Problems Facing an Entrepreneur Wanting to Start a CBD Brand
Problems Facing an Entrepreneur Wanting to Start a CBD Brand
These days new CBD Brands are popping up almost every day, and most will probably never make it past the first year. The reason for this is because of the type of industry we are in, it is not the same as starting a vape product or something which can be easily sold by just visiting corner shops, health shops, pharmacies and vape shops with a sales pitch. Because CBD is like a medicinal or food product it needs marketing budgets as such and with the many restrictions it also needs a good marketing strategy. We have made a small list to show you all the other things you will also need to consider and what obstacles you will face.
Some of the main problems an entrepreneur will face are:
- Business plan
- Lack of funds
- Creating a unique product
- Product branding
- Limited number of UK suppliers/manufacturers
- Product quality
Themost important aspect of a business is the plan, most small businesses will just start working on a new amazing product idea without any sort of business plan except what they wish for in their heads. This is one of the biggest mistakes most will make, not knowing how they plan to enter the market and how they willcover all the other important aspects in a business plan. If an entrepreneur wants to start a CBD brand, they will need to learn as much as they can about the market and industry, then use that research to make a good plan before even thinking about developing the product. If you struggle to complete this first stage of planning, then it will not be worth your time or money to start a new brand. There are companies out there like London CBD group who can help with creating full business plans as well as some that provide templates that give you an idea of what information you need to include.
Lack of Funds
To start a good CBD brand, you need a minimum of £50k and that is doing it on the cheap manufacturing via a white label company, this is so you can have enough money for development, first batch of products with packaging, storage, ongoing costs for first few months andsome marketing. If you plan to do your own facility, then you would need a budget of more than a million pounds to setup an appropriate manufacturing facility. Some entrepreneurs with thelack of funds may start with a few thousand pounds, but this will make it very difficult to get any good wholesale deals or even grow at any decent rate if any at all. So, funds can be a major obstacle if you do not have enough to start with.
Creating a Unique Product
This will be one of the toughest hurdles to get over, making a unique product is almost impossible on a low budget, you need to have a team work on developing formulas, testing and a whole list of other costs associated with making something new. As this will not be the case for most entrepreneurs new to the CBD industry, you will most likely be going for standard common products such as oils, balms, edibles etc. Because you have a common product your branding and presentation will have to be the best to even stand a chance as you will just be one of many selling the same thing. To make sure your quality is amongst the best you will have to have very good manufacturing practices, having it manufactured in clean rooms and good facilities. If you plan to just make at home or in a small standard warehouse unit then unfortunately the brand will struggle to compete, as most of the major brands are made at the very least in an ISO 7 clean room.
Large number of start-ups are coming out with brands that do not fit the market or intended targeted consumer. Designing and choosing the correct CBD brand is very important and must not be overlooked or confused with weed ideas. Consumers looking to use CBD are not interested in getting high, they use CBD for its therapeutic and medicinal benefits. Logos, packages, patterns and colours associated with cannabis leaf symbols or designs do not do any favours for new brands, you will push away many reputable retailers. Branding design must be friendly and clear, provide enough information and be designed according to the type of retailer you are aiming to be stocked at. For example, in health shops you may go for the earthy style to fit in with a group of stores, for the pharmacy market you may go for the medicinal style, for the sports market, it may be flashier with patterns representing the sports industry. All these things must also be taken into consideration when making your brand, you can then decide what you want to name the brand and work with your initial plans.
Limited Number of UK Suppliers/Manufacturers
In the UK, cannabis is still against the law to grow, carry or consume, although medical cannabis is permitted in some cases, no company except GW pharmaceuticals has a licence to grow in the UK. As growing is not allowed here, you will not find many extraction facilities in the UK extracting CBD because of the high cost of shipping to bring biomass over from another country, so you will most likely have to source your isolates/distillates from USA or European countries who are growing and extracting in the same place. You can find many manufacturers now, who white label your brand for you, but not many who can provide you with all the necessary information about the CBD they use. You must look for the best manufacturer that can give you all the information of where that CBD is from and how it was processed to make sure you are using a high-quality product. This process of finding a good supplier and manufacturer can be tedious and a great obstacle for small start-ups as many manufacturers will not give you the service you want.
This is another obstacle you will face, from finding good traceable extracts to manufacturingat a high standard, many challenges will arise. Just buying isolate or distillate and mixing in a large container with your base oil will not be good enough, this would create an uneven mix leaving many bottles with less or more cannabinoids, you would have to use the correct equipment like an homogeniser or other commercial mixers to mix the liquid accurately which also takes a lot of careful calibration. Quality of your product will also depend on where you source all your ingredients from, always make sure you use reputable suppliers which have good transparency and documentation. After you have perfected the product quality without any inconsistencies, you must maintain this throughout, to make sure your brand can have a successful future.