Step 4: Develop a business plan
Now that you’ve found your market, established a viable business idea and ensured your entire operation is legal it’s time to develop your business plan.
A business plan is essential when starting any business, it’s a roadmap that enables you to plan the growth of your marijuana start-up. A business plan also helps you to easily communicate your goals and strategies to potential investors or funders.
First you need to know, what is a business plan?
A business plan is a single document that has the detailed outline of everything you want your business to be and become. It’s more than just a summary, you’ll need to include your market strategy, competition analysis, financial goals and issues, and even a development plan.
For example, a development plan, could include how you’ll develop your business, how you’re going to scale and grow your operation into a larger and more profitable enterprise.
Now, it’s easier than ever to produce a powerful business plan, considering the number of guides, software and consultants available. You can find a comprehensive business plan formatting guide here or if you’re looking for sample business plans you can find them here as well.
Cannabis specific business plan advice
In the weed industry, it’s critical to have a solid business plan since there are so many potential ways to make a legal mistake or accidentally forget something that could land you in hot water. If you’ll need funding for your marijuana venture, a business plan is non-negotiable. Here are a few key cannabis related factors you should include:
Products and services
- What does your product assortment look like?
- Will you be including CBD or is your business weed-adjacent?
- What segment of the market will you service? For example: Beauty, Accessories, Fashion, Art etc.
Customer and market analysis
- Who is your target customer?
- What does that customer look like?
Financing methods
- Where are you raising the money from to fund your business?
- Will you approach financial institutions, angel investors, venture capitalist or will you bootstrap your business?
- You can find all the various funding options and more about each one in our comprehensive resource: The ultimate guide to new business funding.
Marketing plan
- What is your brand or product’s name?
- What strategies have you developed to drive awareness and sales within your target demographic?
Strategy and implementation
- How will you implement your strategy and what channels will you use for execution?
- What digital channels will you use and why?
- Will you offer in-person or in-store events and promotions?
Sales forecast
- What is a realistic sales milestone?
- How will you reach your sales goal?
- When will you break even?
- What sales strategies have you put into place to reach your breakeven point?
Keep in mind that US entrepreneurs had to be agile in the beginning because of the constant change of legislation and regulations. To ensure your business can handle any unforeseen regulation changes you could add contingencies into your business plan. This will help show potential investors that you’re prepared for numerous outcomes.
You can find more lessons from the US Cannabis Market here.