to provide your new business with products to sell. Whether you’re looking for powders, oils, or CBDa for sale, you should look for suppliers who provide third-party lab results verifying the purity of their products.
Registering Your Business
Every business needs a name. It’s a part of your brand, and you’ll have to register it with the appropriate government agency before you can start selling your CBD products.
You’ll also need to register your business with the IRS to obtain an Employer Identification Number (EIN). Every business needs an EIN, even if you’re the only employee.
Deciding How To Market and Sell
How you market and sell your CBD products will tell you a lot about your business strategy.
Do you plan to sell online? If so, how do you plan to attract customers, and what platform do you plan on using to sell your products? Shopify and Amazon Web Services are two popular options for small business owners.
If you wish to open a brick-and-mortar store, your business will likely need more capital to get off the ground, and you’ll need to secure a good site for your business with high foot traffic.
Creating Your Business Plan
Lots of people dream about becoming their own boss – but only the ones with a plan and the drive to pursue their dreams will get them there.
Your business plan is a fundamental step in starting a business, and you’re doomed to failure without one. It details everything you need to launch a successful company and should include:
- The financials
- Your marketing strategy
- A three-year roadmap
- Short, mid, and long-term goals
Good business plans attract investors. A plan backed up by thorough market research, realistic financial goals, and most importantly, the risks involved are more likely to find you the backing of a bank or other source of investment.
Your Product Line
You must understand the costs of growing, sourcing, or manufacturing your CBD. This includes packaging and shipping costs, as well as any additional overheads.
From there, you can hone in on a realistic pricing strategy, allowing you to reliably estimate your returns on investment over time.
Analyzing the Market
Your products are only one side of the coin. Market conditions are the other. Knowing what’s hip, what’s trending, and what new fad will flop isn’t easy – but doing thorough research will put you in the best position to make informed financial decisions.
Finding Starting Capital
Many small businesses need investors to get going. A detailed business plan is what separates your business from the pile and makes you an attractive option for investment. Remember – investors are looking to turn a profit.
Growing Success: Branding Your CBD Company
People connect with stories – and stories lead them to products. Share why you started your CBD company. Engross your audience in your values and your journey from a startup to a successful enterprise. Above all, teach your customers how your CBD products can improve their lives.
Educating Your Audience
The CBD industry is still in its infancy. Yet it’s a popular contender that offers potential benefits for audiences seeking natural alternatives. That’s what you need to teach your audiences.
There’s a significant gap among the public about what CBD truly is and the array of benefits it can provide. Unraveling the mysteries surrounding CBD, from the basics to the intricate details, will empower your audience with knowledge, enabling them to make informed decisions about making CBD (and your new business) a part of their daily lives.
Leveraging Social Media
Social media is your indispensable best friend in connecting with your target audience on a personal level. It’s dynamic and allows you to inspire, inform, and engage.
Using it effectively means devising an appropriate content strategy.
Your content should revolve around education and authentic, customer-centric inclusion. So, you should:
- Share informative content
- Excite the senses with visuals and infographics
- Talk about industry trends
- Post a healthy mix of text, image, and video content
Well-crafted content will dismantle misconceptions and reinforce your position as a trusted source of information – and a reliable CBD business.
Be a Part of the Future
The CBD industry is poised for significant growth in the coming years. By starting a CBD company now, you’re setting yourself up to become a thriving part of this exciting industry. But – as with any business venture – it’s important to plan ahead and be prepared for unforeseen challenges ahead. It’s all about your vision and your commitment to navigating the difficulties ahead of you.
Did you find our article helpful? Be sure to read some others in our business category!
