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How to write a successful business plan for the marijuana industry in Canada

A business plan is a document that describes how a business, usually a new one, is going to achieve its goals.

Like any business or economic sector, the cannabis industry, whether you're considering retail, wholesale, production or distribution, you'll need a business plan to minimize risk and increase the chance of a successful and lucrative long-term business.

A business plan lays out a written plan from a marketing, financial and operational viewpoint. Sometimes, a business plan is prepared for an established business that is moving in a new direction, for instance an oil-based business moving into the marijuana industry.

A business plan is a fundamental tool that any startup business needs to have in place prior to beginning its operations. Usually, banks, lenders, financiers, venture capital firms and investors require a viable business plan as a prerequisite to the investment of funds in a business.

If you need a business plan for your new cannabis business, contact us here.

A good business plan starts with an executive summary of the business; it includes a detailed description of the business, its services and/or products; and states how the business intends to achieve its goals. It should also provide at least an overview of the industry of which the business will be a part, and how it will distinguish itself from its potential competitors.

A complete business plan must also include a set of financial projections for the business. These forward-looking projected financial statements are often called pro-forma financial statements or simply the "pro-formas".

They include the overall budget, current and projected financing, a market analysis, and its marketing strategy approach. In a business plan, a business owner projects revenues and expenses for a certain period of time, and describes operational activity and costs related to the business.

With the cannabis industry, there are legal, regulatory and financial risks involved, and as a new business, it's both important and essential to conduct due diligence to minimize risk. This means building a business plan based on reality specific to the marijuana sector.

The idea behind putting together a business plan is to enable owners to have a more defined picture of potential costs and drawbacks to certain business decisions and to help them modify their structures accordingly before implementing these ideas. It also allows owners to project what type of financing will be required to get the businesses up and running.

The length of the business plan will vary greatly from business-to-business, but in general, all of the required information should fit into a 15 to 20 page document. If there are crucial elements of the business plan that take up a lot of space, such as applications for patents, trademarks or intellectual property, they should also be referenced in the main plan and included as appendices.

If there are any especially interesting aspects of the business, they should be highlighted, and used to attract financing.

A business plan is not meant to be a static document. As the business grows and evolves, so should its business plan. An annual review of the plan allows an entrepreneur or business person to update it when taking evolving involving markets into consideration, and it also provides an opportunity to look back and see what has been achieved and what has not.

 

If you require information, help with your business or regulatory consulting, please contact us.

 

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