How cannabis businesses can survive a recession
There’s no way around it, a recession is looming, and numerous cannabis businesses, in particular those that are new on the scene, are nervous about what the future has in store. Even the biggest and best cannabis brands will need to prepare and plan for what’s ahead if they want to not only survive this bumpy ride but also thrive. With that in mind, we’d like to introduce you to some tips and tricks that can help to create a recession cushion for businesses.
1. Build a memorable reputation
It’s hard to say what these next few years will bring, but most cannabis companies have a reasonable advertising budget to work within right now, and that is best spent building a reputation that makes your business stand out above the rest. Whether it’s a catchy chime, important work on social issues, or environmentally friendly producers and packaging, now is the time to decide what you want to be known for and to ensure all your clients know it by heart.
2. Maintain a user-friendly website
Technology has made finding information so much easier, but if the data is hard to find or too difficult to navigate, some customers are going to get bored and move on quickly to a space that offers a smoother, user-friendly experience. A website acts as a face for any business, and if yours isn’t up to snuff, then you’re going to lose money, and fast!
3. Harness the power of visual aids
Human beings are visual creatures, which is why it’s essential for cannabis businesses to use that by displaying information, a logo, or any other information in photos for advertising. When you think of Mcdonald's, you probably don’t envision the food. Instead, what comes to mind is the giant ‘M’ that marks every single location in a familiar way. Building that kind of brand recognition nearly always takes well-thought-out visual aids.
4. Share your history
All businesses have a creation story, and yours can help your company to stand out. It could be funny, serious, or anything in between. All you need is a story that allows customers to connect with your business on a more personal, human level. Not everyone in cannabis wants to be transparent where history is concerned, but no matter how problematic, clients will appreciate the glow of an honest company.
5. Never stop marketing
Cannabis marketers already operate on a shoestring budget, forcing them to get creative to stretch every single dollar as far as possible, but even if that cash flow runs dry, it’s important to never take a break from marketing. Any lull in sending a message could cost a business in sales, eventually resulting in even less money to work with in the future. Even with no budget, there are many affordable and even free options out there if you’re willing to put in the work.
6. Cushion your cash flow
Financial security is what worries us all in a recession, or rather a lack of it. The diminishing buying power of the average dollar is painful for cannabis consumers and businesses, and that’s why it’s important to prepare before that happens. Look at ways to expand revenue and come up with a plan that considers even the worst possibilities, so that the company will always survive, even through the toughest of times.
7. Cut back on unnecessary spending
It’s always nice to have extra luxuries that help to make running a business smoother or more enjoyable, but there’s never been a more important time to save money, so now is a good time to look over all budgets to see if there’s any room for trimming that might help to ensure you balance the books. This might mean turning off lights to save on hydro, having fewer employees on staff at a time, or investing in an automatic security system instead of paying for a security guard. Some changes take an investment, but if they pay for themselves over time, you’ll be happy to have made the leap early.
This isn’t always possible for cannabis businesses, as it isn’t uncommon to have contracts that cannot be changed for an extended period of time. Still, it’s essential to figure out where and when it’s possible to renegotiate terms, be it with suppliers, utility companies, or even your landlord. Alternatively, working to extend beneficial contracts should also be a top priority.
9. Lean on financial assistance
No business owner wants to borrow money, but when you’re looking to make upgrades to save in the long run or to expand to increase sales, it might just be worth the price tag. Doing this now while banks, investors, and other businesses are willing to lend a hand is recommended, as interest rates will only continue to rise, even if your sales are stagnant. These opportunities also aren’t always guaranteed, so businesses should take advantage of the hand-up if they can.
10. Invest in pre-existing customers
You can do everything else right, and if your cannabis company doesn’t have a loyal consumer base, then the odds will not be in your favour. Therefore it is wise to invest the most into the consumers you already know are paying attention and spending money. As more green companies crop up, they’ll always have another new option to consider, and that’s why these businesses need to work extra hard to make sure those clients keep coming back.
Don’t ever give up
Recessions aren’t easy on anyone, in particular young businesses such as those we see in cannabis, but it’s essential they don’t give up because this is merely a lull in a journey toward greatness. It won’t be tomorrow, next week, or likely even next year. Still, there are brighter days on the horizon, and only the cannabis businesses that work the hardest will live to see them.