How to Write a CBD Business Plan – Your CBD business needs a CBD business plan. A solid business plan will help you maintain a forward trajectory regardless of complications, and may help you acquire funding, as well. Fortunately, business plans are relatively easy to produce and need not follow specific business plan guidelines. Just include all the most crucial elements of a CBD business plan and readdress the document at least every year to ensure you’re still on the right track. Don’t forget to edit and adjust your CBD business plan as necessary. Use this CBD business plan guide to help.
How to Write a CBD Business Plan
Your CBD business plan can be anything from a simple Word document to an elaborately designed presentation, but it must include the following elements. Each section describes your business and industry demand in more detail, which will help you determine action steps and help investors determine your business’s financial potential.
An executive summary is a short section (usually between 5-10 percent of the total document length) that briefly introduces your business and outlines each section of your CBD business plan. Notably, this section is critical as it is the first and most relevant bit of information in the entire document. Investors will refer directly to your executive summary, so it must dazzle. Specifically, the goal is to grab attention, deliver relevant information, and persuade the reader to invest in the company.
Your CBD business is an active contributor to the hemp industry. Use this section to describe hemp industry projections, particularly as they relate to your CBD business. For example, you might mention that the current CBD industry is valued at $2.8 billion USD with a compound annual growth rate (CAGR) of 21.2 percent between now and 2028. Notably, your industry overview should also highlight your company’s position against competitors, as well as the likelihood of new players joining the industry alongside you. This will help you determine your SWOT analysis, which we’ll discuss in further detail later. Indeed, this section is crucial for knowing how to write a CBD business plan.
Products and Services
The products and services section of your CBD business plan should outline the products you sell, how your company will price them, and how they compare with similar products on the market. As such, it’s always wise to offer unique or high-demand products to display your authority in the market. Nano CBD products, such as our nano gummies and tinctures, are excellent examples of high-demand CBD products you can sell in your hemp store. This section should also include information about your CBD product source, documentation standards, sales literature, and order processing and distribution logistics.
When considering how to write a CBD business plan, first determine your business goal and corresponding mission statement. A mission statement is a brief, one-sentence statement that outlines the business’s main goal or objective. It should address both employees and customers without limiting business function. Notably, your CBD business plan mission statement should outline the value your company provides, and why people should support it.
Business Structure, Roles, and Responsibilities
Your business structure will outline who the major players are in your business and what their roles are within the company. It should also explain what the expectations are for each role within the company. Specifically, this section should at least include the name, role, and function of each C-level position.
A SWOT analysis is a description of your company’s Strengths, Weaknesses, Opportunities, and Threats. A realistic look at these components can help your business position itself as an authority and stay ahead of complications before they become serious issues.
Your business’s target market is the carefully selected demographic that your company will cater to. Defining your target market will help you determine which products to sell in your store, how to market those products, and what your future projections might be. When determining your target market, consider things like how your target demographic will discover your brand, how you will cater to changing demand, and how you will maintain brand value.
Sales and Marketing Strategies
Something else to consider when learning how to write a CBD business plan are your sales and marketing strategies. Your sales and marketing strategy should include your unique value proposition, or the value you bring to your customers. It should also include your pricing strategy, sales avenues, distribution method, marketing plan, and budget. This section is especially crucial as it will outline the precise methods by which your company will generate income to maintain the cost of operations.
The forecast section of your business plan should outline the profits you expect your company to generate in a certain time. A solid forecast will help you plan your budget and trajectory and is usually based on past sales data. Notably, start-ups that don’t have their own sales data might consider economic trends, market research, and other competitive benchmarks instead.
To determine your forecast, ask yourself:
- What will the business accomplish in the next three months, six months, year, and five years?
- How many customers can I expect to acquire in these times?
- How frequently will each transaction occur and how much income will each transaction generate?
Banking and Payment Options
CBD companies must strongly consider which companies they bank with. Notably, though CBD is federally legal, its history leaves banking institutions in a tough spot. On the one hand, many banking institutions love to support small businesses. However, if those small businesses fail to comply with hemp regulations, the banks risk repercussions for handling “drug-related” currency.
As such, banking institutions may restrict CBD businesses, charge higher fees, or hold businesses to much stricter standards. For example, banks may require you to prove product compliance with receipts and COAs. As such, you must always maintain precise records and only conduct business with reliable, compliant CBD product distributors.
Budget and Expenditures
Your expense budget should outline all business costs, including operating expenses like rent, utilities, and payroll; direct costs such as the cost of goods; and all payments toward debts and assets. Note how all of these components affect cash flow and adjust your budget as needed to stay on target.
Final Thoughts on How to Write a CBD Business Plan
There’s plenty of room in the CBD industry. However, to be successful, you must know how to write a CBD business plan. Doing so will help you keep your business on track (and budget!) and may also help you secure financing as needed to grow your business.
Use these tips to learn how to write a CBD business plan, then contact us to place your first CBD wholesale order. We have many exciting CBD products to choose from! Check them out now!
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Abby is a freelance cannabis writer and Founder of Cannabis Content, a marketplace and training platform designed to connect cannabis creatives with businesses that need their services. Learn more at CannabisContent.net