How to write a business plan for an edibles brand?

Are you looking to start an edibles brand or expand your existing one? Writing a comprehensive business plan for your edibles brand is essential if you want to succeed.

This guide will provide in-depth information on how to write a successful business plan for an edibles brand. We'll cover why it's important to have a detailed business plan, what information needs to be included in the document and how best to organize it, and what tools can be used when writing up the document.

By following this guide, you'll have all the resources needed to create a thorough and effective business plan for your own edibles brand!

Why write a business plan for an edibles brand?

Before we dive into the content of the business plan itself, it’s important to get clarity on why we are creating this document in the first place.

There are three main reasons which we will discuss below.

To draw up a roadmap

Developing a business plan for an edibles brand is essential to establishing goals and objectives that can be used as a measure of success.

It also helps you identify potential roadblocks before they arise, allowing you to proactively anticipate any potential issues.

Writing a business plan forces you - the entrepreneur - to think critically about your products, target market, branding and go to market strategy, and financing requirements.

For startups just beginning their journey in the edibles industry, writing a comprehensive business plan will help understand what it takes to launch and sustain a financially viable edible products company over the long-term.

For existing brands already entrenched in the competitive landscape of edibles, creating a business plan can provide clarity on how far they have come, while setting achievable targets for where they want to go next - typically within 3-5 years.

To keep an eye on future cash flows

Writing a business plan for an edibles brand also enables entrepreneurs to regularly compare their financial performance to what was planned and recalibrate their financial forecasts if needed.

Regularly recalibrating your forecast enables you to maintain visibility over your brand’s future cash flows. This in turn helps the decision making process when it comes to planning the business’ expansion and managing funding requirements.

To secure funding

Whether you are starting a new edibles business or expanding an existing one, writing a comprehensive business plan is essential if you want to secure financing from a bank.

Banks use the plan to evaluate your financial prospects and determine whether you can repay any loan they extend to your business.

A sound and well-thought-out business plan should include market research, competitive analysis, financial projections, and other key elements that demonstrate the potential success of your venture.

Banks will use the document to assess your editable brand’s borrowing capacity and the risk they face by lending to your business.

Writing a business plan for an edibles brand is essential when seeking financing from equity investors. Investors will closely examine the plan to assess whether investing in your edibles brand can yield a good return on their investment.

They will therefore be looking for evidence of healthy growth, profitability, and cash generation projected in the business plan.

Crafting a comprehensive and effective business plan that meets these requirements is paramount if you want to secure funding from an equity investor.

In order to write an effective business plan, there are certain pieces of information that need to be gathered and included. Let’s explore what those key pieces of information are and how they should be incorporated into your business plan.

What information is needed to create a business plan for an edibles brand?

Carrying out market research for an edibles brand

Before writing a business plan for an edibles brand, it is essential to carry out market research.

Market research helps to provide insight into the current state of the industry and gives insights on potential customer needs and wants.

Additionally, market research can help inform product development decisions by uncovering trends in consumer preferences and tastes.

This information can be used to accurately forecast revenues, as well as identify areas of opportunity that may not have been considered otherwise.

This information is also key when it comes to writing the market analysis section of your business plan where you will aim to demonstrate to the reader that there is an attractive opportunity to be seized in your market.

Developing the marketing plan for an edibles brand

When creating a business plan for an edibles brand, it is essential to factor in the budget for sales and marketing.

This requires having in place an actionable marketing plan that outlines the resources and costs needed to execute each set of promotional activities.

The staff and equipment needed to run an edibles brand

When starting or expanding an edibles brand, it is essential to factor in the equipment and recruitment costs.

This includes decisions regarding the number of employees needed, any equipment or technology to be purchased, and other expenses related to launching or expanding the business.

Thoughtful planning around staffing and investments will help ensure your financial forecast is as sound as it needs to be.

Once you have the information needed to create a business plan for an edibles brand, it is time to move onto the next step: creating your financial forecast.

What goes in the financial forecast for an edibles brand?

The financial forecast for an edibles brand includes the Profit and Loss statement, Balance Sheet, Cash Flow Statement and Sources and Uses table.

Let’s have a look at each of these tables in a bit more detail.

The projected P&L statement of your edibles brand

A projected P&L statement for an edibles brand shows how much the business is expected to grow and generate profits in future years.

The projected balance sheet of your edibles brand

The balance sheet for an edibles brand is a financial statement that outlines the assets, liabilities, and equity of the company at a given moment in time.

Assets are items owned by the edibles brand, such as cash and inventory.
Liabilities are debts owed by the edibles brand, such as loans or accounts payable to suppliers.
Equity is the value of the edibles brand’s ownership in a company, including any retained earnings or common stock owned by shareholders.

Your balance sheet provides clarity about how much cash is available to pay creditors, the amount of debt owed on the edibles brand’s assets, and any other liabilities that need to be paid in the near future.

By analyzing the balance sheet, lenders, investors, and business owners can gain a better understanding of the financial health of the edibles brand and make educated decisions about their investments or partnerships with your business.

The projected cash flow statement of your edibles brand

A projected cash flow statement for an edibles brand shows how much money the business expects to receive and spend over a set period of time.

This is useful because it shows how the cash is being used and generated in the business and can help anticipate potential cash shortfalls and financing requirements.

The initial financing plan

An initial financing plan, also known as a sources and uses table, is a plan used when starting an edibles brand. It is a list that shows all the money coming in (sources) and where it will go (uses).

This can be useful because it helps to make sure there is enough money to cover the costs of starting an edibles brand. Having this plan can also help you determine how much money you need to borrow or get from investors.

Now that we have considered the financial forecast of our edibles brand business plan, it is time to turn our attention to the written presentation of the plan. This section provides the context required to properly evaluate and judge whether or not the financial projections are realistic and achievable.

It also contains other important information about how you will run your business and what makes it unique from its competitors.

What goes in the written presentation of an edibles brand business plan?

The written part of an edibles brand plan is composed of the 7 main sections:

The executive summary
The presentation of the company
The products and services section
The market research analysis
The strategy section
The operations section
The financial plan

Let’s have a look at each section in a bit more detail.

1. The executive summary

The executive summary of your edibles brand business plan should provide a comprehensive overview of the company's operations, objectives, and strategies.

It should start with a concise description of the business, including its history, growth prospects and competitive advantages.

The market overview should then outline the size, scope and outlook of the cannabis industry, plus any key trends that could affect the business.

Following this, the summary should include a brief overview of key financial information, such as projected revenue and profits, capital requirements, and sources of funding.

2. The presentation of the company

The presentation of the company should start by explaining the structure and ownership of the business.

It is important to clearly define the legal entity (such as whether it will operate as a sole proprietorship or corporation) and ownership of the company, as well as any associated shareholders and/or partners.

Next comes the presentation of the location where the business is based. It's important to consider factors such as potential customer base, competition, access to resources and more when choosing a location for your edibles brand.

Finally, it is important to include information about the management team in the business plan. Include relevant experience in the food or cannabis industry, sales and marketing, and finance.

3. The products and services section

The products and services section of your edibles brand business plan should present your products and manufacturing process.

Include details about the types of products you will offer (e.g., cookies, cakes, brownies), as well as how they are made (e.g., using organic ingredients), and how many you can make with your current production capacity.

Describe the features of each product and why customers might find them appealing. You should also touch on the levels of THC they contain and whether you obtained any licenses or labels.

Additionally, explain what type of customer service you will provide - such as delivery options or custom orders - and how it sets your brand apart from competitors.

a range of cookies mixed with edibles: illustration for the products and services section of the business plan

The market analysis

When presenting the conclusion of your market analysis in your business plan, you should include important details on demographics and segmentation, target market, competition, barriers to entry and regulation.

These components provide investors with an understanding of the competitive landscape facing your edibles brand as well as potential risks that may arise from regulatory concerns.

Understanding how customers are distributed across different segments is key. You should be able to identify distinct customer profiles or archetypes so you can create products that meet specific needs in the marketplace.

Additionally, having knowledge about who your competitors are and what strategies they utilize will enable you to craft better marketing messages and differentiate yourself from rival products.

Finally, it’s essential to have an understanding of any existing legal or regulatory obstacles which could impede progress in launching or expanding your operations - since these can have far reaching consequences if not properly addressed upfront.

5. The strategy section

The strategy section of your edibles brand's business plan should present your competitive edge, pricing strategy, marketing plan, milestones and risks and mitigants.

This information will give potential investors or banks an understanding of how your company plans to stand out in its market and what strategies you have in place to remain profitable.

The competitive edge should demonstrate why customers will choose your particular brand over other competitors. It could be based on quality ingredients used or unique flavors or levels of THC that set them apart from others in the industry.

The pricing strategy needs to be competitive while still allowing for enough profit to be generated to sustain operations.

Your sales and marketing plan should illustrate how your edibles brand intends on acquiring and retaining customers through multiple distribution channels.

The milestones section is important because it shows investors when certain objectives are expected to be achieved during each stage of growth for the company.

Lastly, all businesses come with inherent risks so outlining possible scenarios and solutions can help mitigate these risks if they were ever encountered by management down the line.

6. The operations section

The operations section of your edibles brand business plan should include the following information:

Team - Describe the team members and their roles in detail. Include a plan for recruitment, such as job postings and using recruitment firms.

Operating hours - Clearly state what the business’s operating hours are. These might vary from one department to the next. For example, your manufacturing lines could be opened 24/7 using multiple shifts, while your administrative staff follows a more conventional 9-to-5 schedule.

Key Assets and Intellectual Property - Identify any assets or intellectual property that your business needs to operate, such as patents, trademarks or copyrights.

Suppliers - Outline the suppliers your brand plans to work with for essential services and ingredients.

7. The presentation of the financial plan

This is where you will present the financial forecast we talked about earlier in this guide.

Now that we've outlined the content of an edibles brand business plan, let's look at some of the tools and resources available to help you create it.

What tool should I use to write my edibles brand's business plan?

In this section, we will review three different solutions to write an edibles brand business plan: creating it using Word and Excel, hiring a consultant, or using online business plan software.

Create your edibles brand's business plan using Word or Excel

Using Microsoft Word or Excel to create a business plan for an edibles brandhas its pros and cons.

On the one hand, using Word and Excel are cost-effective options as they are widely available and familiar to many business owners.

On the other hand, creating a financial forecast on Excel can be difficult for business owners without a strong knowledge of accounting and/or financial modelling, and may lead to inaccurate projections.

Additionally, creating a financial forecast on Excel will be both long and tedious, as well as hard to keep up-to-date.

Using Word to write the presentation of the plan works well, but it means starting from scratch with no pre-made templates or instructions to guide you.

Hire a consultant to write your edibles brand's business plan

Outsourcing the business plan for an edibles brand to a consultant or accountant can be a viable option, but there are both pros and cons which must be weighed before making a decision.

The primary benefit of outsourcing is that consultants and accountants are used to writing business plans and will likely have fewer mistakes than an entrepreneur with less experience.

They are also good at creating financial forecasts without errors, which can be helpful for investors or banks when making a decision on whether to fund the business.

On the other hand, hiring consultants or accountants can prove to be an expensive proposition - budget a minimum of $2,000 (or £1,500) - and there may be extra costs if the plan needs to be updated or modified.

Use an online business plan software for your edibles brand's business plan

Another alternative is to use online business plan software. There are several advantages in doing so.

You are guided through the writing process by detailed instructions and examples for each part of the plan
You can be inspired by already-written business plan templates and examples
You can easily make your financial forecast by letting the software take care of the financial calculations for you
You get a professional document, formatted and ready to be sent to your bank or investors
You can easily compare your forecast against your accounting data to make sure you are on track to deliver your plan, or make adjustments if needed

If you're interested in using this type of solution, you can try our software for free by signing up here.

We hope that this guide helped you get a better understanding of how to write the business plan for your edibles brand. Do not hesitate to contact us if you still have questions!