A commercial cultivation business plan provides a snapshot of your current commercial cultivation operation and outlines your growth strategy for the next five years. It explains your company’s goals and strategy for achieving them. Market research is also included to back up your plans.
What is the Purpose of a Commercial Cultivation Business Plan?
A business plan is required if you want to start a commercial cultivation operation or expand an existing commercial cultivation operation.
A business plan will help you raise funding and plan the expansion of your commercial cultivation operation, increasing your chances of success. Your commercial cultivation business plan should be updated on an annual basis as your company grows and changes.
Sources of Funding for Commercial Cultivation Businesses
Personal savings, credit cards, and angel investors are the most common sources of funding for a commercial cultivation operation.
Angel investors are one of the most common sources of funding for a commercial cultivation operation. Angel investors are wealthy people who will give you money. They will either take equity or give you a loan in exchange for their funding.
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A commercial cultivation operation will not be funded by venture capitalists. They might consider funding a commercial cultivation company with multiple locations, but never one.
This is because most venture capitalists expect to receive millions of dollars in return for their investment, and a single location is unlikely to produce such results.
Commercial Cultivation Business Plan Template
Your commercial cultivation business plan should include these sections as follows:
Executive Summary
Your executive summary introduces your business plan, but it is usually the last section you write because it summarizes each key section of your plan.
The purpose of your Executive Summary is to quickly pique the reader’s interest. Explain the type of commercial cultivation operation you have and its status; for example, are you a startup, do you have an existing commercial cultivation operation that you want to expand, or do you run a network of commercial cultivation operations?
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Following that, provide an overview of each of your plan’s subsequent sections. Give a brief overview of the commercial cultivation industry, for example.
Discuss your commercial cultivation methods. Provide information about your direct competitors. Provide an overview of your target audience.
Give an overview of your marketing strategy. Determine who the key members of your team are. Also, provide an overview of your financial plan.
Company Analysis
You will describe the type of commercial cultivation operation you run in your company analysis.
For example, you could run one of the following businesses:
- Indoor: This type of operation is contained in one or more warehouses, allowing for control of the growing environment and year-round operation.
- Outdoor cultivation: this type of cultivation is more seasonal, but it is more environmentally friendly and has a lower operating cost.
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The Company Analysis section of your business plan should provide background on the business in addition to explaining the type of commercial cultivation operation you have.
Analysis of the Industry
You must provide an overview of the commercial cultivation industry in your industry analysis.
While this may appear to be superfluous, it serves several purposes.
First and foremost, researching the commercial cultivation industry will educate you. It aids in your understanding of the market in which you operate.
Second, market research can help you improve your strategy, especially if you identify market trends.
The third reason for conducting market research is to demonstrate to readers that you are an expert in your field. You accomplish this by conducting the research and incorporating it into your plan.
Customer Analysis
The customer analysis section of your commercial cultivation business plan must include information about the customers you serve and/or anticipate serving.
Customers segments include the following: Manufacturers, dispensaries, and other cultivators, for example.
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As you might expect, the customer segment(s) you select will have a significant impact on the type of commercial cultivation operation you run. Manufacturers, obviously, would want different services and would respond to different marketing tactics than dispensaries.
Competitive Analysis
Your competitive analysis should identify and prioritize your company’s indirect and direct competitors.
Other commercial cultivation operations are direct competitors.
Customers may use indirect competitors in addition to direct competitors. Pharmaceutical companies and vertically integrated operations are examples of this.
You must mention such competition to demonstrate that you understand that hemp will not meet all fiber or supplement demand.
Concerning direct competition, you should describe the other commercial cultivation operations with which you compete. Most likely, your direct competitors will be commercial cultivation operations located nearby.
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Marketing Plan
A marketing plan has traditionally included the four P’s: Product, Price, Place, and Promotion. Your marketing plan for a commercial cultivation business should include the following:
Product: Reiterate the type of commercial cultivation operation that you documented in your Company Analysis in the product section. Then, describe the specific services you will provide.
Price: Write down the prices you intend to charge and how they compare to those of your competitors. Essentially, the product and price sub-sections of your marketing plan present the products and services you provide, as well as their prices.
Place: The location of your commercial cultivation operation is referred to as place. Document your location and explain how it will affect your success.
Is your commercial cultivation operation, for example, in a central location that will facilitate transportation, or in a location where the terroir is well-suited to a specific strain, etc.? Discuss how your location may enable you to serve a larger number of customers.
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Promotions: The promotions section is the final section of your commercial cultivation marketing plan. You will document how you will drive customers to your business in this section.
Operations Plan
While the previous sections of your business plan described your objectives, your operations plan describes how you will achieve them. Your operations plan should be divided into two sections, as shown below.
All of the tasks involved in running your commercial cultivation operation, such as tilling, planting, growing, harvesting, and curing the crop, maintaining equipment, staying abreast of new technology and/or regulatory developments, processing paperwork, and so on, are examples of everyday short-term processes.
Long-term goals are milestones that you hope to reach. These could include the dates you expect to sign your 25th supplier contract or reach $X in sales. It could also be when you plan to buy more land or when you plan to open a new location.
Wrapping Up
Creating a Commercial Cultivation Business Plan for your company is an important step. If you follow the template above, you will be a true expert by the end.
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You will gain a thorough understanding of the commercial cultivation industry, as well as your competitors and customers. You will have created a marketing strategy and will have a thorough understanding of what it takes to launch and grow successful commercial cultivation.
