This post originally appeared on Entrepreneur.com - #Growing Your Business
How to grow from a small, fledgling business to a profitable one.
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The cannabis business is going through growing pains in real-time. As everyone on the cannapreneur journey knows, these pains come from both self-inflicted startup situations, and from regulatory tension in an ever-evolving industry.
For the past three years, I’ve been on a quest to listen and learn from those who’ve been here before, and to connect with those who are on the same path now. We’re literally building a new business and a new industry at the same time.
From my interviews, research, and first-hand experience, I’ve learned that successfully scaling a company comes down to five elements that, when focused upon, can drive a cannabis startup to its full potential across this heavily regulated burgeoning market.
1. Improve efficiencies
Growth is defined in the dictionary as “the process of increasing in physical size” with the word process being the operative word. Scale gives you economic power to funnel back into your business if you can capitalize on the increasing size by improving processes to find efficiencies and economies of scale. This includes streamlining team communication using tools like Slack and Asana, as well as getting improved pricing from vendors to drive down the cost of goods. The more efficiencies and synergies that are implemented in the cannabis business, the more we can capture the benefits of increasing scale, allowing for greater growth.
2. Build the right team
As CEO, I’m always reflecting on whether we have the right team members for the right roles. I used to wonder why an employee who was excelling for a while suddenly seemed to be struggling in their role. But a wonderful mentor opened my eyes to the fact that it wasn’t the employee who had changed, it was the role. This is the reality of a high-growth environment: job requirements change, and sometimes fast.
Realizing this caused me to look closely at filling our company’s immediate needs, while also considering how to help someone develop into the role required of them in three months. This ensures that the team’s skills are evolving parallel to the growth of the business. It also helped me recognize that an excellent sign of a growing company is the need to uplevel, including hiring more advanced skills into key roles as the business demands it. Having the right team with the right skill set helps ensure that a growth trajectory can be maintained for the long haul.
3. Manage your time
As one’s business grows and becomes more successful, there are many opportunities that can excite us, from great partnerships and brand opportunities to enticing events and new product ideas — the list is endless. It’s easy to find yourself saying “yes” to many things.
While “shiny objects” can get us really excited, they can also take away our most limited asset—time, from the core business and from the customers we’re serving. To stay creative, we take these objects and put them in a parking lot for later use, when we have the time or business fit to execute. It takes discipline to not chase the glitter, but we have learned early on that staying laser-focused to our business – and purpose – is key, which in turn allows us to drive the execution of our business plan, and find the momentum needed.
4. Know your cash flow
The one thing that I was not prepared for as we began to find success (well, there was probably more than one) was exactly how much money it would take to grow. Without access to SBA loans or bank loans, it’s easy to run low on cash flow. Plus, growth means more packaging, employees, and cost, while larger customers meant longer terms to collect. A double negative.
By raising capital through carefully chosen investors, we were able to get back to work growing the business. My advice for everyone I talk to now is to understand your cash flow demands as your company grows, and raise money or find financing before you really need it. You don’t want your success to be slowed down by something like cash flow, since that’s the sign of a great growing business.
5. Take care of yourself
As a founder and CEO, it’s easy to work 100 percent of the time. Add on to that being a mother, wife, and friend, and it feels like there is literally not even time in the day for me to put my contacts in, let alone find the time for a workout or self-care.
What I’ve come to learn through a lot of failing is that I’m much more efficient and effective as a boss, leader, mother, and all-around being when I feel good, present, and well-rested. I’m not perfect at all this, but I have gathered ideas from other women on how to make this practice more of a reality. I focus for 10 minutes in the morning on my meditation, which keeps me disciplined on the quietness of myself. I have learned to ask others to be clear on where I can help and what they need of me, and also make it a priority to spark joy in my life every week. Self-care has paid dividends as I find joy by being present in life, be it for work or pleasure.
Scaling a startup also means that the scales could tip at any moment. But it’s possible to scale without falling over. The trick is learning to streamline both the company and life, as well as taking time to reflect on what is working, what isn’t, and what needs to happen next to derive positive change and growth.