As mentioned in the first chapter, the business plan is the single most important document an owner needs to create during the process of opening their dispensary. To keep things simple, we’ve identified seven critical areas of focus that your plan should address, in order to gain licensing approval and attract potential investors:
Every business — regardless of the particular industry — should have an identified opportunity to provide a competitive advantage that will separate it from the competition. You’ll want to do in-depth research of the competitive landscape in the area in which you’ll be operating; what problems exist that your business can solve?
The opportunity element of your business plan will be one of the most heavily scrutinized by potential investors. They’re going to be looking for a strong competitive advantage — one that will give them the best chance at a high return on their investment. Your opportunity section should also include research into your target markets and demographics.
As the name implies, your execution element will contain all information related to the carrying out of your company’s operations. This component of your business plan should contain three distinct sub-sections:
• One covering your marketing and sales plan as well as community outreach efforts.
• One covering operations, locations and facilities as well as the technology and the dispensary POS software you’ll implement.
• Location – Select the municipalities you are most interested in, get a feel for costs, and pay careful attention to any needed capital improvements.Be aware, there may be legal mandates or zoning laws in place which restrict potential locations for dispensaries. We go into more detail on this in Chapter 7.
• Operations – This part should focus on how your dispensary will operate on a normal daily basis. Talk about your hours of operation, logistics, concerns related to sourcing your flower, who will be on your staff and what roles they will fill, the technology your dispensary will utilize, and other concerns of this nature.
One that covers the metrics and milestones you’ll use to measure your operation’s performance.
Naturally, your business plan will include a section dedicated to the structure of your company as well as the individual members of your leadership team. This includes a list of all the people who will be considered owners as well as their specific stakes in the organization. You’ll also want to describe the legal structure you intend to do business under and your reasoning for doing so.
With regard to members of management, be sure to include the relevant experience and skillsets of your leadership team, as well as explanations of how they’ll contribute to the success of your operation.
Of course, potential investors are going to be very interested in the financial outlook section of your business plan. This component should include three key items: forecasts, financing, and future projections.
For the forecast, describe exactly how you arrived at estimated values and projections, whether through market research or past results. With regard to financing, you’ll want to clearly state where you’ll obtain capital and exactly how you’ll use it. Finally, ensure your future projections are based on accurate data and vetted through your accountant or financial planner.
The preceding four elements are common to any business plan, regardless of industry. But because compliance with local and state laws is absolutely critical to cannabis business success, your business plan should include a dedicated section to exactly how you’ll comply with all relevant laws and regulations.
In this section, make a list of every compliance requirement or stricture that you’ll be subject to, as well as your specific plan to stay compliant with them. Make sure to include security measures you will implement to satisfy licensing requirements. The key here is to include details on your security camera system, security personnel, vetting process for employees (i.e. background checks) and how and where you will keep cash and cannabis products secure. In Chapter 5, we’ll explain how to approach estimating costs.