How to Build a CBD Business — Starting a CBD Store
10 February 2021
The recent legalization of CBD (cannabidiol) has opened up a world of potential for entrepreneurs. They want in but want to know how and what the costs involved are. Hopefully, this article will guide you and give you the answers you need. We will give you a how-to on building a successful CBD business.
Choosing a CBD Business Name
This step is fun but undoubtedly important when considering how to build a CBD business . Your business name needs to represent your niche market to tell your customers that you mean CBD business and that you’re good at it. Here are some tips to help you with the process:
- What do you want your business name to represent: This depends on your preference – do you want something catchy? What do you want people to think when they see your business name? What are the names of your competitors and do you like or dislike their names? Etc.
- Brainstorm it: Try to be open-minded and use free-thinking to come up with a few to choose from.
- Make a decision: Go through the list of names you have made and shortlist them according to what you are looking for and which ones capture the essence of your business. Then make the final decision.
- Register your name: you can first check that your chosen name isn’t registered already. You can use the Trademark Electronic Search System (Tess) to help you. Once you have done this, you can register your business name with your state authorities.
Create a CBD Business Plan
The sale of CBD products is still somewhat taboo. The FDA ( Food and Drug Administration) is yet to research to prove that CBD works to alleviate health issues. In the meantime, people have shown great interest in using the products. So, it was legalized but there are hefty laws.
A clear cut business plan is an important key to succeeding and knowing what costs will be involved when considering how to build a CBD business. It should be noted that many banks are reluctant to give CBD business owners loans, nevertheless, if it is possible in your state to get a loan, they will want a business plan. The following tips are to help you with your business plan.
- Decide on a target market: You need to decide who your customers will be so that you can put good marketing plans in place to attract them. You would need to consider online and offline marketing techniques.
- Research the costs involved: You cannot start a business blindfolded. To consider what it will cost, you need to decide if you are going to start with an online store, a brick-and-mortar store, or both. We will discuss the stores you can choose later in this article.
- Calculate how long it will take to make a profit: It is wise to calculate how you will carry your business financially for the first year. It helps to consider financial forecasting and budgeting and analyzing the recorded and estimated cash flow. You can use financial packages like Quicken, Norton Small Business, Wave, or Xero (XROLF) to help you.
Open a Business Account
You need a business account to handle all your transactions when you build a CBD business. It is always best to have a separate business account rather than merging it with your personal account. If you want to save costs, it is best to do your homework to determine which bank accounts in your state support CBD businesses, due to legalities, and which ones offer the best transaction fees and services.
Choosing a CBD Store
When considering how to build a CBD store you need to decide if you want to open a physical, brick-and-mortar store, start an online cbd store, or both. Your startup costs will be different for each. Brick-and-mortar stores will require you to pay for rent and possibly put down a deposit in the beginning. You will also need cash to buy physical stock to sell in your shop.
If you decide to go the online route, it can cost a little less since there are great platforms, like Wix, where you can start for free, but if you want to show up in a competitive space, you would need to optimize your website and online store and this comes with a price. Doing both is great, but it will require more effort and money. Before deciding, speak to other CBD business owners.
Once the other stuff is in place you can look at getting a standard business reseller’s license, which is mostly needed for online stores. It’s good to research to see if any other license are required by your state. Doing this will prevent any run-ins with the law later on. The cost of the license depends on your state.
These tips will guide you when considering how to build a CBD business. The cost to start a CBD store depends on many factors such as where you live, the type of store you choose, and other important necessities such as registering your business name, licensing and opening a business account. To be successful, it is important to develop a sound business plan so that you have a good idea of how you want to build a CBD business, this will make budgeting an easier task. Being well prepared financially will make your success more likely.