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Starting a cannabis business is just the same as any other small business. You need a business plan for it.
Interested in running a cannabis company? That’s great! The industry has since grown due to the fact that more countries are legalizing its use. Take a look here in America, research shows how 1 in every 5 Americans live in a state where recreational use of cannabis is permitted, even without a doctor’s note.
And it’s true the cannabis industry will continue to grow. It’s expected that by 2021 marijuana sales would reach as high as $20.2 billion. That said, if you’re planning to start your own cannabis company then you better gear up to enter an oversaturated market.
But before delving into the nitty-gritty details, keep in mind that starting a cannabis company won’t be entirely smooth-sailing. There will be heaps of challenges that you would have to go through, confusing laws and regulations to understand, and steep taxes to pay. However, these should not discourage you. Why? Because this article will help you be better prepared.
Like starting any other company, the key to making it successful is to stay organized. This is where your business plan comes in. It will help you navigate through the industry and ultimately allow your company to compete successfully in the market.
So let’s start.
Your business plan is like your bible. It will contain your strategies, operations manual, sales funnel, and all the other key details that will make your company successful.
The executive summary should be concise, keep it at 1 or 2 pages. This will serve as your stand-alone document and summary of your entire business plan.
When writing the executive summary, keep in mind what your cannabis company is all about, who you are, what you are doing, and what you want from the people reading it (aka your investors).
The business plan should include the problem your cannabis company is trying to solve. Say, for example, you live in a place where there are tons of dispensaries but the problem is they sell similar products, and the customers in that area are looking into variety--something with more character.
The solution? Your cannabis company will provide customers with high-quality edibles and topicals. Not only that, but you will also be providing excellent customer service and rewards options for customers.
Knowing who your target market is important especially if you’re just starting your own cannabis company. The reality is that not everyone will be your ‘ideal customer’ so you have to identify those who are willing to pay for your cannabis products versus those who you can realistically acquire during the first few years of opening your business.
It’s best to create a character outline of your ideal customer.
The cannabis industry is growing, so it’s important that you don’t forget to include the competitor list in your business plan. This will help you understand better about the value you’re putting in the market.
Once you finalize the list of your competitors, it will help you better understand what your cannabis company should offer.
This section should include company positioning or how you’re going to brand yourself in the market, the pricing, advertising plan, and the third-party organizations you would want to partner with.
Aside from that, cannabis companies should also have a website. This would help your target customers better visualize what your products are.
This part of your business plan will contain the technical details of how you’re going to run your cannabis company.
Remember that your business should have a physical store where they can go and check out the products. Likewise, you should also have a storage place where you can place the products that are not on the shelf yet. Thus, you have to ensure that your store is located on a compliant property.
You would also have to consider your labeling and packaging and of course an efficient inventory system to track the inflow and outflow of your stocks.
Basically, this part will make your day-to-day operations as smooth as possible. Drafting an operations manual will give you a clear picture of what should be done on a daily, weekly, and monthly basis.
The financial plan, when you look at it, is the core of how your business will stay afloat. This will include your profit and loss statement, cash flow, sales forecast, and balance sheet.
A financial plan will help you gauge how your cannabis company is doing given the market conditions.
This section will show what your company’s organizational structure will look like. It will include your company’s mission statement, legal structure, and business location.
Today, there are more opportunities for people to start their own cannabis companies. With the right amount of preparedness and grit, you may also be on the way to achieving great success in the cannabis industry.
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