While you may have heard of CBD and the health benefits that come with it, a lot of people still have a bit of catching up to do, and this includes researchers as well. While there is a lot of information out there that indicates CBD is good for us for many different reasons, we could always do more studies and research.
Needless to say, the CBD industry is quickly becoming one of the biggest in the health sector, and it’s only going to get bigger. If you want a piece of the pie, and you also feel passionate about selling a product that’s actually going to help people, you may want to start a CBD business. Let’s walk you through what it takes to start a CBD business and keep it going.
How to Start a CBD Oil Business (in 2020)
As you know, the CBD industry is huge – so let’s dive into talking about how to start up your very own CBD business.
1. Naming Your Company
Of course, one of the first things you need to do when starting any business is thinking of a good name for it. As a general rule, we don’t recommend that you include hemp, cannabis, or CBD in your name anywhere, as it can cause unnecessary problems with your bank that you don’t need.
Another thing to consider is where you want to take your business and what you want it to look like in the future. If you plan on expanding it and including more products than just CBD options, then you may want to choose a brand name that can be inclusive and not limiting.
Another thing to think about when choosing the name of your brand is whether it’s easy to spell and say. The easier these two things are, the better people are going to remember it. We recommend brainstorming a list of names and slowly culling the list until you get down to the one you want. Bounce it off friends and family to get second opinions, so that you can make sure you’re choosing the right one.
Once you’ve got your name, you need to look it up online and see if it already exists as a website. If the URL is taken, but you can’t find a website anywhere, you may want to consider talking to the owner of the URL and see if they would be willing to sell it.
2. Setting Up Your Entity
The next thing you’ll want to do once you’ve chosen the name of your company is to set it up as an entity. We recommend setting it up as a Limited Liability Company, or LLC. This is much easier than you may think – in fact, it’s only going to take a few minutes. This is also going to be a cheaper option than consulting a lawyer.
We recommend making sure that your entity has the same name as your company. This is going to end up saving you a lot of paperwork down the line.
3. Design the Logo
Now, for the fun part – deciding what you want your logo to look like. Now that you’ve officially started the paperwork for your business, you can start playing around with different design ideas to find the perfect logo to suit what your business is all about. You can even recruit the help of a freelance designer, too, if you’re not very confident doing it on your own.
4. Open a New Bank Account
Now that you’ve designed your logo, you will need to open a brand new bank account that is exclusively for everything related to your business. You just need to go to the bank and explain that you’re starting a business and you’d like to open up a new account. We don’t recommend that you tell them that it’s a CBD company, otherwise this could end up making it more complicated than it needs to be.
5. Apply for a Merchant Account
Once you’ve got your Employee Identification Number – which you’ll get when you set up your company as an LLC – and your bank account, you’ll want to apply for a merchant account. You’ll need to get a CBD merchant processor to make things a lot easier.
6. Select Your Partner
You can manufacture your own CBD products, but this is going to take a lot of work, and it’s also going to be a bit of a headache with all the regulations, too. It’s much better to purchase your product from a manufacturing partner that does this side of things, so you just have to worry about the selling side.
It’s essential to make sure that you choose a partner who is manufacturing a high-quality product; otherwise, you’re going to get a lot of returns that could bankrupt your business before you’ve even gotten it off the ground. You also need to make sure that you get the balance of quality and affordability right so that those first initial customers end up being repeat customers.
7. Buy Hosting & Create Your Website
Once you’ve teamed up with a high-quality business manufacturing partner, you’ll need to set up your website. You’ll need to find a CBD friendly webhost (Bluehost allows CBD content and comes highly recommended). Once you’ve got your host; we recommend using a website template. This means that all you need to do is drag and drop any original media and content that is already associated with your brand – you don’t need to build your website from scratch.
Make sure to personalize your template, so that it is easily recognizable when people visit your website. The more original and unique you are, the better Google will rank you.
8. Get on Social Media
Another important aspect of being online with your business that’s just as important as setting up your website is making sure that you have your brand on social media platforms, too. Make sure that all of your different social media handles are the same across the board so that people can easily find you and connect the dots without too much trouble. Obviously, the best option is using your brand’s name, but if this already exists, try adding another word to it, so it’s as close to the original as it can be.
This should definitely be a priority and one of the first things you do when setting up your CBD business. The more platforms you have your business established on, the more exposure you’ll get, which translates directly into traffic.
9. Get a Fulfilment Company
If you want to market someone else’s products, you can – there’s nothing wrong with doing this. However, you may want to go to your manufacturing partner and see if you can’t create your own brand with them. If this is the case, then you will need a fulfillment company that can easily ship your products. You have two choices in this – you can either ship the products from your home, or you can find a fulfillment company to do it for you.
10. Create Your Marketing Strategy
This is potentially the hardest step out of all of them. Setting up your website is easy, and coming up with your brand name is also relatively straightforward. Being business-minded, though, and figuring out the secret to marketing your products successfully is much more complicated.
Of course, there are thousands of different routes you could take when it comes to marketing your brand. We suggest starting by writing down a list of all the different ways you would like to market your company. Of course, there’s no set, winning formula, so we recommend that you get creative and try to think outside the box.
One thing to remember when thinking about the best marketing strategy for your brand is that you can be really good at anything you put your mind to, but you can’t put your mind to it all. Narrow that list down to one or two strategies, and put all of your energy and focus into these.
First, let’s talk about what CBD oil actually is. CBD is a compound that’s found in both the hemp plant and the cannabis plant. It’s actually one of the hundreds of different cannabinoids, but the only other one that you may have heard of is THC, the compound that is psychoactive. CBD, on the other hand, doesn’t get you high, and a lot of CBD products these days don’t contain any THC at all, as a lot of patients prefer to take their daily dose without the buzz.
CBD oil can be derived either from industrial hemp, or the cannabis plant. Because there are federal regulations in the states about how much THC you can include in CBD products, most manufacturers out there derive their CBD products from industrial hemp. You’ll need to know about these rules and regulations if you plan on starting up a CBD business. There are many different CBD products out there on the market now, from edibles and tinctures to topicals and e-liquids for vaping.
As we mentioned, you can get CBD in both the hemp plant and the cannabis plant. Again, though, the biggest difference between CBD that’s derived from the cannabis plant, and CBD that has been derived from the hemp plant is the levels of THC. On a federal level and in most states still, CBD made from the cannabis plant is illegal.
When someone talks about CBD isolate, they are talking about a CBD product that only contains the CBD compound – nothing else. With a full spectrum CBD product, however, you’re looking at CBD that has been combined with other nutritional compounds derived from the same plant.
With full-spectrum CBD products, you can get what is called the ‘entourage effect,’ where the CBD is more effective because it’s combined with other compounds. Either way, you’re going to get the benefits of CBD, so it all comes down to personal preference at the end of the day.
The idea of starting a CBD business is a good one – but the reality can be pretty different. It’s not easy to get any business off the ground, especially one that’s in a thriving industry where you’ve got a lot of competition.
Needless to say, you have your work cut out for you, but there’s no reason why you can’t be successful. Start with our helpful tips and tricks on how to start your very own CBD business and see where you can really take it if you put your mind to it.