5 Ways to raise capital to start a cannabis business
Looking to start a cannabis business without a large amount of cash on hand to get the ball moving? It’s a common plight and an easy problem to fix as long as you know where to turn. With that in mind, we’d like to introduce you to five great ways to get money to start a business, and remember, you can always go with more than one!
1. Get help from friends or family
We don’t all have a supportive family to turn to in times of need or, in this case, business interest, but if you’re one of the many that do, then this is a great first place to start. The same is true for friends, who might be happier than you realize to lend a helping hand. Loans garnered this way tend to be easier to get, as you don’t have to apply or qualify, and it’s not uncommon to negotiate a much lower (if any) interest rate making it easier to pay back once things get going, which is always a good thing.
2. Look for grants for cannabis businesses
Whether you want to start a cannabis business or any other type of establishment, grants may offer a massive step up by providing you with a certain amount of money to put towards getting started that you’ll never have to pay back, or if you do, it’ll only be a small portion. These are typically available for sectors that need to be stimulated, with a huge chunk of change going towards tech-specific needs, updates and startups. There might not always be a grant that you can qualify for, but it’s still worth looking, just in case, because it’s pretty much free money for filling a gap in the market.
3. Start a smaller, more affordable business first
It’s not uncommon to have big dreams especially when you’re starting out, and to sit down to really add up how much those visions will cost to pull off is a good strategy as it gives you higher goals to aim for. However, if you don’t have the capital to get going, then it doesn’t hurt to settle on a smaller business idea that can bring in cash fast. Tucking those hopes away for a few months or years might be exactly what you need to do to raise enough money, and though it might be a struggle, the experience you get from the journey and payoff at the end is worth it.
4. Appeal to sponsors/investors
Many entrepreneurs will start a cannabis business with the help of investors or sponsors, who are well situated and able to cover the bills until some decent revenue comes in. The downside of this is that you’re generally selling a small fraction of your company or business space, which could end up costing you more in the long run, so it’s important to take that into consideration. It sucks to have to give away a piece of your pie, but if it gets you up and running quickly, then you might decide that the boost is worth the commitment.
5. Go Fund Me
Last but not least are fundraising campaigns that can help you to get the word out and bring in some much-needed cash via donation. Go Fund Me and Kickstarter are just two well-known platforms that make doing this easy. They’ll put your story front and center before those that have the means to contribute, and it can all be done with a few simple online forms and clicks, which is pretty convenient. Unfortunately, they also want to make money in exchange for the service, and that can cost anywhere from 5%-25% of the total, so it’s important to pay close attention to the details if you decide to go this route.
Getting any kind of business off the ground is no easy task, but with determination, a good idea, and capital, dreams can come true. So, if you’re ready, it’s time to hit the ground running and raise some money!