Step 1: What will your business idea be?
This may sound like common sense, of course you need a business idea to start a business, but there is more to this question than just a business concept. A vital component of starting your own weed-related business is deciding in which market you want to operate it.
There are numerous industries you can tap into that fall under the marijuana umbrella. Do you like working in fashion? Are you passionate about the science behind creating the perfect strain? Were you gifted with a green thumb? Are you a talented glass blower, carpenter or metalsmith?
The possibilities for your future cannabis venture are endless. Consider what you’re passionate about and add a little weed to it. You can launch a marijuana-friendly bed and breakfast, a combined cannabis and yoga class or weed infused candles.
Advice from cannabis experts
Here are a few helpful tips for succeeding in the marijuana industry when determining your business idea:
Stay focused: There are so many opportunities available in the weed industry right now that it’s tempting to try and offer everything and go in a million directions. “The more focused you are on the course you set out to achieve, the more successful you’ll be,” says Karson Humiston, founder and CEO of Vangst Talent Network, the cannabis industry’s leading recruiting resource.
Ensure you’re compliant: You can’t work around the current and future regulatory, tax and legal requirements when operating in the weed industry. “If you don’t have the discipline to follow a strict regime of self-auditing your business to stay ahead of compliance rules, then hire a team who can help,” says Jonathan Barlow, Senior Partner at the Cannabis Practice Group, a Detroit-based consulting firm in the cannabis business marketplace.
Hire great people: Your team are the system that makes your idea a reality. Your business, no matter how amazing the idea, is only as good as the people executing the idea. “Successful execution requires a great team,” says Humiston.
Be a good neighbour: A cannabis business, even one that doesn’t actually sell recreational weed will have both positive and negative perceptions. Ensure you stay on your neighbours’ good side by following the law and positively contributing to society. “Support the community and collect data on your positive impacts in the areas of hiring, taxes paid, property value increases, and other data that demonstrate your contributions,” says Barlow.
Here are a few questions you’ll need to ask yourself when coming up with your business idea:
What’s the right market for your cannabis business?
“You need to identify what’s right for you, and most importantly, configure what you are looking for: Is it a quick, profitable pop in the industry, or do you want to make a long-term investment?” says Daniel Sax, founder of Sensi Properties, a real estate company specialising in solutions for the cannabis industry.
The first fundamental step towards developing roots in the South African marijuana industry is finding fertile soil. Take one of your interests, passions, hobbies and see if you think it’s a viable concept within the weed industry. If it is, then roll with it. If it isn’t then move on and find something else worthwhile.
Does your business idea solve a problem?
The best and most sustainable start-ups tend to solve a problem for their customer base. 47% of all start-ups fail because there’s no market need for what they’re making, according to market research firm CB Insights. To ensure your start-up is part of the other 53% you’ll need to solve a problem people within the cannabis industry are experiencing.
Have you tested your idea with your potential customer base?
You won’t know if there’s any demand for your business until you test it on your customer base. “Test it – not just with friends who will be too polite to tell the truth but with honest people who would make up your ideal target audience, and then listen to the feedback,” says Lisa McCartney, chief “PLYTer” at educational math board game company PLYT.
“If your target sample is saying your idea is fantastic and asking where they can get it, you know that you’re onto something, but if they are less than enthusiastic, it’s probably not as good an idea as you thought.”
Will people pay for your idea?
“An idea is just an idea until you have a paying customer attached to it,” says Wil Schroter, co-founder and CEO of Fundable. “Anyone can discredit a simple idea, but no one can discredit paying customers.”
It’s paying customers who will validate your idea and determine if your business has a chance of success. If customers aren’t prepared to pay for your product, you’ll need to investigate why. Is it because it doesn’t solve a need or because a competitor offers the same thing for cheaper?