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5 Ways for cannabis retailers to cut overhead costs

Published Feb 10, 2022 10:00 a.m. ET
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Overhead costs for small businesses do tend to err on the high side, which can make it really hard to stay in the game. This is especially true in the case of cannabis retailers who pay more for everything from rent to banking and licenses. It’s a challenge to get into the game and even more difficult to survive and thrive here, and that’s why tightly managing financing is absolutely necessary.

For those that are barely getting by, the ability to reduce overhead as much as possible can quite literally be lifesaving, and though it might take some significant adjustments in the way you do business to get there, the time, energy and in some cases, small financial investment is sure to pay off in the long run. Here we’re going to help you get started with 5 suggestions that could help to save dispensary owners money.

1. Eliminate paid advertising

Advertising is often believed to be an important part of overhead costs for any business, but the reality is that if you’re small, local, and open to building community relationships, there really isn’t much need to waste a fortune on getting the word out. It might not be the traditional way of doing things. Still, self-promotion is so much cheaper, and with it, every penny saved can be a profit instead of an expense.

2. Boast a strong online presence

Number 2 on this list is the perfect follow-up for number 1, as a powerful online presence is free self-advertising, but it’s also an entirely separate point because doing so can save cannabis retailers money in many different ways. Save employees precious time by answering questions and posting menus, and in some cases, doing so can make it so that retailers don’t even have to open to the public, which cuts down on the number of workers needed for each location. Educational resources may also be shared this way, and that should act as advertising as well as a solution for shoppers who have easy to solve problems.

3. Be energy efficient

Taboo

You might think that every bulb, fixture, and camera has been upgraded as much as possible to be energy efficient, which leaves little else to do, but that’s only partially true as it doesn’t take into consideration the entire picture. Are lights left on at night when they shouldn’t be? Is having multiple cameras running and sucking power absolutely necessary during the day when the store is full of watchful employees? The answer to these questions should be no, and if it isn’t then, it’s time to change to a more energy-efficient way of thinking, as it will save a lot of money to do so over the years.

4. Express locations

Overhead costs are highest for large cannabis retailers that must maintain big floor space and inventory lists, but these luxuries aren’t at all necessary. In fact, for many consumers, it would be preferred to head-on into an express location that offers a fast, simple, 1-3 minute shopping experience, and it saves most business owners money, so why not get on board with this increasingly trending idea?

5. Invest in automated security

Security guards make business owners feel better, as they know a human is watching their most precious investment, but paying real people to stay on-site doesn’t necessarily act as a deterrent for theft because there is only so much one person can do to stop a determined thief. So instead of dishing out a salary and benefits while getting very little in return, it might be time to adopt an automated system that will alert yourself or the authorities if anything suspicious goes down at your place of business when you’re gone. It’s a small investment that will pay for itself in as little as a few months.

Small cannabis business ideas for entrepreneurs
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