The cannabis industry is only growing and any business owner looking to make a splash has likely considered starting a cannabis business. While recreational marijuana and the marijuana business are booming, there’s another segment of the cannabis industry that is proving to be equally popular: CBD. If you’re interested in fulfilling an ambitious goal in the cannabis business and starting a small business dedicated to CBD, there are a few things to know about your strategic plan and acquiring working capital.
Cannabis Business Loans Explained
For many a traditional bank, local bank, or financial institution, it’s seen as risky to be a lender to a cannabis business. This is because products like CBD and medical marijuana are still under great scrutiny from the federal government. Many banks and lenders try not to get involved with a business loan that may be assessed at the federal level. That’s why many cannabis loans come from alternative lenders. Alternative lenders differ from your standard credit union because they’re more invested in projects like cannabis financing. Where traditional lenders might not want to give a bank loan to alternative businesses like dispensaries, alternative lenders see the opportunity for growth and expansion.
For cannabis entrepreneurs, acquiring cannabis financing necessitates that you have a robust business plan in place. How will you handle difficult times as a CBD or cannabis business? Will you sell other products like recreational marijuana? If you’re aiming to be a medical marijuana dispensary that also carries CBD, what’s your plan for paying back your small business loan? You should be able to answer all of these questions when discussing financing options.
If you have all of these specifics buttoned up, you shouldn’t have to worried about federal law or the federal government as long as your startup is in an area where the sale of CBD is legal. Navigating the financials of a new cannabis business is only half the battle, however. Once you’ve secured cannabis financing, you need to look at some of the best practices of achieving quarterly objectives.
OKRs and a CBD Business Plan
So, you have an ambitious goal and you’re trying to get team members aligned on a personal level. This is where it’s time to develop a set of key results. Typically, this is done with the use of OKRs. OKRs or objectives and key results help new businesses and veteran operations assess how their key results are performing. Typically, at the end of the quarter, you set goals for your business plan. Then, months later, at the end of the quarter, you review those previous goals and make adjustments moving forward. OKRs work on several levels. You can have company OKRs that provide an overview of the large-scale goals cannabis entrepreneurs hold. You can have a department OKR that shows you how specific units in your business are performing. You can also have individual OKRs that give your team members ambitious, but manageable goals following the OKR methodology.
Often, when using OKRs, businesses tend to employ weekly check-ins as well and adjust goals on a sliding scale. For instance, if you’re a medical marijuana dispensary that also has a license to sell CBD for recreational use, one of your OKRs could be to push CBD oil sales. If you’re struggling with the OKR process, you can always bring in OKR software to help keep yourself and your business on a balanced scorecard that details your performance. With OKR methods, you can also use a stretch goal to help keep your business in a great place even during difficult times.
Breaking into the cannabis business is difficult yet rewarding. Take time to review financing options, secure a small business loan, and look into the OKR process for your startup. There’s a lot of potential in the sale of CBD if you know how to harness it.