Good decisions are crucial for cannabis business owners. The regulatory environment is complex and constantly changing. With the potential to make or break your company, it’s vital to know what you’re getting into when deciding.
In this blog post, we will cover four key tips for improving decision-making skills for your cannabis company.
1. Develop a Realistic Cannabis Business Strategy
Having a sound cannabis business strategy in place is vital to success for any cannabis company. It provides an opportunity for better decision-making and smarter investments of time and resources.
CEOs and cannabusiness operators can develop their plans by answering the following questions;
- What are my goals?
- What do I want my business to look like?
- What are my company’s strengths and weaknesses?
This information should also allow you to assess where your business is now, what needs work, how much money should be allocated for specific projects, and more importantly, where does your company want to go in the future?
The business strategy for a cannabis company can be the difference between sustainable success and failure. A good business plan will address every requirement – including safety regulations and marketing restrictions – to ensure the best possible chance of meeting them all to succeed.
2. Track & Analyze Key Business Metrics
Different industries have different KPIs, but some facts always remain constant. The importance of tracking key performance metrics is a universal truth. Tracking all the necessary numbers will help make decisions about where and how your company should grow or what strategy it needs to employ for you to stay competitive within a certain industry sector – and predict future market trends with more accuracy than ever before!
Some of the KPIs you can track and analyze for a cannabis cultivation operation may include:
- Yield per square foot,
- Kilograms per square foot,
- Total weight in kilograms of harvested cannabis flower from a harvest cycle,
- Cost per gram or pound.
Cost-per-gram is the most important KPIs to track because it gives us an idea of your production costs. But it can also offer insight into how you need to adjust prices for profit margins.
3. Keep Your Account Books Organized
Keeping the book of accounts prepared and up to date is very important for any cannabis business. This ensures you can find and offer essential financial data quickly. For this, it would be best to use an accounting software package paired with spreadsheets and any seed-to-sale tracking software the industry demands. For example, Metrc is used in Michigan.
As regulatory authorities increase their scrutiny of cannabis businesses, it becomes even more important to keep up with bookkeeping. Organizing your books means more than just having a file on your computer for each cannabis product and its costs; it also keeps you up to date with state laws or regulations.
To ensure everything is on track, we always recommend hiring a CPA specializing in the cannabis industry.
4. Get Acquainted with Right People
Investing in the right people can make or break your cannabis business.
A qualified CPA, an experienced lawyer, and other professionals will always be there to guide you through various uncertainties in this industry. These experts have seen it all before, so they know best how to successfully operate a marijuana-based company without getting fined by authorities for any wrongdoings – which can be a full-time job in and of itself!
Experts in the cannabis sector will also guide your company to access incentives offered by authorities, like tax breaks via 280e, for example.
Making the right decisions is essential for running a cannabis business. Unfortunately, the industry has strict rules and regulations that make it quite difficult for entrepreneurs. Still, if you can follow these four tips to make good decisions for your operation, it’s sure to thrive in this complex space.
Please share this post with other businesses in need of guidance, and let us know what successful strategies you’ve used for making the best decisions for your cannabis enterprise in the comments below!