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The global cannabidiol market reached $5.18 billion in 2021. Between 2022 and 2030, the industry could expand by 16.8%. The rising acceptance and use of these products in an attempt to ease anxiety and pain grows every year. If you want to learn how to start a CBD business, you’ll need an effective plan to stand out in the industry. Otherwise, you might struggle to gain a competitive advantage or attract customers.
Read on to discover the top CBD business tips you need today!
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Consider Why
Before starting a CBD business, take a moment to consider why you’re starting it. Every business should have a unique purpose, mission, and drive. Otherwise, you could struggle to differentiate yourself in the industry.
Knowing your “why” will also help inform some of the business decisions you’ll need to make.
Your desire to start a CBD career isn’t a wish or hope. It’s the reason you get out of bed every morning, open your doors, and even why you make tough business decisions. Without your desire, you might struggle to make some of these choices in the future.
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Gather Research
As you begin working through this CBD business guide, it helps to gather research before you make any actinal decisions.
Start by completing a SWOT analysis. Research the current CBD industry to determine your Strengths, Weaknesses, Opportunities, and potential Threats.
Completing a SWOT analysis could help you recognize opportunities where you can stand out within the CBD industry. Recognizing potential weaknesses can help you develop a plan for navigating those problems in the future.
Competitors
Take the time to research your competitors as well. What are they doing well (and where are they lacking)?
Gathering research about your competitors can help you determine how to differentiate yourself within the CBD industry. You can determine your competitive advantage, which could help consumers choose your business over any other.
Audience Research
Next, research your audience. While you might want to reach every demographic, that’s not always possible or relevant. Instead, determine who you want to reach to adjust your brand to appeal to those consumers.
Who your customers are will dictate your marketing, blog content, packaging, and more. You can personalize your brand to appeal to your customers. One way to do that is by using professional cannabis packaging that is sustainable and looks attractive to your audience.
Determine who your customers are based on demographics (age, gender, location, etc.). Consider psychographic research like buying behaviors, online behaviors, and pain points.
For example, maybe your customers experience topical pain. You can offer these customers a topical CBD lotion that could provide relief.
Regulations
It also helps to learn as much about the local and federal regulations relevant to the CBD industry.
Commercial production of hemp first became legal in the US after the Farm Bill was passed in 2018. The bill allows the sale of products that contain hemp-derived CBD.
You’ll also need to learn about the restrictions that are set in place. For example, you can only sell CBD products that contain 0.3% THC or less.
Make sure you have a full understanding of all state and federal regulations that might impact your CBD career.
In some states, you’re required to have a special license before you can sell CBD. Make sure to review your state laws before you begin selling products.
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Develop a Business Plan
Your business plan will outline your objectives and specify how you intend to accomplish your goals. It includes details about financials, operations, and marketing.
Developing your business plan will help you secure funding, strategize, and ensure your business experiences long-term success.
You can also use your completed business plan to attract investors.
Within your business plan, make sure to specify the CBD products you intend to sell. For example, you might consider:
- Topicals
- Bath bombs
- Oils and tinctures
- Sprays
- Pills
- Edibles (gummies, chocolates, etc.)
Next, make sure to register your business. For example, you might use the LLC structure.
Once you register your business, request an EIN/TIN with the IRS. You can begin sourcing and selling products once you have your business license.
You can also include information about your plans for a CBD supplier, too.
For example, you might consider creating your own products, which will give you more control. Otherwise, you can partner with an existing brand or drop shipper.
Establish a plan for pricing, shipping, and handling as well.
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Apply for a Merchant Account
Make sure to apply for a CBD merchant account long before you intend to open your doors or sell products. The process takes four to six weeks.
There are about seven banks in the US that offer CBD processing.
Does Stripe process payments for CBD? You can go here to learn more.
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Plan for Marketing
In order to attract customers to your business, you’ll need a marketing strategy.
First, establish a distinct brand. Your brand includes your:
- Mission statement
- Vision statement
- Voice
- Tone
- Personality
- Logo
- Font styles
- Imagery styles
Maintain a consistent brand as you use the rest of these marketing tips.
Next, get a domain and start building a company website. Your website will market your business 24/7. You can help consumers learn about your vision, products, and the CBD industry.
To help people find your blog content, use search engine optimization (SEO). You can also attract traffic with pay-per-click (PPC) advertising.
To engage your audience, use social media marketing. You can share information, market your products, and answer questions.
Otherwise, nurture the leads you generate through your website with email marketing.
How to Start a CBD Business: Use These 5 Easy Tips for Success
Learning how to start a CBD business doesn’t have to feel stressful. Instead, use these five simple tips to get started. Develop a strong business plan before opening your doors to start with a strong foundation.
With a plan in place, you can set your business up for lasting growth.
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