In the ever-evolving landscape of the cannabis industry, finding the right path to growth and success can be a challenging endeavor. In this article, we engage in a thought-provoking Q&A session with Alex Wilson, a trusted advisor in cannabis advisory, tax, and accounting solutions. Through his valuable insights and experiences, he sheds light on various aspects of the cannabis business. Join us as we explore the intricate world of cannabis through the eyes of an industry advisor.
1. WHO SHOULD BE ON MY TEAM OF ADVISORS TO HELP ME RUN A SUCCESSFUL CANNABIS BUSINESS?
Building a strong team of advisors is important for running a successful operation and growing and protecting your business. The team that I would put together would include a banker, accountant, business consultant, attorney, and others specific to your needs such as a technology and security specialist, insurance broker, and marketing expert. Preferably, you would seek professionals who have experience and knowledge in the cannabis industry, as they will be better equipped to understand the unique challenges and opportunities it presents.
2. WHAT DO OWNERS NEED TO CONSIDER WHEN LOOKING AT GROWTH AND THE DRIVERS OF SUCCESS?
Owners who experience the most success embrace big-picture thinking as the driver of growth.
In this respect, there are five steps to drive growth:
1. Know the value of your business and identify the drivers that affect the value.
2. Know the KPIs (or key performance indicators) that enable you to operate your business more efficiently and effectively.
3. Have a handle on your plan and prepare yourself for setbacks.
4. Understand how your business and personal wealth support each other.
5. Have a clear vision for your business with specific, measurable objectives.
3. WHAT FACTORS SHOULD I CONSIDER WHEN CHOOSING THE RIGHT POINT OF SALE AND ACCOUNTING SOFTWARE?
When you’re choosing point-of-sale and accounting software, several considerations can play into your decision. First, prioritize compliance by selecting a software specifically designed for the cannabis industry and compliant with relevant state and federal regulations. Second, seek integration capabilities, ensuring the software systems can seamlessly work together. This integration enables a comprehensive view of your financial performance. Third, assess scalability, ensuring the software can accommodate your business’s growth without becoming obsolete. Finally, prioritize user-friendliness, as it greatly impacts your employees’ ability to effectively use the software. Look for intuitive interfaces that facilitate easy adoption and utilization by your staff.
4. WHAT STRATEGIES CAN I IMPLEMENT TO OPTIMIZE MY CASH FLOW AND MANAGE EXPENSES EFFECTIVELY?
To optimize cash flow and manage expenses effectively, it is important to establish clear procedures and document them thoroughly, while also considering the impact of income tax. Train your staff to execute these procedures, and regularly analyze inventory with the help of an accountant to identify and resolve any issues promptly. Additionally, monitor and control expenses, negotiate with suppliers, and prioritize payments strategically. Maintaining accurate records and seeking professional advice will help you navigate complex tax laws and ensure compliance, ultimately optimizing your financial operations. Developing a robust cash flow forecasting system will also help you anticipate gaps and take proactive measures.
5. WHAT APPROACH DOES YEO & YEO TAKE TO ADVISING CANNABIS CLIENTS?
First and foremost, we are our clients’ partners in success. We work with them to build customized, right-sized relationships that help our clients remain compliant, organized, and growing. Our clients’ goals vary, but whatever their goals are — vertical integration, preparing for mergers and acquisitions, adding licenses, or opening a new location — we ensure they have the information they need to make data-driven decisions, and we are there to support them every step of the way.