BusinessPlansandApplications

BusinessPlansandApplications

• BusinessPlanFundamentals• PrincipalsofCapitalizationandFinancing• ImportanceOfOperationsManuals

ExecutiveSummary• FirstPage– SnapshotofOpportunity

GivesaquickdescriptionofthebusinessGiveskeyfinancialfiguresi.e.,returns,investment,andequitystake,allinaquickandeasytoreadformat

• Basically,whyinvestorsshouldgiveyoumoneyinanutshell!

Problem

•Introduction•Whatproblemisthisbusinesssolving?•Andhowistheproblemgoingtobesolved?

BusinessDescription•Howthebusinesssolvestheproblem•Generaldescriptionofbusiness•Generalbriefoverview•GrowExample

ProductDescription

•Describesproductsindetailandbusinessoffers•Veryimportant,canbeadifferentiator•Getsmorespecificthanbusinessdescription•Pricingstructuresareincluded•Keyfeaturesofproductsoffered

MarketOverview•MarketBreakdown- extremelyimportanttounderstandmarket• Averagecustomer/user•Waysbusinesswillcapitalizeonthemarket• Estimatemarketsizeandhowlargeanindustryisv Again,itisextremelyimportanttounderstandmarket• Forcannabis,droppingpricesarekeytounderstandingwhetherabusinessisviable

Competition

• Importanttoanalyzecompetition• SWOTanalysis– Strength,Weakness,Opportunities,Threats• Howwillbusinessdealwithcompetitionandcarveoutitsownniche?Somethingunique?Price?Quality?•Mustunderstandcompetitiontoplanaccordinglyandanticipatenextmoves

InitialRolloutandPromotion

Howwillbusinessbegin?• Timeline?•Whatwillbedonetomarketthebusiness?• Aretherephasesofmarketing?• Benchmarkstobehit?•Whatisthemarketingbudget?

FinancialSummary•Whattypeofcapitalisrequired?•Whattypeofreturnsareexpected?•Valueofthebusiness•Whattypeofequitycananinvestorexpecttogetfortheirinvestment•Whatisthebreakevenpoint?•Budget•BurnRate

ManagementProfiles•Importanttohavetherightteam

•Managementcanmakeorbreakabusiness

•Importanttoshowinbusinessplaneach

manager’sroleandexperience

vBettertohaveaBideawithAmanagement

thananAideawithBmanagement

•Givescredibilitywhenbusinesshasan

accomplishedteam.

Conclusion

•Tieseverythingtogether•Onelastpitch,explainingthestrongpointsofthebusiness•Bringoutthepositiveshereonelasttime- makeitattractivetoaninvestor

ReasonsforBusinessPlan- Application

•Showthestateyourbusinessisfeasible•Byshowingfeasibility,increaseschanceofacquiringlicense•Demonstratesknowledgeofthemarketandabilitytorunthebusinessifgrantedalicense

ReasonsforBusinessPlanBesidesApplication

• Fundraising•Laygroundworktoexecuteobjectives•Forceyourselftothinkthroughthebusinessratherthanshootfromthehip•Planforwhatthebusinesswillneedforgrowth•Placesvalueonbusiness•Createsgoalsforexit•Helpsthemindtounderstandthewholeprocessandactaccordingly

ForecastingRevenue• Productsales•Mustaccountfordecreasingcannabisprices•Doforecastatseveralpricepoints•Importanttodoextensivemarketresearch•Beconservative,bettertooverperformthanoverestimatebusinessrevenue•ProFormaie.Financialprojections,assumptions•Thegoalofanybusinessistosurvive,mustmakesurethenumberswork

ForecastingExpenses•FixedCosts- Stayconstantie rent•VariableCosts- Changeswithamountusedie packaging•BreakEven- pointwherebusinessisselfSustainingBurnRate- Howmuchisthisbusinessburning

AndatwhatratebeforeitisprofitableRemembertohavebuffer,donotwanttoruntoolean

Self-Financed• Loanstocompany• HugePersonalRisk• Usuallysuggestedforhighnetworthindividuals• Ifnotproperlyexecutedcanresultinbankruptcy• Don’tthrowgoodmoneyafterbad

Investors- RaisingCapital

Investors

• GetFundingforEquity- tradeoff• BeginswithAngelInvestors• VentureCapitalInfusionbyVentureCapitalFirmasbusinessgrows• BothAngelinvestorandventurecapitalgroupsformingforcannabisindustry• PrivateEquity- asbusinessesmature• GiveUpControlofBusiness

ConvertibleLoans/Interest

• Investorsloancompanymoney• Getpaidbackacertainpercentage• Reservetherighttoconvertsomeofthedebttoequity• Thiscanbeimportantespeciallyifoutofstateinvestors• Usedtogetbettertermsfortheloan(ie lowerinterestrate)

EquipmentandRealEstateFinancing• Loans/Mortgages• Hardtogetwithnewbusiness•Mighthavetopersonallyguarantee• CoulddooptionofLandContract• Financeequipmentthroughequipmentdealers

Liquidity-Importanttohavemoneysetasidetorunbusinessuntilbreakeven-Statemaylookatthistoinsurebusinessdoesnotgounderifproblemsatthebeginning-Suggesthaving1yearofoperatingexpensesinthebankreadytobedeployed

Capitalization-Whoisputtinginthemoneytostart-Importantforbusinesstobeproperlycapitalizedorelsewontbesuccessful-Focusonpreviouslymentionedwaystoraisemoney

StandardOperatingProcedures-RunningaCannabisbusinessisanextensiveundertaking-StandardOperatingProcedureshelptoinsurequalityandconsistencyaswellascompliance-Importanttoputthesepracticesinplacefromthegetgo-IfnoSOPs,thingscangowrongveryquicklyie SpiderMitesScenarioExamples:Employeehandbooks,Facilityprocedures,CannabisLegalGroupComplianceManual

EmployeeSelectionandTraining

- Cleanliness

- Security

- Safety

- StandardOperatingProtocols

SuggestedBestPractices

- CannabisEmployeeStaffingCompany

- AdoptandLearnThirdPartyTrackingSystem

- CannabisBusinessConsultants

- KnowYourInvestors