Great ideas need to be structured, ordered and transparent in order to allow you, the entrepreneur, and others to clearly grasp your objectives and proposed path to success. To achieve this, you need a business plan.
A business plan for a marijuana establishment is a written document that describes in detail how a business is going to achieve its goals, and lays out a written plan from a marketing, financial, and operational viewpoint. Business plans are a fundamental tool that any startup cannabis business needs to have in place prior to beginning its operations. Usually, banks and venture capital firms make the existence of a viable business plan a prerequisite to the investment of funds in a business, especially a cannabis business. The business plan helps the owners, lenders, and investors break uncertainty down into meaningful pieces, like the sales projection, expense budget, milestones, and tasks.
Most importantly, it enables you, the owner, to have a clearer, defined picture of potential costs and drawbacks to certain business decisions in your marijuana business, the impact of Section 280E of the U.S. tax code, and it helps you to modify your structures accordingly before implementing these ideas. It also enables owners to project what type of financing will be required to get the business up and running.
The need and benefit of this structured approach becomes apparent as soon as you realize that you don’t know how much money you need, and when you need it, without laying out projected sales, costs, expenses, and timing of payments. This is true for any startup, regardless of whether or not you need to convince investors, banks, or lenders to part with their money and fund a marijuana business based on your business plan.