And today, we're trying to answer the question of the chicken or the egg. Do you really need cash in hand to start your cannabis company?
Let's be real here. . . While we all know that nothing in this life comes for free, it doesn't stop us from wondering if there is a secret workaround we're overlooking. If the one thing holding you back from starting a business in the cannabis industry has been money, you're going to want to keep those headphones on.
So you've got a million-dollar idea and empty pockets. I definitely know the feeling! When I started Sativa Science Club I was fresh out of business school. So not only did I not have any money, but I was stuck with all of these student loans so I was $30K in the hole already! Congratulations to me! I knew that starting a company was….a little far fetched. But I'm stubborn as hell, and I wasn't about to give up.
So I set out to start a business with no money, and I'm not going to lie to you guys, it was HARD. At times, it was downright excruciating. And I was lucky enough to have a life partner who helped with rent and bills and things (which I know some of you don't have the luxury of ~ or interest in ~ having). Even with that privilege, I still worked my buns off to get where I was going. It took a lot of careful planning, a lot of sacrifice, and I had to learn a lot of hard lessons. But, after two years of non-stop work, I had a six-figure company.
Now I'm not saying this can happen for everyone. It takes a certain kind of mindset and a certain kind of person. But if the question is, "is it possible to start a cannabis business with little to no money" the answer is yes. Starting a cannabis business from nothing CAN BE DONE. And I know because I've done it. But there are about a million and one things you're going to need to make peace with before you get going.
So, in this episode, I thought I would walk you through my path and give you a few things to think about before you get started. And, before we begin here, I'm not saying that this will work for everybody. I don't want you out there thinking you can start a cannabis dispensary out of pocket. That's not going to happen, no matter how bad you want it. But if you want to get a foot in the door, and you're prepared to pick the low hanging fruit first, here are a few juicy morsels that are worth knowing.
So, without further ado, here are five strategies to consider for the less than loaded entrepreneur.
First things first, start with what you know. The cold hard truth here is that (unless you have an AMAZING drop shipping connection who can hook it up with free products for your storefront) if you're broke, you're not going to be able to start with a physical product. You may also need to work full time to pay the bills while you grow into your side hustle. So you have to be willing to make the first of many sacrifices. You may want to start a brick and mortar. But, if you have no money, no investors, and no connections to get the ball rolling, you're going to have to get your ducks in a row.
There are a couple of routes you can take here: You can A) opt to start a more accessible and unrelated business first and use that money to bankroll or you can B) start a related business that is in the same vein as your big picture goal. The second one is usually the smartest way to go. So, if the dream you have is currently unattainable, set it aside for a second and consider your:
Many aspiring entrepreneurs have a few things in common. They have some kind of passion for a specific subject. They have wifi, and they have a laptop. So an online business offering some sort of ancillary service is often the smartest and most realistic place to get started.
And honestly, in a brand new industry like cannabis, the possibilities are endless! So many people go straight to the big shiny business ideas. When they think "I'm going to start a cannabis business," they automatically envision cultivation, extraction, or retail.
But all of those businesses need so many helping hands to keep things up and running. From blog writers and social media managers to Virtual assistants, real estate agents, CPAs, and headhunters. Your favorite cannabis businesses hire ancillary service providers every single day. Because many traditional service workers won't work with cannabis companies. There is a HUGE need for cannabis-friendly providers. And the best part about this kind of work is that you can do it from the comfort of your home online.
Now, I have a whole episode on the actual cost of running an online business coming up next week, so I'm not going to go too far into those details. But, suffice it to say that it is the cheapest way I've found to start a company (with a few exceptions), so that is what we're going to be focusing on.
And the big picture idea I want you to take away from this episode is that starting an online business may not be your favorite plan of action, and it doesn't have to be your be-all-end-all. But it is an excellent stepping stone.
Here are just a few benefits to this strategy that are useful to note:
Even if you don't consider yourself to be a tech-savvy person, when you start an online business, you pick up loads of helpful skills along the way that you will need wherever you go. For example, you're going to learn all about organizational software, online marketing strategy, and SEO.
These are skills that will be useful to ANY entrepreneur. But you'll also start to develop a portfolio. For example, let's say your long term dream is to start a cannabis topicals company, and you want to sell a line of infused massage oils. The cold hard truth is that (as simple as it is to make the product itself) something like that is crazy expensive to get going. I
t's going to require licenses, inventory, ingredients, a kitchen, storage, the list goes on and on. If you don't have any money now, maybe you make that your 5-year goal. But, if this is your dream it sounds like you know your stuff. So let's go over that list again:
For your skills, you already know you can make an awesome topical product. For your experience, maybe you've made this product for friends and family before with amazing results. When it comes to your knowledge, you know how to do this, step by step, and you have an idea of why it works the way it does. And for your resources, we know you have that laptop.
So you can go several routes here. If you have a camera and a microphone handy, you could consider making and selling an online course. You wouldn't give away your secret sauce or show people how to make your product, of course. But you can show them how to make something related like a little self-care basket with a salve, a lotion, and some bath salts.
If you don't have a camera and a microphone, you could make an E-book and sell that.
Or, If you have a way with words, you can always set up an account on Fiverr, Upwork, or any number of platforms and list yourself as an expert in the health, wellness, and beauty blogger specializing in infused products.
It's not quite your dream goal, but it's dream goal adjacent. That way, as you build your social media accounts, newsletter subscribers, website, and online presence, in general, you're already making a name for yourself in that world and establishing yourself as a niche authority. This is going to make you look far more appealing to investors or partners in the long run.
Before we move on to number two, here are a few of my favorite ancillary cannabis services to consider where the start-up cost is free or close to it:
You may have noticed a theme with the list of ideas I offered a second ago, and that is that they all require you to know something that other people don't. If you plan to make any kind of online income, you're going to need to really hone your skillset to prove that you have something to offer that is truly valuable.
Luckily, in the digital era, we have a wealth of knowledge at our fingertips, and you can find courses, workshops, webinars, blogs, podcasts, or instructional videos on just about any topic you could dream up.
To set yourself up for success as an online entrepreneur, you're going to need to dedicate a great deal of time to sharpening your existing skills and becoming an expert.
And you might have put two and two together and realized that this is yet another reason to pick an online business path that closely aligns with what your big picture goals. Again, this doesn't have to be on the nose.
Going back to our topicals company example, your five-year plan may be to launch a product line. And maybe you plan to bankroll that by becoming a freelance blog writer. Obviously, learning as much as you possibly can about blog writing is going to help you score new clients. But it's also going to help you market your own product down the road.
Or maybe you become a VA, and you work exclusively with people who sell a physical item. That organizational skill set is going to help you in a HUGE WAY when it comes time to start your own company.
So it's critical to learn as much as you can about what you're doing. Make it mandatory to read a new blog, listen to a new podcast, or watch a new video related to your online business every single day. And if you have a little bit of extra time or money you can always enroll in an online course.
I think skillshare has a free 30-day membership so you can spend a month cramming away and learning everything you can to master your craft and make yourself more marketable. I'll share a link to a few of my favorite online learning resources in the show notes.
But the big takeaway here is that you can't just expect to start an online business and watch it grow. The competition online is bottomless. So you have to stay at the top of your game (for yourself and your clients). And the only way to do that is to commit to being a lifetime learner.
Now, if you were sitting there thinking I'm going to create a course, or list myself as a blog writer or VA on Upwork and the money is just going to roll in boy have you got another thing coming. If you plan on making a red cent online, you are going to have to learn A LOT about online marketing.
And again, this is something that you would need to know anyways. When you're ready to start your dream business, you're going to need to know how to market your product or service to be more profitable.
Even if you plan to get an investor and hire someone else to do it for you, you are going to want to speak their language and know how to assess the quality of their work.
So strategy three is to master your marketing. Regardless of what it is you're offering, you're going to need to know:
At the very least, make learning about these strategies part of your regular youtube video routine. At best, commit to taking several online courses.
The coolest thing about it is that these last three strategies don't have to cost you a single dime. All you have to do is clear out some time to learn what you're doing.
You can start any of the businesses I listed at the beginning of this podcast with nothing but a free social media account and maybe a one-page website. You don't have to get fancy if you don't want to. But the more you know about your skillset and how to market it, the faster your income stream is going to grow.
So, if you don't have any money to throw down, that's ok. But you have to be prepared to invest plenty of time and brainpower.
When you do start to see some money coming in, it's important that you're thinking about where it goes.
It can be exciting, and your first inclination might be to buy yourself something pretty. While I totally encourage treating yourself every now and then, you have to remember that you are running a company.
Depending on how you've set yourself up (if you're freelancing on Fiverr or Upwork vs. if you're taking payments and 10-99ing), you will need to set aside at least 30% for taxes if you've set yourself up as an official business entity. Thems just the breaks buddy.
If you're operating above board (and I hope that you are for your sake), I encourage you to set up direct deposit into your savings and pretend like it doesn't even exist "what extra money?" It's a real bitch to scrape that together come tax season if you don't plan accordingly. Trust me.
From there, I would set aside a set dollar amount or percent to pay yourself out or use as fun money. When I was just getting started, I allowed myself to spend just $50 a month on items "just for me." That was my secret stash for fancy coffee, walking around money, or new instruments that I still haven't gotten around to playing.
The rest went right back into the company. Remember, your goal is either to grow this business into something special or use the income to bankroll your dream company. If you're working full time and this is your side gig, it may be tempting to take this income so you can quit your day job. But you need to know and understand your long term goals.
And it's up to you to decide what those are. Are you going to keep working this side hustle by yourself so you can put 100% of your earnings into your dream company?
Or maybe you want to buy new equipment or hire a VA of your own to take the edge off so you can scale. This might allow you to make even more that you can use to bankroll the project you really want to be doing. These are tough decisions that you're going to need to think about before you get going.
Personally, If you get to the point where you're making $2K a month or more, I recommend at least getting a QuickBooks account and hiring one of their bookkeepers. I think they charge $200 a month and they handle everything for you. I even can't tell you how many times this has helped to keep me on track and saved me from doing really dumb things with my money.
Lastly, it's critical to keep in mind that the cannabis industry is always changing. If you own a cannabis company (online or offline) you are going to need to roll with the punches and be resilient.
A law can change at any moment that affects the service you're offering. Or the clients you're targeting. You need to be ready, able, and willing to adapt when the wind changes.
This is just a good rule of thumb for any business owner. If you are brand new to business (or brand new to this particular kind of business), you're inevitably going to go through some growing pains. You may find that the product or service you wanted to offer isn't really needed. Or that the wants and needs of your target audience are changing.
When I first started Sativa Science Club, I thought I had a budtender training program. It took a whole year or market research to discover that (not only was I not excited about this idea), but it also wasn't where I was going to be making money. So then I shifted to my cannabis science course (that first one was called the Core Science Training *how boring!*)
And that is where I started to see some real income. But I still wasn't thrilled with the day to day work I was doing. It wasn't until I settled on working with entrepreneurs through my program Elevated Advocacy that I started to feel happy. Coincidently, that's also when my profits began growing.
And this year, I'm starting something entirely new! Elevated Entrepreneur it blends my two loves (plant science and business), and I have never been more excited to wake up and get to work in the morning.
The point I'm trying to make here is that, even though I was gradually making more money all the way along that journey, It took me YEARS to find the right fit and really tune in to who my audience was and what they were needing. If I hadn't been willing to think in new ways and try new things, I wouldn't be sitting here right now recording.
So don't be so rigid in your thinking that you miss out on life's big opportunities. Allow yourself to learn, grow, and roll with the punches.
So there you have it, It may not be your dream company, but starting a canna-business for free is possible. What you lack in money, you're going to have to make up for in time, grit, and an eagerness to learn and grow.
Starting an online business is an easy and economic way to get up and running. All you need is some kind of skill that you can leverage for income. But you're going to need to stay at the top of your game with ongoing education, you'll have to learn the ins and outs of online marketing, you need to be very smart with your money, and you'll need to keep an open mind and be flexible because (as a little froggy told me) it ain't easy being green everybody.
Like I said at the very beginning. It takes a certain kind of mindset and a special kind of person to start and build a business from nothing. And you WILL have to make sacrifices. But, if you're willing to give it a go, it can set you up for success in the future, and it might be the fastest way to earn the income you need to chase your longer-term goals.
Finally, If you are considering a business in the cannabis industry (long term or temporary), be sure to visit today's show notes where you can download my free guide, 12 Steps To Planning Your Dream Business In The Cannabis Industry. I'll walk you through my full-proof formula for planning and launching a cannabis company complete with a checklist for each step in your business building journey. So hop on over to get your copy there are even a few bonus goodies hidden in there you are definitely going to want to check out. And as always, until next time, onwards and upwards to elevated advocacy.
RESOURCES MENTIONED IN THIS EPISODE:
All-In-One Tool For Online Courses Creators: https://app.kajabi.com/r/9932L4Rb/t/pepcmfdo
Best Online Head Shop: http://www.420science.com?aff=22
Best Cannabis Journal: https://shopgoldleaf.com/?aff=sativascienceclub
Best Electric Dab Rig: https://bit.ly/2MfsO6X
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