8 TIPS FOR DOING IT RIGHT
Do you really need a business plan for your cannabis company?
It may be tempting to skip the business plan or create a very basic business plan, but you are likely to hurt your new venture before you open the doors.
A couple of years ago, all you had to do was open your doors and you’d have a profitable cannabis business. Now, the competition is fierce and fewer businesses were profitable in the first year.
What does it take to write a great cannabis business plan that will attract investors and help you build a profitable business? Read on to find out.
1. Don’t Skip the Research
Writing a business plan takes a lot of research. This may seem tedious and unnecessary, and you may want to gloss over it.
You cannot skip the research phase in your business plan. Your business depends on accurate information about your customers, competition, and the industry in California.
You have to be aware of the risks and opportunities in your business, a lot of which will be uncovered in your business plan.
2. Get the Brand and Value Proposition Right
Why will customers want to flock to your business? That’s an important question that lenders and investors will ask when you’re trying to get funding.
Your cannabis business plan needs to address what it is about your company and your brand that customers will relate to.
Your research into your customers will reveal what they want from a cannabis business. You can position your brand and value proposition to set your business apart and attract those customers.
3. Show Strong Financials
The heart of your business plan will be around the financials of the business. You need to show that you have a projected path to profitability.
Since you do need to show the potential of your business, it doesn’t mean that your projections have to be completely optimistic.
Your financial projections should be conservative. This is often difficult for entrepreneurs because they’re optimistic by nature.
4. Back Up Every Claim and Detail with Data
In your business plan, you’re going to make a lot of assumptions. You are projecting your financials several years out, you’re assuming that your company is well positioned in the marketplace.
People who read your business plan will wonder where you came up with your facts and figures. You have to back up every claim and assumption that you make with data.
You have to show that you did your homework and there’s a reason why your projections are what they are. To leave out the data will only appear that you pulled your numbers out of thin air.
That won’t inspire investors to take a chance on your business.
5. Answer the Question “Why Will Your Cannabis Business Succeed?”
The job of your business plan is to build the foundation of the business. It helps you think through every potential outcome and possibility for your business.
Most of all, it will give you every reason why your business will or won’t be successful. That’s what you’ll find in the most in-depth business plans.
Some business plans will skim over this question. Instead, they’re presenting an overly optimistic picture of the business. That can get them in trouble in the long run.
6.Think in the Long Term
A cannabis business plan forces you to see the 30,000-foot view of your business. That can be very difficult to do when you’re so close to your business.
For many startup founders, they get too stuck in the day-to-day activities and find it difficult to see the long term viability and strategy of the business.
You may want to hire cannabis business consultants who can give you an objective view and help you see the big picture.
7. Refine and Revise Your Plan
Your business plan is never set in stone. It will require that you review it and revise it regularly. There may be changes in the regulatory environment in California. That would impact your business and you’ll need to adjust your business plan accordingly.
8. Don’t Stick Your Business Plan in a Drawer
You invested time, money, and resources into creating your business plan. The mistake that too many startups do with the plan is that they stick it in a drawer and don’t look at it again.
A cannabis business plan is really a living document. It’s something that will change and require adjustments as you learn and your business grows. It’s also your road map that should guide you as you make strategic decisions about your company.
Sticking it in a draw will only ensure that you forget about what’s in it and your business will run like a ship without a rudder. You’ll be directionless, drifting about.
Review your business plan anytime you have to make a strategic decision and again once a month to make sure your business is on track.
Write a Strong Cannabis Business Plan
Opening a cannabis business in California is a smart move. More people recognize that there are plenty of opportunities to build a successful business.
The foundation of your business has to be a cannabis business plan. The business plan serves to help you think through every single detail of your business.
If you need assistance getting your cannabis startup off the ground, our firm can help. We can work with you on everything from your startup plan to exit strategy. Contact us today to find out more.