5 Steps to Start an Online CBD Business
The legal hemp market in the United States is projected to grow from $688 million in 2016 to $1.8 billion by 2020. Hemp-derived products have an annual growth rate of 53%. This makes it a great business opportunity for both established and aspiring entrepreneurs. Just like other lucrative business opportunities, Here are five steps to take in starting online CBD business in the CBD niches:
Here are five steps to take before starting an online business in the CBD niches:
1. Comply with the Rules and Regulations of CBD Processing
The federal government deems hemp-extracted CBD products legal, as long as they are derived from industrial hemp. If the THC levels are less than the legal threshold of 0.3%, then oils, supplements, creams, and other CBD products are legal and safe to sell. The CBD extracted from marijuana, on the other hand, has THC levels that can go from 15% to 40% which makes it federally illegal.
In starting a CBD Business without risks, you must prove that you comply with the state’s requirements. You should have your business EIN/TIN. Moreover, you should do thorough research of CBD processing and make sure that your products are directly made from industrial hemp. Most importantly, stay on top of the law to make sure you won’t break any.
2. Create a Robust Business Plan
Creating a CBD business plan should always be your first step, whether it’s a CBD business or not. It should provide details on how you plan to develop your business, how you will manage your finances, and how you will implement strategies to achieve your specific goals. With today’s technology, it’s easier to create a powerful business plan than ever. There are specialty software, consultants, and guides online to help you bring your vision to life. When crafting your business plan in starting a CBD business, be sure to include the following information:
- Customer and market analysis
- Financing methods
- Marketing plan
- Products and services
- Strategy and implementation
- Sales forecasts
A CBD business plan can come in handy in managing your business, but most importantly, in applying for financing. Your business will eventually need one in the future. With that, it’s better to prepare so when the time comes, you’ll have crafted a good business plan that will ensure a loan approval.
Related: 8 Things Lenders Want to See in Your Business Plan
3. Find Reliable Suppliers to Sustain CBD Online Business
Whether your goal is to distribute, resell, or create your CBD products, you need to look for a reputable CBD supplier. By doing this, you’ll be assured to receive products that meet the requirements. Aside from that, you will ensure you’re providing your customers with top-quality products. This, in turn, will boost customer relations and will lead to more people coming to you to do business. It also
helps to sustain the demand for your CBD online business.
Refer to the following ‘qualification’ list (below) when selecting a supplier:
- Extraction method
- Certificate of Analysis (COA)
4. Build and Optimize Your Business’ Website
If you want customers to patronize your brand and maximize your revenue, it’s important to create a fully functional website. It’s one of the keys to starting online CBD business. You can hire a web developer to make sure it’s aesthetically pleasing, content-rich, easy to navigate, and mobile-friendly. This will encourage your customers and provide them with confidence when purchasing products from your business.
5. Market Your Business
After complying with the rules, creating your professional business plan, finding suppliers, and building a website, it’s time to market your business. You can make use of display ads, SEO, and make a point of providing exceptional customer service.
Once you have your business up and running, naturally, people will have a lot of questions for the products you’re offering. You should be prepared to answer a handful of these. Train your staff to do the same as well. Provide accurate information and give them a reason why they should avail of your products.
Aside from talking, you should also be good at translating your business into words. Use social media and the internet to reach more audiences. Chances are, people love reading a good article about Cannabis. Be sure to provide it to them. The more informative your piece is, the higher their interest in your products will be.
Are You Planning on Starting Your Own CBD Processing Business?
CBD processing can be difficult. It’s even harder for CBD wholesalers or retailers to qualify for a merchant account. But a lot of financing institutions can allow businesses to connect with a Top 5 US Bank/Merchant Processor. On average, an account can be set up in three to five business days, and the funds from your sales deposited within 24 to 48 hours.
To qualify, you should only sell hemp-derived products that contain less than 0.3% THC. You must also comply with local, state, and federal regulations. CBD is a lucrative business, but one misstep could cause the downfall of your company. Do it right, and you will see your business boom in no time.