5 Key Items for Your Cannabis Dispensary Business Plan
Business plans create a common vision so that management may work in harmony toward a shared set of goals. A medical marijuana dispensary business plan also forces the business owner and leadership team to carefully and honestly evaluate the feasibility of the business. Think of your plan as a practice run where you can spot and eliminate problems prior to your dispensary’s launch. A well-written business plan will save investment funds by preventing potential problems. You can also think of your business plan for medical cannabis dispensary commerce as marketing collateral. After all, potential investors will review your plan to determine whether they’d like to invest in your company. Finally, a business plan is often essential in obtaining a dispensary permit.
In the end, a company without a business plan is planning to fail. Let’s take a look at five important elements to include in your cannabis dispensary business plan.
Medical Marijuana Dispensary Business Plans: 5 Critical Elements
- An Executive Summary-As in most written documents, the first few lines are the most important. With just a sentence or two, an investor will quickly figure out whether your business would be a worthwhile investment. Included in the executive summary is the value proposition, which is like an elevator pitch for your business. The value proposition outlines what your company will do, how you plan to make money, why customers will want to pay for your service, the amount of money you require from investors, and how you will use that investment money. While the Executive Summary is traditionally placed at the beginning of the business plan, it should be written last, once you have a clear vision for your company. Basically, the executive summary quickly distills the weeks of work you’ve put into the overall business plan. An effective business summary should be no more than two pages in length.
- Market Opportunity-Within the market opportunity section, you should describe your target market. List the size and growth rate of the market, opportunities, risks, and how you will deal with market threats. Include site use analysis, such as how your location would abide by state dispensary zoning laws. The information in this section may be culled from industry associations, census data, other business owners and chambers of commerce. However, because the marijuana industry is still in its infancy, you may need to rely on cannabis consultants for reliable research.
- Evaluate Competition-Understanding your competitors will allow you to better pin down your company’s unique value propositions. In the competitor evaluation section of your cannabis business plan, outline what share of the market competitors currently own; competitor niches (edibles, oil, flowers, pain relieving CBD strains, etc.); why customers will choose you over competitors; barriers to market entry, and profiles of indirect competitors who could pose a threat in the future.
- Business Model—If an investor has gotten this far in your business plan, they’re ready to read details about how you will do business. Outline your revenue streams and operation cost structures. Specify any assumptions you’re making, and why you’re making them. Also describe key suppliers and distribution partners.Your day-to-day operations will also be included in this section. Some cannabis consultants consider this the most important ingredient in a dispensary business plan. Why? Because multiple states review operation plans prior to awarding dispensary licenses.During your discussion of your business model, describe the following elements:
–Additional products, such as tinctures, edibles, and concentrates
–Regular reporting you’ll do to track your company’s performance.
State licensing boards look to this section of a business plan for medical cannabis dispensary licensure.
- Financial Projections—Consistent cash flow is a major hurdle for new businesses. Even if a firm makes excellent profits, it may not be able to survive if it lacks the liquid assets to pay operation expenses. A business plan should include estimates on how much your cannabis business stands to make and when the cash will flow in. Include three years of forward-looking profit-and-loss reports, cash-flow statements, and balance sheet analysis projections.
Strong business plans
will also require additional planning in security and marketing. Inventory control, grow capacity, and HR considerations are common components as well. Business plans may also outline earth-friendly operation approaches.
As you’ve likely realized, business plans are not the sort of document you can jot down in a snap. They require careful research, extensive revision, and plenty of team communication. Bulbulyan Consulting Group can give you the insider knowledge needed to draft a stellar business plan. We can create a custom dispensary business plan catered to your state’s regulations. Bulbulyan clients are consistently awarded dispensary licenses, even in competitive markets, thanks to the expertly crafted business plans we create. Call us now to learn how we can pen the perfect business plan for your dispensary.