How Cannabis Startups Can Stabilize Growth
Updated: Dec 31, 2020
It’s an open secret: Most startups run on chaos. In fact, many dismiss building a solid infrastructure and plan for growth, preferring to ride the waves and roll with the punches as they come. Under normal circumstances, this may be a viable, if not optimal, game plan. However, an unprecedented level of chaos due to the COVID-19 crisis has thrown the playbook out the window.
This article first appeared in MG MAGAZINE on July 21, 2020
It would be unrealistic to suggest there is potential for significant growth during this pandemic for every cannabis startup. Rather, with a focus on survival and endurance, now is the time to strengthen and reinforce the foundation to help stabilize your business in the present and prepare for high growth in the post-pandemic world.
Start by reviewing the areas of your business cycle and the growth blockages that were put to the side during normal operations. With business-as-usual on hold, there is no better time to tackle these outstanding issues and ask yourself the tough questions: What activities in each area can be reduced, removed, or improved to survive and sustain growth? Consider the following tactics for various sectors of your business as a jumping-off point to help build a strong foundation for growth.
Review the digital marketing tools at your disposal and your collateral in the pipeline for creation. Assess what is necessary to build now and what is the most affordable distribution and return on each piece of marketing collateral or activity. With this in mind, pause nonessential marketing activities and focus solely on actions that drive marketing qualified leads (MQLs) and, most importantly, sales-qualified leads (SQLs).
For example, if your marketing strategy includes producing educational videos, consider putting this more resource-intensive initiative on hold in favor of a robust email marketing campaign. Although videos are fun, bring value, and are educational, they do not provide the instant conversions email campaigns can deliver. Equally important, the cost to create an email campaign is nothing compared to the time, resources, and capital required to publish a polished video that is valuable to your audience.
Review current and prospective deals, sales cycles, approach, workflows, and collateral within your department, as well as sales activities that are interdependent with other departments. It’s also important to review in-person sales activities that need to be transitioned to an online approach. How do you keep a genuine relationship with clients through online tools?
For example, if you typically provide in-person pitches or demos, use this time to refine your new virtual approach. Create a process to help prospective clients or customers know what to expect and set up a clear system to send them any necessary samples or physical materials ahead of the meeting.
In addition, be mindful of your clients’ and customers’ changing circumstances. To strengthen and prolong relationships, consider discounts, fee removals, and unique payment plans for loyal and returning clients. To support new business efforts, consider special rates and targeting strategic partnerships to create referral-based relationships.
Review all interdependent workflows between all departments. Review manual processes and determine how best to improve the flow of client deals between departments. What activities can you change and keep in motion to prevent stalling growth?
For example, if your team relies on individual spreadsheets to track client orders, now is a good time to transition these operational activities into a more seamless, efficient, automated workflow between departments. With these simple improvements, your team can focus more brain power on adapting operations to the current situation.
Review current products, services, and innovation projects. Now is a crucial time to assess the viability of another product launch, as opposed to focusing efforts on proven products and services and scaling that area. What have you developed that’s great and can scale, and what are you developing that can be put on hold in light of the current circumstances?
Use this time to reconcile your books and prepare for what very well could be a long and painful summer. Review your company’s overall revenue and expenses and make concrete preparations for potential necessary cuts to survive. What tools can you utilize to maintain an upward growth trend? Conversely, which tools are draining funds and adding to your month-over-month burn rate and can be removed? The most difficult question, but one that must be addressed, is what roles should be furloughed at this time and which should be eliminated?
"NOW IS THE TIME TO STRENGTHEN AND REINFORCE THE FOUNDATION TO HELP STABILIZE YOUR BUSINESS IN THE PRESENT AND PREPARE FOR HIGH GROWTH IN THE POST-PANDEMIC WORLD."
Answering these key questions across departments is an essential first step to approaching the pandemic from a strategic and growth-conscious position. Once these answers have been gathered, the work begins to create an action plan and execute it as a leadership team. Approach your teammates and your clients with sensitivity and do everything you can to work through the current climate together.
The recent lockdown brought innumerable challenges to businesses of all sizes. For startups, now is a key time to stabilize your infrastructure in order to maintain consistent, healthy growth. While high growth is always the goal, survival must be the top priority. Only in this way can we prepare for success when the world returns to something resembling what we previously called normal.