Creating a successful business takes more than just proper planning. Having solid business operations in place means that you are setting yourself up for a fruitful future.
Creating a successful business is not easy and there are many things that a company needs to be successful. Here are the key elements to being successful in the cannabis space. This article does not include product development and the marketing side of a company.
Successful Business Operations Framework
Understanding your business structure is incredibly important when starting a business. There should be a solid founder that sees the long term and makes most of the final decisions. There should be another layer of management and whomever is in charge should understand what your company is doing and how everything should function. This may change over time, but in the beginning it is smart to have a clear idea of what is expected of everyone in the company.
This usually comes together in the form of a business plan. Which you will need to have in order to find investors, get funding, or you should have even if you are just bootstrapping it. You will also need all of this information together if you are applying for a license, or hiring a consultant to assist with licensure. They will need all of this information to determine what licenses to apply for will be included in the actual application itself.
Have the Proper Paperwork
Making sure all of your financial and law paperwork is in order before you get rolling. Finding a good lawyer and accountant in the beginning will save you from major heartaches down the line. Most companies that fail, are failing for one of two reasons. Either they aren’t operationally compliant with the rules and regulations or they don’t have their finances in order. By knowing how much money is coming in and going out, what stock is stuck in inventory, or being used in other inefficient ways are some of the biggest hurdles seen in an unsuccessful cannabis company.
Many companies in general don’t understand the basics of money management. Therefore, it is highly recommend to find an accountant in the cannabis space that understands the nuances of the industry. The lawyer you work with should also be a cannabis specific lawyer. Having one on retainer just in case you need them is always a good thing. They can answer questions that sometimes consultants can’t. Also, if you ever get into trouble they know exactly how to help you out.
Aim to be Continually Compliant
Being compliant with regulations, mainly operational compliance, is very important for long term success in the cannabis industry. Not being in compliance with state regulations is incredibly important in order to mitigate the risk of fines, closure, disposals, recalls, and loss of license. Once you are compliant with state regulations, look forward and continue to be compliant with already existing federal regulations. You can trust that the FDA and OSHA are going to be in your facilities. Being compliant with their standards will not only protect you once they start regulating, but also mitigate your risk of food and worker safety issues in the meantime. We usually recommend at the very least being compliant or certified to cGMP standards to start. Then continue to work to become compliant with all OSHA standards as well.
The longevity of a company is almost always based on compliance in any industry where consumable products are involved.