A successful start-up in this industry begins with a thoughtful, well-written cannabis business plan. But, this doesn’t mean you can just scribble some ideas on a napkin and hit the ground running.
Sure, you can start with a casual plan just for your own sake. But investors, and more importantly, regulatory bodies, are going to want to see your business plan in a formal document in order to award you any funding or licensing.
This process doesn’t have to be complex or scary, however. I’ll walk you through the important steps in filling out your plan. But first, let’s cover what a business plan actually entails, and why it’s so crucial to your success.
What is a cannabis business plan?
A cannabis business plan is a document containing pertinent information on how you plan to start a successful business in the cannabis industry.
Think of it as a roadmap for your business – it takes you through every avenue of the process. When someone reads it, they should have a good idea of why you are starting the business. And, how you plan to get the job done.
Why you need a cannabis business plan for your dispensary
There are two main reasons you need a well-written cannabis dispensary business plan – for your own benefit, as a detailed guide, and so that regulatory bodies, aka those awarding you a license, can see that you mean business.
For your own sake
Putting together a formal document with all of the elements of your business plan will make it easy to follow as you start building the business.
A lot of decisions you’ll have to make can simply be determined by looking at your business plan. And once you’re in the process of putting the pieces together, you can simply check the plan for what’s next.
This written plan will be a huge asset in your entrepreneurial journey. But you also need it for another reason – the application process.
For the application & licensing process
Undoubtedly, the regulatory body in your respective state will want to see a formal, written business plan for your retail cannabis storefront.
This is to weed out the lazy people who will apply for a cannabis license just to do it. If you fill out your cannabis business plan before the application process, actually applying for your license will be way easier. But, if you are seeking financial support, investors will want to see this document too.
You will have considered many of the questions and addresses many of the aspects of the licensing application on your business plan, so it’s just a matter of referencing the plan throughout the application process.
But, how do you write a business plan that actually sets you up for success?
How to write a cannabis business plan actually works
Let’s go over the different parts of a business plan first. Not every single one of these sections needs to be on your plan at first, but eventually, you’ll want to touch on every one of these points.
Why you want to get into the cannabis industry
Start the plan with your “why”. Go at least a few levels deeper than “because the cannabis industry is a great opportunity”.
Do you want to make a positive impact in your community? For me, one of the reasons I started Cannabis Central was because if cannabis was coming to Ellensburg, I wanted to make sure I was a part of it, so I could make sure everything was being done legitimately.
At its most simple, the executive summary should include what you plan to accomplish. But, the different components of this section should touch on why you want to get into the cannabis industry again, but this time using more facts and figures, rather than emotions.
Touch on who your business is (yourself, location, business name), what you will offer to customers, who your ideal customer is (create an avatar), info on competing dispensaries, your team, and finally, a financial summary.
In this section of your business, you can take a deep dive on the analytics behind the cannabis industry, particularly in your state, county, etc.
Look at market size, industry trends, growth potential, identify customer segments, and include some information on the regulatory board and legal landscape you’ll be working with.
Another thing you can cover in this section is the problem-solution your business is taking on. Go over which market you plan on serving, and explain the problem they face that you have the ability to solve. For example, if your city only has one dispensary and it’s not conveniently located for a majority of residents, you can solve that problem with a closer storefront.
Marketing & Positioning
The marketing & positioning section of your cannabis business plan should be a comprehensive section going over how you are going to get people in your doors. Cover these five things:
- Positioning – Who is your product for? How is your brand unique?
- Product – What products are you serving to the market?
- Price – Where are you on the pricing scale? Loss-leader, high-price, somewhere in the middle?
- Promotion – How are you going to make people aware of your products?
- Place – Where will you be located? Are you a retail storefront or delivery service?
The operations plan should cover how you plan to get things done. Here, you’ll talk about your location, any POS technology you’ll be implementing, where you’ll be sourcing inventory, how you’ll hire people, and any security measures you’ll have in place.
This isn’t necessarily a required section, but having a section dedicated to compliance will help ensure you remain violation-free, and it will show your regulatory board you mean business.
Here, you can talk about how you’ll create a culture that meets the compliance requirements for operation in your respective state.
In this section, you want to mention any advisory members, part-owners, and staff that are going to help you accomplish your cannabis business plan. Include biographies on each key member. These should highlight why they’re a valuable member of your team.
If you already have investors, you can mention them here as well. This will serve as social proof to other potential investors.
This is one of the most important aspects of your cannabis business plan. This is where you’ll talk about where you’ll get the money to accomplish the things you’re setting out to do, and how quickly you’ll become profitable.
You’ll need to focus on profit and cash flow, as these are two separate metrics that investors and your regulatory agency want to see. Include revenue forecasts, financing, operating costs, budget, and P/L statements.
Need help writing your retail cannabis business plan?
If you are thinking of writing your business plan, or are stuck on a certain aspect, get in touch with me and I can help you out. I have real-life experience writing business plans that work, as my retail storefront Cannabis Central is still operating violation-free over 5 years later.
This is an incredibly important starting point, and can really make or break your success in this industry. The whole reason I started Cannabis Consulting Nationwide was to help people just like you with these crucial steps.
The first hour of my time is always free, and I am happy to help.