Organizations that understand how to manage and control their costs of doing business are in a far better position to succeed in the long-term than organizations that don’t. This is just as true in the cannabis niche as any other. However, given the relatively uncharted territory, we are dealing with here cannabis dispensary operations are often at a loss as to how exactly they can begin this process.
Today we are going to take a look at this particular topic, and provide you with four tactics you can employ to move toward this goal:
1. Invest in Time-Saving Tech Upfront
Before you even open your doors for business, you can do quite a bit to control your costs moving forward by investing in the right technology. Cannabis POS systems that enable you to automatically generate legally compliant labeling or cut the time it takes to count your inventory in half can ultimately end up saving hundreds or thousands of man-hours in the long run, and are one great example of tech ever dispensary should consider investing in.
2. Consider Outsourcing
Another potential strategy cannabis dispensary operations should consider is outsourcing – particularly in regards to IT and security. Both of these aspects of your business are different enough conceptually from retail that there may not be a lot of overlap regarding the core competencies of your executive team with them. Technology and security experts can likely do a better job executing these functions for your organization, often at a lower cost than if they were kept in-house.
3. Carefully Manage Inventory
Inventory costs are easily one of the largest line-item expenses for any retail organization, including cannabis dispensary operations. Too frequently, dispensaries purchase their stock without regard to a long-term strategy for inventory management, which can have a real impact on your cash flow. Larger inventory sizes also lead to increased ancillary costs – you’re going to have to store the flower somewhere, securely and in a temperature controlled environment, repeatedly inventory it, and deal with spoilage/loss. Keeping your inventory at a reasonable and carefully managed level can help reduce many of these costs.
4. Track Sales Data & Product Performance
One final way dispensaries can control their costs is by carefully evaluating their sales data and product performance. This information is then used to influence marketing and promotional activities, inventory purchasing, and other critical aspects of your cannabis dispensary operations. A well-designed cannabis POS system can assist with this type of data analysis; it will help you learn which of your products sell best to which parts of your customer base and why ultimately helping you learn how you can maximize your profits.
While this short list is hardly exhaustive of the potential ways in which you can control your dispensary costs, it should provide you a good place to start. For more information on running successful cannabis dispensary operations covering everything from strategic decisions to correctly interpreting your internal reporting, subscribe to our blog.