5 Steps to Starting A CBD Company in 2020

When I first created Krown Naturals, I had no idea what I was getting myself into. I thought it would be just like all the other brands I created for my Amazon business, boyy was I wrong. Creating Krown took me over two and a half years due to all the delays, setbacks, and failures I encountered. However, that didn’t stop me from pushing through. Krown Naturals is so much bigger than any other brand I created in the past because of how CBD has impacted my life in such an immense way. I believe in this product whole-heartedly and want to use this platform to share everything with you in hopes that you will also share it with your loved ones.

You might ask why am I sharing this information? What about competition? Well considering the CBD market is expected to reach $3.52 Billion during 2020-2024 there’s more than enough to share! If you captured just 1% of that market in yearly revenue, that’s over $35 Million. Yes. MILLION. And if you were okay with settling with .05%, that’s still $1.75 Million. It all comes down to finding your niche audience, but let me not skip ahead of myself…

I am going to share 5 steps you should do if you are interested in starting your own CBD company. By the way, this works for other products, not just CBD!

STEP #1: Decide what you want to sell (Do Research!)

Im sure you probably know by now; CBD can pretty much go in ANYTHING. So naturally when I decided to start a CBD company, I wanted to sell everything that I could possibly put CBD in. BIG MISTAKE. Obviously as a startup up, you should be very mindful of your spending unless you have a ton of capital to just throw away. I recommend narrowing it down to 2 or 3 products to start off with.

How do you decide where to start?

Well that’s up to you. I typically ask my clients or friends that come to me wanted to start selling products, “What are you most passionate about?” Typical answers include: Basketball, makeup, skin care, weed, etc. All these are great niches for starting a cannabis company. For the sake of this article let’s say your biggest passion was skin care.

I chose my niche, now what?

Go deeper… do as much research as you can to find out about your niche. Ask yourself the following questions and more:

· Who is your target demographic?

· What kind of skin care products do they use most?

· Can I add CBD to this product?

· How often does my demographic consume cbd?

· What kind of cbd do they consume the most?

· What colors do they like?

· How would you market your products?

· Where can you find your target demographic?

· How much are they willing to spend?

· Am I okay with creating content for this demographic?

· Etc.

After you feel like you’ve answered as many questions as you can, you should be able to determine the type of CBD products you will include in your initial launch. For the sake of this article, lets say you chose a face wash and a face moisturizer.

STEP#2: Create your Company

This is where you lock yourself in a room and brainstorm a ton of ideas for the name of your brand or if you’re like me, come up with the name off the top of your head.

Once you’ve decided what you want to call your CBD brand, do a quick internet search to make sure you’re not infringing on any trademarks and to see if your domain is available.

Usually I wouldn’t jump so quickly into incorporating my brands however dealing with CBD, I highly recommend doing so as soon as you’ve solidified your brand name being that you’ll need an EIN# or proof of corporation when purchasing wholesale from suppliers. My go-to place is Legalzoom. If you are the only owner of the business, a simple LLC with just the articles of corporation should suffice (should cost no more than $130 depending on the state). However, if you have partners, I recommend paying a little extra for the Operational Agreement, trust me you’ll need this!

Don’t dwell too much on incorporating, when I originally planned to write this post, I had it listed as step 3 instead of step 2. It all depends on how serious you are on starting a business, since this step could take longer than all the others. You could get it out the way while you design your company. When I originally created Krown, I skipped this step and came back to it once I got all my visuals.

STEP #3: Design your Company

Now for the fun part, especially if you’re a graphic designer or creative person in general. For those of us who aren’t, there are so many solutions out there!

This step typically includes creating your:

· Logo

· Label Design

· Website

· Social Media Assets

· Etc.

My first stop was Fiverr. Freelancing for the lowww. This platform is full of hungry freelancers willing to design amazing logos and product labels for you. Find the one that speaks to you the most! Other site you can use are: Upwork, 99designs, or Canva.

You want to make sure you choose the right person for the job, even if it’s yourself because you want to be able to come back to the artwork in the future when suppliers start to make specific label requests (this happens 99% of the time). You want a freelancer the communicates well, and will always be available even months after the job is completed.

Building websites can be extremely time consuming, but this too you can also outsource! Be sure to communicate your exact vision to whoever you work with to avoid any type of delays. Choose a platform that you could easily make edits to even after the job is completed. I recommend Wordpress or Shopify.

You’re probably starting to see a common theme here… Outsource as much as you can! It saves you time, and it’s usually very inexpensive. It will also get you in the habit of delegating tasks, for when your company starts making some serious revenue. Unless you’re a graphic designer or an artist, I’d save myself the headache…

STEP #4: Find all your Suppliers

Now that you have you virtually finished product, its time to start shopping around for suppliers. Rarely will you find just one supplier that will provide you with packaging AND the CBD product, but if you do hold on to them dearly!

You’ll need to find a supplier for:

· Packaging

· Printing

· Product

You will have to determine your desired COGs (Cost of Goods) before diving into this part. For example, lets say you want to sell your finished product for $40 because that’s the most your demographic is willing to pay. You’ll have to make sure your suppliers aren’t too expensive to the point where you wont make any profit. You’ll also have to take into account MOQ’s (Minimum Order Quantity) and Source Time. An ideal stating point would be 30% profit after all COGs are accounted for. That leaves you enough cushion room for promotions and marketing.

Where should you get your CBD from?

When looking for a CBD supplier, you want to be super diligent. Make sure to have a list of questions for each supplier to ask them either on the phone or via email. Most wholesalers will provide you with an account representative to take care of you from the initial call to your final purchase. Ask for samples, some provide this completely free of charge while others only charge a small fee. SAMPLES ARE IMPORTANT!!!! Never order in bulk unless you know exactly what you’re getting, this goes for any product.

Once you’ve chosen which supplier, you’d like to purchase your CBD from, check to see if they provide their own packaging & printing options. If they do, and it fits within your budget, stick with them! The more you can get out of one supplier the better, it reduces shipping costs and delays.

Where should you look for packaging and printing suppliers?

Starting local would save you a lot of time, and surprisingly a lot of money! Do a quick google search for “(insert niche) cbd packaging near me”. Most packaging companies also offer printing services, however if you’re not able to find one that offers both, Vistaprint or Uprinting are very affordable.

If you can’t find anything local, don’t hesitate to expand your radius. When I first started looking two years ago, I ended up in China, and given everything that has transpired, I recommend just staying local.

STEP #5: Bring it all together!

You now have your finished product, your company, and your website! Now its time to set up all the minor backend stuff.

· Is your shipping central set up?

· Is your payment gateway setup?

· Do you have shipping supplies?

· Did you setup MailChimp?

· Do you have photos for promotions and social media?

If you answered yes to all of these questions, then you’re ready for your first sale!

Obviously, there’s sooo much more that I wish I could include in this article, but it’d turn into 10-page report realll fast! For a more detailed step-by-step, be sure to check out my podcast or Youtube channel!