CBD is one of the most exciting trends going on right now, so if you’re looking to get funding for your CBD company right now, it’s a great idea. Some businesses are specializing in CBD for pain relief, while others, like Verma Farms, work to formulate CBD oils that help people focus. Regardless of your business angle, you’ll definitely get the funding you need if you play your cards right. However, you’re still going to have to work hard, because there’s going to be lots of competition, and some investors might consider this a passing trend that isn’t worth putting money into. But that said, there are some great strategies you can use to get the funding you need.
To learn more about how to successfully raise funding for your CBD company, read on.
Create a business plan
Okay. Let’s say you’re selling some of the best CBD oil on the market, and you know lots of people will buy it. If you want investors to take you seriously, you need to demonstrate how you know that–and how you plan to make more money once you’ve started selling products. Once you have a general idea of your vision and know who you’ll be working with, sit down and create a business plan. That’s how you’ll demonstrate that you haven’t just dreamed up a business; you know what to do in a year from now, two years from now, etc., and what to do if you stumble across huge problems.
According to RocketSpace, your business plan should include an executive summary (an overview of your goals and objectives), a company summary (“when, why, and how the startup was built”), a market analysis (information about the consumers and the market), a team overview, and revenue projections (from sales forecasts to liabilities). Once you’ve outlined all this, any potential investor will know that you mean business (pun intended). It’ll take some work together, but it’ll be worth it, considering that Brightfield Group predicted that the market size of cannabis would be $22 billion by 2022.
Decide what kind of funding you want
Knowing what kind of funding you want will probably be one of the most difficult decisions you make as a CBD company. Because once you commit to that, you’ll be spending a lot of time making those connections. Generally, the kinds of funding include friends and family, angel investors, banks loans, and crowdfunding campaigns. Depending on which one you choose, access to lots of money is generally inverse with how much control you get to keep.
Friends and family are great, but unless you’re a millionaire, you might not make that much. Coupling this with a crowdfunding campaign, however, can be useful. If you’re crowdfunding, what matters most is gathering that crowd, so you’ll need to create some great videos about the products you envision (and how great the CBD benefits are), post content all over social media, and make your website user-friendly (with lots of blog posts). To learn more about crowdfunding strategies, check out these tips from Small Biz Trends.
Another option is applying for a loan from a bank. If you’ve got a good line of credit, and a large amount of money to start with–from a prior company, for example, then this is an option. Otherwise, if you’re a new business and you don’t have much evidence that you’re likely to succeed, bank loans aren’t great. After all, 82 percent of businesses fail thanks to cash flow problems, which means that lending entities are going to be more cautious, especially after the 2008 financial crash.
Finally, decide if VC or angel investors are right for you. You’ll have less control over your company, but you can get lots of money faster. If you find someone who really agrees with your vision, go for it.
Spread the word
Once you’ve started getting some investors interested, and created a business plan and set up your website, spread the word about your company. Get active on social media–after all, more than two-thirds of Americans use Facebook–and make connections at industry events. Build up the hype so much that you can work with influencers, which will immediately give your company more cred and get consumers interested in your products. It only takes one major influencer saying your blend of CBD for pain relief worked wonders for them to make your business super successful. Blog as much as you can, too, and send out email newsletters.
These are some of the best ways to raise funding for your new CBD company. Once you’ve taken these steps, you can get the funding you need, and be on your way to running a successful business. What other strategies do you think would be effective?