Cannabis use in Canada increased significantly after its legalisation.
With more people using, there are more opportunities for those who want to start their own business.
However, before you jump into things, it's essential that you start with a cannabis business plan. This will help you establish how you're going to run your business and what you need to do to succeed in this industry.
A huge part of your business plan is your budget. If creating a budget for your cannabis business seems daunting, keep reading. We'll tell you exactly what you need to know to create one.
1. Do Your Research
The more time you spend on this step, the easier the other steps will be.
It will also allow you to have more accurate numbers, which will improve your chances of hitting your sales goals.
Here are some things you should know before sitting down to create a budget:
- How many people live in your area
- How many other dispensaries are in your area
- Estimated percentage of cannabis users near you
- What products you are planning on selling
- How much nearby dispensaries are selling similar products for
- Costs of all equipment needed
- The average rate of pay in your area
You may also need to figure out rent costs, shipping costs, and other factors, depending on what you'll be doing for your business.
Once you have all these numbers handy, you can move on to the rest of the steps.
2. Calculate Estimated Revenue
The first thing you'll want to do is figure out how you're going to make money and how much money you expect to make in the first five years of running your business.
To do this, figure out how many customers you can expect to have, how much each customer may spend each month, and what your net profits are based on what they're buying.
3. Determine Staffing Needs
The next thing you need to think about is how many people you will need to hire to keep your business running smoothly.
Think about how many total man hours will be needed per week and how many people are needed to complete those.
4. Figure Out Your Operating Budget
This part of the budget should include expenses like:
- Office supplies
- Packaging
- Building rental fees
- Equipment maintenance
- Payroll for employees
Once you finish this part of the business, you should know how much it will cost to run your business.
5. Create a Projected Profit and Loss Statement
The final step in creating a budget is to summarise all your information in what's known as a projected profit and loss statement (P&L).
This will help you know exactly what you need to do to run a successful business.
Ready to Start Implementing Your Cannabis Business Plan?
Now you know how to create a budget as part of your cannabis business plan.
As you can see, the steps required are simple, though it may take some time and research to determine your expenses and projected income.
If you have your business plan and are ready to start financing it, contact us today. We'll let you know how we can help you get the money you need to purchase the necessary equipment to get started in this exciting industry.