When it comes to starting a business in the cannabis industry, owners and executives learn quickly about the financial realities and how it can be challenging to even stay afloat. Often, a company will spend twice as much or more in their first year and may still be adjusting in the years after. Whether you are starting a new business or have been facing the obstacles of the cannabis industry, we have some money-saving tips that may come in handy.
We looked at some of the common financial pitfalls of business owners and found budgeting tips to help your company save a ton. If you are launching your business soon or are currently weathering the storm of the industry, keep this list close by.
Delete Unnecessary Apps or Software for Your Cannabis Business
Taking a step back and analyzing your stable of apps and software programs can lead you to find ones that do not service your company well. You may also find software or apps that your company signed up for but barely uses. Create appropriate software criteria to weed out apps that just don’t help your cannabis business. Look at the monthly payments for each app and compare them to the worth of their functionality and how often they’re utilized. To keep things more organized for your cannabis business, you can use a money-saving app like Trim, which identifies where you may be spending unnecessarily. The app works on desktop and mobile, connecting to your bank account to give you simple summaries of where your money is going. There are also several free apps you can download for your startup cannabis business:
- Canva – design incredible graphics for your cannabis marketing campaigns
- CashBook – track your income and expenses the simple way
- Slack – easy-to-use business communication tool
- Asana – manage projects with your cannabis staff and stay organized
Transition from Paid Ads to Content Marketing
Paid ads can give your cannabis business a boost in leads or exposure. But it can get costly, especially if that is what you’re leading with. Content marketing, such as blogs, infographics, and videos, are meant to place useful information in the hands of your target audience. It’s less aggressive and more authentic, positioning you as a thought leader in the cannabis space. Since it is defined by what your audience wants, it is typically a more effective form of cannabis business marketing. And it cost less than traditional paid ads.
It has been proven to be a more cost-effective strategy. Content marketing produces three times the number of leads at 62% less cost when compared to traditional approaches like paid or sponsored advertising. Additionally, content marketing will boost your search engine ranking and domain authority if executed correctly. It may be more challenging to produce thought-leadership-quality content, but you’ll get more out of it for less.
Leverage Expert Consultants for Business Growth
Yes, consultants have high fees. However, with the right cannabis consultants, you can save tons of money in the long run. Consultants require a greater short-term investment, but their expertise increases the chances that problems are solved well, executives on your team grow their leadership knowledge, and vital projects are executed in the best way possible. You will avoid the investment of a full-time hire, saving on onboarding costs and the cost of a bad hire in cannabis—which can balloon up to $15,000 or more. Additionally, you’re not paying for the overhead costs of payroll expenses, insurance, and healthcare. With the right cannabis consultant, you identify emerging opportunities, find innovative ways to pivot, refine your business strategies, and gain the mentorship that will help your cannabis business move forward with confidence.
Use a Customer Referral Program to Advertise Your Company
Word of mouth is effective. But it’s not fast enough these days–so giving customers incentive to promote your brand is a better strategy. In a competitive arena like cannabis, companies need more entry points to leads. A referral program will streamline and scale the advertising process for your cannabis business, saving you both time and money. When you ask customers to share your brand, you will generate warmer leads more likely to purchase. The customer referral strategy uses the social proof theory—or “crowd wisdom”—to help you gain more customers. It’s human nature to mirror the actions of others (especially if they are friends or trustworthy acquaintances) in an effort to reflect correct behavior for a given situation, especially a novel one.
Also, by rewarding customers who promote your brand, you are engaging your best advocates and keeping them in the loyalty loop. With the right customer referral program, you’ll get more business with less effort and money. Providing your current customers an incentive for the referral program, such as a prize or special discount, is the best way to do it.
Hire Temps to Cut Down on Costs of Full-time Support
Keeping your full-time employees to sustain a core volume of work at your cannabis company is vital. But when you need to tackle more complex or bigger projects, you’ll need more support. However, expanding your team may not be an option. By hiring temporary employees, you can gain cannabis professionals immediately in any vertical. They’re trained, which means they can hit the ground running. Also, their onboarding is typically handled by the staffing company. Save on salary, training, benefits, and payroll expenses. And you can hire them for certain projects only or a specific timeframe. You decide on their hours. If you need C-level support, you can also consider hiring cannabis consultants. From business to marketing consultants, there are experts ready to help you get out of a rut and pivot efficiently to save your company money. Seek a cannabis staffing firm to get the temp employees you need.
Save Money on Cannabis Product Packaging
If your cannabis retail business is looking for ways to save money—one way you can cut costs without losing quality is through your packaging strategy. If you sharpen your forecasting and management of the costs of goods sold, you can plan and take advantage of price breaks. Packaging vendors usually offer deals at different quantity levels. So, strategize for future projects as well as you can. Next, you can thoroughly study compliance solutions. The packaging for many cannabis businesses is overkill. Excessive packaging costs more money and hinders the customer’s opening experience. Discover a simple and compliant packaging option that will cost less and produce less waste. Also, stick to simple packaging that protects the product. This will cut packaging technician labor costs and keep your operations team from being frustrated.
Gain Expert Guidance for your Cannabis Business with Fractional Executives
A fractional executive is an experienced, part-time leader typically used by startups to medium-sized businesses (usually seed to Series A stage). However, they are also useful for cannabis businesses of any size since the industry is still quite young. With a fractional cannabis industry executive, you can gain access to expert talent that isn’t in your budget if they were full-time. And they can guide you at the critical earlier stages of your cannabis business. With a fractional executive, you can cut overhead costs, saving money on salary, benefits, retirement, and vacation.
There are contract leaders for all sectors of the cannabis industry, including cultivation, financing, business strategy, and marketing. They may cost you a lot in the short term. But they can save you even more in the long run. For example, an accounting fractional executive can steer you clear of accounting mistakes that may sink your business, including penalties, cash flow problems, and IRS issues. You can hire fractional executives for a specific amount of time or for certain projects to gain their leadership for just a portion of their salaries. Pay for what you need only.
