Once you’ve taken the first three steps to starting a cannabis business, the next logical move (and part of securing a license) is to write a business plan.
Writing a winning cannabis business plan is similar to writing a business plan for any other business—with the exception of focusing on a cannabis industry specific category. Cannabis business categories are: cultivation, manufacturing, distribution, transportation, retail (dispensing), or ancillary products.
For cannabis license applications, a business plan is always required and should aim to showcase the strengths of the proposed cannabis business. It can also highlight some of the benefits your company will bring to the community. Here are business plan segments that you should focus on.
Cannabis Business Plan Outline
- Mission and Vision: Strong business plans are clear and concise. That begins with the company’s mission and vision. Drilling down and clearly demonstrating what the company will do and how they will do it is the best indicator of a strong business plan moving forward.
- Industry and Market Overview: Provide a snapshot into the proposed company’s industry and market. This is necessary to show the profitability of the company. Include competitors in this snapshot to demonstrate your path to success by providing an in-depth comparison. By showing your competitors, you can show what sets your company apart, what will make the operation successful and how the product will flourish in the market.
- Product: Including the company product is a prerequisite since it drives profitability. Be sure to include product images and descriptions that are clear, tastefully assembled and given a unique spin.
- Marketing: Every business plan aims to demonstrate success and profitability. You should also take time to include and focus on the company’s marketing plan and strategy. A successful product relies on a successful marketing plan.
- Operations: Show the clear and concise methods and processes of your proposed operation to educate the business plan’s audience. In the case of cannabis business plans that are used mainly for licensing applications, your audience is a board or regulatory committee who may be misinformed. An operational blueprint is not only necessary, but beneficial in reaching an influential audience who could provide support for the industry. A few things to include in your operations plan:
- how you will manage your inventory to prevent fraud
- your plan for securing insurance and complying with state and federal law
- Team and Organization: In the cannabis industry, everyone is ready to show how profitable cannabis can be. Many groups and potential licensees overlook the other elements that contribute to long-term success: the company’s team and its organization, for example. Often, cannabis businesses are run by owners that are not always the best businessmen because they do not have the experience, nor the background, to run a successful business. Showcase a strong and qualified board of directors, management and employees to give your business plan a boost.
- Outreach: Every community wants to feel secure in knowing that the inclusion of cannabis businesses will provide some immediate community benefits. Include outreach elements such as:
- local law enforcement support
- community programs
- generate new jobs within the community—with an 80% local hiring plan
- commitment to livable wages + union: United Food and Commercial International Union(UFCW)
- Financials: No business plan is complete without financials. Showing steady growth and rates of revenue is always part of a winning business plan. Get in touch with our accounting, finance or consulting experts to help you draw and map out your financials. Check out our guide on how to calculate your initial startup costs to get the ball rolling!
Sample Cannabusiness Plan
This is a sample outline for a cannabis business plan:
- Legal Disclaimer
- Table of Contents
- Overview: what is the focus of the company? What type of cannabis business is the licensee looking to start? What product will the licensee sell to the consumer? What will the company provide the consumer? Its community?
- Mission Statement: What is the core valued delivered to the customer?
- Objectives: goals, what is aimed at? (in accordance with state and local laws, regulations, and goals) to produce what and how?
- Regulatory Permit Compliance
- Market Analysis: what does the market look like?
- Industry Overview
- Value Proposition
- Competitive Edge: Team
- Existing and proposed floor plans
- Security plan
- Equipment and machinery
- Target market: who is the consumer
- Why will the consumer buy the product?
- Growth Plan
It may seem overwhelming but there are resources and consultants who can help you create a winning business plan. Contact a Green Growth CPA team member today to get started.