The cannabis market is booming both in the US and in international markets. Sales of legal marijuana in the US, for instance, is expected to reach $13.38 billion in 2019, according to data gathered by Statista. It also expects that the industry will continue its upward trajectory to an estimated $24 billion in revenue in 2025. The same prediction is shared by other research firms for the rest of the globe. Grand View Research, for instance, predicts that the global cannabis market will reach $66.3 billion by the end of 2025.
How do you get a foothold in this billion-dollar industry? You can start by writing a business plan that you can use as a roadmap for starting or growing an existing company. This document can also help you secure that much-needed funding from investors and lenders.
Here, we will break down important sections that you need to complete your cannabis company business plan.
The section that is often written last, the executive summary provides a succinct overview of what your business is about. This is also the section where you could win or lose an investor, so you'd do well to include here key investment highlights, such as what makes your cannabis business stand out, and the market opportunity, which describes the unsatisfied areas of the market that your business could fill.
The company analysis describes your business. In this section, you can introduce your company, including its concept, your vision for it, business model, and product offerings. You can also highlight its unique qualifications, or what makes your products stand out from the hundreds of other cannabis-based products in the market.
The industry analysis section details where the entire industry is headed. No investor worth his salt will inject money in a business belonging to an industry on life support. You should describe in this section the current performance of the industry and where it is headed. For instance, the global cannabis industry is projected to have a compound annual interest of almost 24% in the next six years. That is one piece of data that would bring most investors to your side.
Also referred to as the market analysis section. This section defines your customer base, or the end user. In most industries, a number of varying demographic groups contribute to the total industry revenue differently. For instance, individuals belonging to the millennial generation have different spending habits compared to the older generations when it comes to their cannabis purchases. It's important to determine the size of these groups to give yourself and your investors an idea about the size of the market you can offer your products to.
This section gives your reader an overview of your industry's competitive landscape, particularly who the main players are, how concentrated their market share is, and the barriers to entry. This section not only shows that you are aware of the competition, it also offers you the opportunity to show your readers what makes your company stand out.
This section tells the reader you plan to promote your product to your market. It should include your overall strategy and the channels and tactics that you plan to employ to make that strategy work. For example, if your research shows that cannabis users use social media a lot, then it's a good idea to develop a social media plan to make sure you reach those prospective customers.
This part often includes information on the management team and their backgrounds, corporate structure, key hires and their roles in the operation, business hours, and production details. In sum, this section gives your readers an idea on how your daily operation will be like and what kind of people you need to run the company.
You can expect this section to be scrutinized diligently by the investors and lenders you're trying to woo. Think of this section as an estimate of your business's future financial performance. Here, you should provide your readers with a breakdown of how your fund allocation and financial assumptions. You should also add an Appendix section where you can attach financial statements to support your claims.
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