Edibles Business Plan Template
If you want to start an edibles business or expand your current edibles business, you need a business plan.
The following business plan template gives you the key elements to include in a winning edibles business plan.
Edibles Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a new edibles shop located in the heart of [location]. Our shop provides a wide variety of edible products that will appeal to a large demographic, including gummies, baked goods, and chocolates. In addition to selling handcrafted edible products that we make in our store, we aim to provide the best customer service in the industry and create a welcoming environment for everyone interested in our products. Whether someone is trying edibles for the first time or is coming back for their favorite product, we guarantee that they will leave the shop satisfied.
Products Served
[Company Name] provides a large inventory of edibles that will appeal to a wide customer base. All products are made from scratch in our shop and sold on our shelves or online. Some of our products include:
- Gummies
- Hard candies
- Baked goods
- Chocolate
- Mints
- Fruit chews
Customer Focus
[Company Name] will primarily serve residents who live within a 5-mile radius of the store. The demographics of these customers are as follows:
- 73,249 residents
- Average income of $54,000
- 21% married
- Median age of 35 years
We will also sell our products online to people who live outside [location]. The only customers that will not be able to purchase our products are individuals who live in areas where edibles are illegal or restricted.
Management Team
[Company Name] is led by [Founder’s Name], who has been in the edibles business for [X] years. Before starting [Company Name], he worked at several edibles and cannabis shops, spending most of that time in management positions. As such, [Founder’s Name] has an in-depth knowledge of the edibles/cannabis business, including the operations (e.g., running day-to-day operations) and management (e.g., staffing, marketing, etc.) sides of the industry. He also has in-depth knowledge of edibles recipes and what ingredients make for high-quality edible products.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- There are currently very few stores that sell edibles in [location], meaning there is little competition.
- Our location is in a high-volume traffic area and thus will be highly convenient to a significant number of passersby each day.
- [Company Name] makes its own line of edible products for customers to enjoy.
- The management team has a track record of success in the edibles business.
- With more relaxed state and local laws, edibles are increasing in popularity and demand.
- The residents of [location] overwhelmingly support the use of edibles and similar products, meaning we have a large demographic that will potentially patronize our business.
Financial Highlights
[Company Name] is currently seeking $420,000 to launch. Specifically, these funds will be used as follows:
- Store design/build: $200,000
- Equipment: $50,000
- Initial inventory and supplies: $50,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a new edibles shop located in the heart of [location]. Our shop provides a wide variety of edible products that will appeal to a large demographic, including gummies, baked goods, and chocolates. In addition to selling handcrafted edible products that we make in our store, we aim to provide the best customer service in the industry and create a welcoming environment for everyone interested in our products. Whether someone is trying edibles for the first time or is coming back for their favorite product, we guarantee that they will leave the shop satisfied.
[Company Name]’s History
[Company Name] is run by [Founder’s Name], who has been in the edibles business for [X] years. He previously managed a cannabis shop but noticed that the shop was located in an undesirable location. He also believed that the shop did not sell a wide enough variety of edible products, which were extremely popular. So, he decided to start his own edibles store that would be in a more convenient location and offer a greater variety of options.
He has spent the past year researching recipes and testing his products. After creating a perfect initial line of edible products, [Founder’s Name] incorporated [Company Name] on [date of incorporation]. He has been primarily running the business online from his home but has found a potential retail location to start selling products in-store. Once the lease is approved, all operations will run from there.
Since incorporation, the company has achieved the following milestones:
- Found a retail location and signed a letter of intent to lease it
- Developed the company’s name, logo, and website located at [website]
- Created the initial product list
- Created the online store and began selling products
- Began developing a social media presence
[Company Name]’s Products/Services
[Company Name] provides a wide inventory of edibles that will appeal to a wide customer base. Some of our products include:
- Gummies
- Hard candies
- Baked goods
- Chocolate
- Mints
- Fruit chews
III. Industry Analysis
There has never been a better time to open an edibles business. With increasing public popularity and more lax state and local laws, sales of edibles and other cannabis products are increasing exponentially. We expect these trends to continue as laws become laxer and the general public becomes more interested in these products. As more people educate themselves about the benefits of these products, a larger customer base will be interested in buying them.
According to Global Newswire, the edibles market is expected to grow substantially at a compound annual growth rate (CAGR) of 32.4% annually. Very few other industries are experiencing this kind of growth, so this shows just how much demand there is for edibles.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the community residents of [location] and its surrounding areas.
[Company Name] is a progressive community that overwhelmingly voted for the legalization of cannabis in their region. Therefore, this community is eager to buy edibles and other cannabis products from local businesses. The community primarily consists of middle-class workers who are in need of products that can help them relax or cope with pain after a long day of work.
A demographic profile of the area is as follows:
| Wilmette | Winnetka | |
|---|---|---|
| Total Population | 26,097 | 10,725 |
| Square Miles | 6.89 | 3.96 |
| Population Density | 3,789.20 | 2,710.80 |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
We will primarily target the following three customer segments:
- Millennials: Millennials are the most eager to buy edible products. Though the popularity of these products is rising among other generations, it is clear that millennials will make up a significant portion of our customer demographic. And with a median age of 35 years, it is clear that millennials make up a substantial portion of the population of [location].
- Gen Z: Gen Z is the second most likely generation to use edibles or cannabis products frequently. Though much of the generation is still underage, those that have reached adulthood are likely to buy edibles often. [Location] has a sizable population of young adults that will be eager to visit our shop.
- People With Chronic Pain: The greatest benefit of edibles is that they can help bring relief to people who live with chronic pain. We will market our products as additional options to find relief in addition to their doctor-prescribed treatment. Since there are many hardworking residents in [Location], we expect many of them will be looking for natural remedies to treat their pain.
V. Competitive Analysis
Direct & Indirect Competitors
The following companies are located within a 10-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Hemp House
Established in 2019, Hemp House has quickly become a popular location for cannabis products in [location]. They offer a variety of products to their customers, including vape pens, edibles, oils, and more.
While we expect Hemp House to continue to thrive, its location is inconvenient to much of the city. To visit the shop, most customers must drive downtown and pay for parking. [Company Name]’s location will be far more convenient for customers who live on the outer edges and suburbs of [location]. Furthermore, their selection of edibles is small and will not be able to compete with our inventory.
Local Leaf Snacks
Local Leaf Snacks opened in 2021 as the city’s center for edible cannabis products. Whether it be chocolates, gummies, brownies, or anything else, Local Leaf Snacks has you covered.
While they are popular for their edibles, all of their products are sourced from other companies. Local Leaf Snacks does not make its own edibles. [Company Name] will have the advantage of selling locally-made edible products.
City Cannabis
City Cannabis is a popular location for cannabis products. The shop is large and sells a wide variety of vapes, edibles, topicals, and more. City Cannabis has been the most popular spot in [location] for cannabis as it was the first major business to open up after cannabis became legal in the state. Therefore, it has become a small tourist spot, which has boosted its traffic and customer base.
However, while City Cannabis’ selection is impressive, their edibles inventory is still smaller than ours and not locally sourced. Individuals looking for local edible products will be more interested in frequenting [Company Name].
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include the following:
- Location: [Company Name] will set up shop in a high-traffic area that is easily accessible by many residents of [insert location here].
- Variety of products: Edibles are our specialty, so we will offer a much greater variety of products than our competitors.
- Moderate pricing: Cannabis products can be quite pricey, and soaring demand only makes this worse. [Company Name] will remain competitive by selling our products for more moderate prices and offering coupons and deals to returning customers.
- Management: Our management team has years of experience in the edibles business that will help our business market its products effectively and operate efficiently.
VI. Marketing Plan
The [Company Name] Brand
[Company Name] seeks to position itself as a respectable, upper-middle-market competitor in the local edibles shop landscape. Customers can expect to receive the highest quality edible products for a moderate price.
The [Company Name] brand will focus on the company’s unique value proposition:
- Convenient location
- Excellent customer service
- Wide variety of edible products
- Online ordering service
- Friendly, customer-focused environment
- Moderate pricing
Promotions Strategy
[Company Name] expects its target market to be individuals working and/or living within a 5-mile radius of its location. [Company Name]’s promotions strategy to reach these individuals includes:
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts, and/or provide other inducements for people to visit the store.
Local Publications
[Company Name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure to relevant markets. Community newspapers and cannabis-related publications will be a major promotion effort.
Customer Loyalty Programs
[Company Name] will create a winning customer loyalty program to keep its best clients coming back again and again. The program will include discounts, deals, and promotions that non-loyalty customers will not have access to.
Ongoing Customer Communications
[Company Name] will maintain a website and publish frequent promotions and events.
Social Media
[Company Name] will maintain a solid social media presence to further engage with customers and get suggestions for new products and improvements. Our social media accounts will offer unique promotions and discounts that customers can utilize.
Word of Mouth Marketing
[Company Name] will encourage word-of-mouth marketing from loyal and satisfied clients. The company will use recommendations and word-of-mouth marketing to grow the customer base through the network of its existing customers. The company will be incentivizing its existing customer base to encourage their friends to come by and check out our selection.
Pricing Strategy
[Company Name] pricing will be moderate, so customers feel they receive great value when visiting our shop. Pricing will be similar to or lower than the nearby competition.
VII. Operations Plan
Functional Roles
In order to execute [Company Name]’s business model, the company needs to perform many functions, including the following:
Administrative Functions
- Marketing functions
- Bookkeeping functions
- Hiring and training staff
- Website and social media management
Service Functions
- Providing customer service
- Making edibles from established recipes
- Stocking and maintaining store
- Payment processing
- Fulfilling online orders
- Maintenance to keep the store clean
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name], who has been in the edibles business for [X] years. Before starting [Company Name], he worked at several edibles and cannabis shops, spending most of that time in management positions. As such, [Founder’s Name] has an in-depth knowledge of the edibles/cannabis business, including the operations (e.g., running day-to-day operations) and management (e.g., staffing, marketing, etc.) sides of the industry. He also has in-depth knowledge of edibles recipes and what ingredients make for high-quality edible products.
Hiring Plan
[Founder’s Name] will serve as the Store Manager. In order to launch our shop, we need to hire the following personnel:
- Cashiers/Sales Associates (2 to start)
- Stock/Inventory Associates (1 to start)
- Assistant Managers (1 to start)
- Maintenance Personnel (1 to start)
- Administrative Personnel (for marketing, bookkeeping, etc.) (1 to start)
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sales of its products. The company will have a large selection of high-quality edible products to cater to a broad spectrum of customers in its target market.
The major costs for the company will be inventory costs, staff salaries, and rent. In the initial years, the company’s marketing spending will be high as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $420,000 to launch. Specifically, these funds will be used as follows:
- Store design/build: $200,000
- Equipment: $50,000
- Initial inventory and supplies: $50,000
- Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of customers per day | Per location |
|---|---|
| FY 1 | 100 |
| FY 2 | 120 |
| FY 3 | 140 |
| FY 4 | 165 |
| FY 5 | 190 |
| Annual Lease (per location) | $60,000 |
| Yearly Lease Increase % | 2.50% |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
