Is all forward momentum for a fledgling cannabis companies a good sign? The short answer is yes — but it’s not all created equal. There’s a difference between scaling vs. growing. As leaders of cannabis companies strategize for success, it’s vital to know the goal. Let’s discuss each growth pattern, what it looks like for canna-businesses, and how your company can achieve its chosen goals.
Scaling vs. Growing
First, let’s talk about the primary difference between scaling vs. growing.
Growing a business is about increasing revenue, market share, and the size of your team. It is a linear process, meaning that as your business grows, so do your costs.
Scaling a business is about increasing revenue without a substantial increase in costs. This is achieved by making your business more efficient and by finding new ways to reach customers.
3 Keys to Scaling Cannabis Companies
If you’re in the cannabis business and looking to scale, you should know that your success will depend on several factors — but let’s highlight the following three keys today.
1. Have a clear vision and strategy
Your vision is your long-term goal for your business. What do you want your business to achieve in 5, 10, or even 20 years? Your strategy is how you plan to achieve your vision. It should be specific, measurable, achievable, relevant, and time-bound.
When developing your strategy, it is important to consider the following factors:
- Your target market. Who are you selling to? What are their needs and wants?
- Your competitive landscape. Who are your competitors? What are they doing well? What could they be doing better?
- Your strengths and weaknesses. What are your business’s unique strengths? What areas do you need to improve?
- The regulatory environment. What are the cannabis regulations in your state or country? How will they impact your business?
Once you have a clear understanding of these factors, you can develop a strategy for scaling your business. This strategy should include specific goals, timelines, and resources needed to achieve your goals.
For example, if your vision is to be the leading cannabis companies in your state, your strategy might include the following goals:
- Open 10 new retail stores within the next two years.
- Increase sales by 20% each year.
- Launch a new online retail platform.
- Expand into new product categories, such as edibles and concentrates.
To achieve these goals, you would need to develop a plan for securing funding, hiring new staff, and finding new retail locations. You would also need to invest in marketing and advertising to reach new customers.
2. Build a strong team
Your team is one of your most important assets. You need to hire experienced and talented people who share your vision for the business. You also need to create a culture that fosters collaboration and innovation.
When hiring new team members, look for people who have the following skills and qualities:
- Experience in the cannabis industry. It is important to hire people who have experience working in the cannabis industry. This will help them to understand the unique challenges and opportunities that cannabis companies face.
- Passion for cannabis. Hire people who are passionate about cannabis and the benefits it can offer. This will help them to be more engaged and motivated in their work.
- Strong work ethic. Hire people who are hard-working and dedicated to their jobs.
- Teamwork skills. Hire people who are able to work well with others and collaborate effectively.
- Problem-solving skills. Hire people who are able to think critically and solve problems creatively.
Once you have hired a strong team, it is important to create a culture that fosters collaboration and innovation. This can be done by providing opportunities for team members to share ideas and feedback, and by encouraging them to take risks.
3. Invest in technology
Technology can help you automate tasks, improve efficiency, and reach new customers. Invest in the right technology for your business and make sure your team knows how to use it effectively.
Some of the technologies that cannabis businesses can invest in include:
- Point-of-sale (POS) systems. POS systems can help you to track sales, inventory, and customer data.
- CRM software. CRM software can help you to manage your customer relationships.
- ERP software. ERP software can help you to manage all aspects of your business, from accounting to manufacturing.
- E-commerce platform. An e-commerce platform can help you to sell your products online.
- Data analytics software. Data analytics software can help you to track your business’s performance and identify areas for improvement.
By investing in the right technology, you can automate tasks, improve efficiency, and reach new customers. This can help you to scale your business more effectively.
Three Keys to Growing Your Cannabis Business
Unlike scaling, growing means the input typically matches the desired output. For sustainability reasons, many businesses focus on this type of success. That said, here are three keys for ideal yet consistent growth:
1. Invest in your product
The quality of your product is the most important factor in growing your cannabis business. Customers will keep coming back if they are happy with the products you offer. Invest in high-quality genetics, nutrients, and equipment to produce the best possible product.
2. Build a strong brand
Your brand is what sets you apart from your competitors. It is important to develop a strong brand identity that resonates with your target market. Your brand should be reflected in everything you do, from your website and marketing materials to your product packaging and customer service.
3. Build relationships with customers and partners
Relationships are key to growing your cannabis business. Get to know your customers and build relationships with them. This will help you to understand their needs and wants, and to develop products and services that meet those needs. You should also build relationships with other businesses in the cannabis industry. This can help you to expand your product offerings, reach new customers, and reduce costs.
What’s Better, Scaling or Growing?
Scaling and growing have similar goals, but different ways of getting there. It only makes sense that your company’s objectives determine the best path to profitability.
On the one hand, focusing on growing over scaling work well if:
- You have personal goals you’d like to achieve.
- You’d like to create new jobs.
- There are new markets you’d like to enter.
- You’d like to increase your market share.
On the other hand, scaling might be a good fit for your canna-business if:
- You’d like to increase profits
- Attracting investors is a primary goal.
- Being competitive is important to you.
- You’d like your operation to be more efficient.
Take Home Message
Scaling and growing are two different business strategies. Scaling is about increasing revenue without a substantial increase in costs. This is achieved by making your business more efficient and by finding new ways to reach customers. Growing is about increasing revenue, market share, and the size of your team. It is a linear process, meaning that as your business grows, so do your costs.
Insurance can support companies on either path to profitability. For companies that are scaling, insurance can help to protect them from unexpected risks, such as property damage, liability lawsuits, and employee injuries. This can free up management to focus on growing the business without having to worry about the financial consequences of unforeseen events.
For companies that are growing, insurance can help to manage their risk exposure as they expand into new markets and offer new products and services. Insurance can also help to attract and retain employees by providing them with important benefits such as health insurance, life insurance, and disability insurance.
Protecting your cannabis companies can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help! Please reach out to us today by emailing [email protected] or calling 646-854-1093 for a customized letter of commitment or learning more about your cannabis insurance options.