mjba seattle meetup 1/20/2015 - what every marijuana retailer should know about building a...
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What Every Marijuana Retailer Should Know About Building A
Successful BusinessMatt Beckley and Ben Curren
Who is Ben Curren?
A Family Man
A Nerd
A Software Engineer
An Entrepreneur
Founder of Esomnie, Bootstrap
CTO and Founder of Outright
Still serving over 800,000 small businesses
Processed over 6 billion financial transactions
Grew to 60 employees
Raised 11M in capital from top tier investors
Acquired by GoDaddy July 2012
CEO and Founder of GreenBits
Founded May 18th, 2014
Launched with 3 Washington stores in July 2014
5 person team
30+ retail stores in Washington
I worked with the best mentors
Marc Andreessen – CoFounder of Netscape
Bryan Schreier- Partner @ Sequoia; Dropbox board of directors; Google
Rob Hayes – Partner @ First Round Capital; Mint.com investor
Mark Goines – Angel Investor; Everything small business
Ravi Mohan – Partner / Founder Shasta Ventures; Nest Investor
This is what I learned
A successful business is a money printing machine
How big can your business grow?
How fast can you feed your business cash?
How much time before money comes out?
What is the ratio of cash in and cash out?
Cash In Cash Out
Time
Your job as an entrepreneur is to build a “machine” that fits your goals. Lifestyle business.
Boutique business.
Large enterprise.
Create a lifestyle business model based on your goals.
Goal: Replace my income of $60,000 / year. Meet new people. Control my destiny and don’t work for “the man”.
Model: Hire 3 people. Sell $66,000 of product. Margin of 30%.
Create a enterprise business model based on your goals.
Goal: Generate 120M run rate in 5 years. Profit margin of 40%.
Model: Open 30 stores between Washington and Colorado with average monthly revenue of $333,000.
Create KPI’s that verify your business model.
Choose 5 – 6 KPIs, key performance indicators, to work on at a time.
Revenue KPI examples
Average revenue per sale
Average units per sale
Average profit per sale
Sales per square foot
Customer satisfaction KPI examples
Average rating of 4/5 for 90% of all surveys
Everything program or process in your business should tie to a KPI
KPIs
Programs and
Processes
Business Model
Note: Your goals should not change often.
Interesting programs we’ve seen.
Barcode all products when placed into inventory
Outcome Budtenders scan item when ringing up a sale. No manual mistakes.
Budtenders don’t need to understand the details of traceability.
Hire budtenders who know the product well.
KPI 0 LCB compliance citations
Ringing up sales should take less than 60 seconds on average.
Stock an ATM with cash from your vault
KPI Reduce fees for cash payments to 1% of all deposits.
How1. Create a company for your marijuana retail store.
2. Create a company without a cannabis sounding name.
3. Get an ATM machine under your non-cannabis company and tell them you fill it with cash yourself.
4. Daily fill the machine with cash from your cannabis company transactions.
5. The money withdrawn will be deposited to your non-cannabis company account.
6. Bonus: You can also sell T-Shirts and other items through your non-cannabis company.
Minimize your cannabis tax obligation IMPORTANT NOTE: Starting February 11th, 2015 this activity is not allowed. The LCB posted emergency rulings that stopped this controversial practice.
How (please check with your tax accountant)1. With customer consent, sell a paraphernalia item with every marijuana sale.
2. When ringing up the sale, discount the marijuana item to cost and add the increase the cost of paraphernalia a similar amount.
Outcome Decrease your excise tax obligation.
Decrease your federal tax obligation.
Shift more profits to paraphernalia for more write offs.
280e – write off expenses by % of revenue for non-cannabis items
KPI Reduce tax obligations to 40% of profit.
Partner with the best. Verify they are the best
How Choose your producers and processors wisely and become partners
with them.
Dedicate 10% - 20% of your COGS to new experimental partners and products.
Grade each vendor by KPIs such as margin, customer satisfaction, % of sales.
Champion vs. Challenger mentality.
Be transparent and explain to partners they have to perform.
KPI Average profit per shelf space square footage should be > $30.
Questions or comments?Green Bits Point of Sale and Inventory Management Solution Easy to use.
Automatically reports to the WSLCB. No work on your part required.
Manage your cash and you products.
Run the reports you need to make the best decisions for you business.
Try it Yourself at our booth at THIS MEETUP
Contact Us Ben Curren – [email protected] Matt Beckley – [email protected] Visit our website: http://greenbits.com Call us: 877.420.7628