How to Save You From Yourself Part 2 of 3
Hello and welcome to theBlunt
Welcome back to “How to Save You from Yourself, part 2
Yesterday, we talked about bad decisions business owners make while looking for an easy button.
Today, the focus is on clarity.
What do we mean?
Well, here is an example that we see far too frequently and pretty much guarantees complete failure.
Every day we have a business owner ask us whether they should try to borrow money, whether they should bring in a partner, or whether they should just sell the license completely.
Do you know what we say and what they don’t hear?
Before you go to the marketplace and look for an ything, YOU NEED to have a clear picture of what it is you need.
What we have found after over a decade in the market is that when you provide people with too many options, they freeze and can’t make a decision.
It’s not that they “can’t” make a decision, it’s that somewhere along the lines our brains decided if there are too many options, then it’s just easier to ignore it and focus on something that is easy instead.
If you try to be flexible and give someone an endless amount of options, it almost guarantees that none of those things will happen and that you will fail instead.
See, cannabusiness isn’t easy.
It involves a lot of decisions. It involves making a lot of choices.
If you don’t have a clear picture… hence a clear presentation to the world… of what you need or want for your business, how do you expect anyone else to come to the table and make an offer?
You think to yourself, “all they have to do is make an offer and then we can start talking and work it out.”
Except, that’s not life.
If you need $500,000 to complete the HVAC in a building, then you need to be specific about that need. If you need $100,000 to pay off a loan you took out for the initial license acquisition, you need to be specific about that. If you need $350,000 to cover payroll for the next 8 months while your new product line gets out to the shelves of retailers, then you need to be specific about that.
The unfortunate reality is that you are not the only cannabusiness owner in existence.
Ouch. I know.
One of the biggest points of failure we see in this industry is when someone wants to list their license for sale, business for sale with a lease, or borrow money, or bring in a partner…. Yet all they say is “make offer.”
That’s not realistic. The guys who come to the table in that scenario will either be vultures who want a fire sale or worse, totally uneducated about the process which will put you and your license in jeopardy later.
Now, we are not saying you can’t offer your opportunity in different ways.
All we are saying is that if you are looking for an equity partner, be specific on how much of the company they will receive for the cash they contribute. When can they expect their payback? What will they be responsible for?
If you are looking for financing from a debt partner, what rates are you willing to pay? What current value do you have in the company or your inventory and assets that would make a lender feel secure? How long do you need their money? When will they be paid back? In 6 months? In 36 months?
If you are looking to sell the license, how much are you asking? Will you accept terms? Does it have to be all cash? Can the license stay in it’s location while the ownership transfers or does it have to move first? There are pros and cons to each of those scenarios that you need to understand.
Funny thing about the cannabis market place… since you are competing with hundreds of other licenses, if your pricing is out of line… you won’t get solid offers from legit buyers. They know how to shop the market.
If you don’t know what you want, how can you expect a buyer to make an offer? Remember, if you are not specific and are not realistic, then you are planning to fail. Don’t do that.
Does it take a little extra time to figure out what you need? Yes, it does. However, I promise by planning up front you will save yourself many months later that would otherwise be a waste of your time.
Need help? We have resources to help you take it to the next level. Give us a call at (206) 466-4020 or firstname.lastname@example.org. We’ll help point you in the right direction.