With so many people jumping on the seemingly never-ending lucrative cannabis business bandwagon, we cannot stress how important it is for you to carefully think through your cannabis company before starting. You need to know the numbers.
Executive Summary/Business Modeling
Who you are. What you offer. Who you offer it to. What problem your business solves. Your target market. Your team. Your competition. Milestones and traction. Your financial summary. All very important information that you must know and include in your application.
Business Lifecycle Timeline and Milestones
What will happen during your business lifecycle? What dates will you get started? When will you get officially licensed? At what date will your company be fully operational? When will you need additional capital for planned expansion and what will that expansion be? Let us help you answer all of the questions.
Target Market, Customer Acquisition and Sales Strategy
Who is your target market? What is your positioning? How will you get and keep customers? Pricing? Promotions?
Products and Services
What Products will you offer? Services? What problem will they help solve? How will you bring them to your Target Market?
Startup and Financial Projections Summary
Doing 5 to 7 year pro forma financial projections is one of, if not, the most important piece of the licensure and operations puzzle. Your financial plan helps you anticipate your finances so you can accurately gauge your business’s projected performance. How will you know how much capital you will need to buy your equipment, build out your facility, hire personnel, and make sure you can pay them and your other expenses for months to come while working out the bugs in your operation to maximize your businesses profit potential? Profit and loss statement, balance sheet, cash flow statement, all this is key information. What is your sales forecast? Business ratios? Personnel plan? The list goes on and on.
A solid set of financial projections for you company will answer so many questions. How much will it cost to get the equipment. How much will it cost to run for the first year. What are my monthly operating expenses for year one? Year three? Year five? What staff will I need and how much will they be salaried annually? How much charitable contribution, along with tax revenue, and job creation, will I be providing to the municipality in which our business will be operating? Important questions indeed. And key metrics such as:
- Annual Revenue and Expenses
- Cost of Goods Sold
- Net Income
- Profit and Loss
- Income Statement
- Balance Sheet
In most states, a set of 5 year forecasting pro forma financials are required to get the key financial information that will go throughout the business plan as well as provide you with the key metrics and timeline information you will most definitely need to answer technical criteria questions on a lot of state applications, in various states. New Leaf can create solid financials for your company, no matter which state or license you are applying for.
Additionally, most states also have a minimum capitalization requirement that has to be officially reviewed by a licensed CPA, as well as the backing documentation to prove it. This is attested to by our CPA who handles all these requirements for you. We’ve got you covered.
Promissory notes are a promise to repay the lender(s) for the capital being provided by the lender to the company. Many times this is also a state requirement as well.